Where to Start Your Foodtech Startup — Part III
Recently, we covered eight of the most interesting high-impact foodtech ecosystems globally, in the hope of helping any startups who may be considering moving in order to progress their ideas and grow their business. From researching that post, as well as our daily interactions with high-impact foodtech startups, it’s evident that exciting developments are happening all over the world. Therefore we decided to delve deeper into an additional eight of the up-and-coming regions. Again, it’s not an exhaustive list, so feel free to send us details of any more we should think about.
While not strictly focused on foodtech, the South African Innovation Summit is the largest startup event in Africa and takes place in September to showcase and support top entrepreneurs across the continent.
There are a couple of options for investment in South Africa, including:
- OceanHub Africa — for innovative impact-driven startups focused on protecting our oceans. The program provides startups with a workspace and a pretty swanky software and engineering support package, alongside mentorship and access to market leads.
- One Bio — this seed investment fund invests in early-stage biotech startups. Speed to market is critical, so startups need a prototype or form of IP which can be translated to a marketable product as quickly as possible. The fund allocates 85% of its resources to South Africa and 15% to the rest of Africa. It considers applications year-round. Typical investment size $30k — $1.2M, based on the achievement of defined milestones.
In terms of existing companies working hard to change the world: Mzansi Meat is Africa’s first cell-based meat startup, with a focus on developing products which are specifically tailored for traditional African dishes such as braai, and Aerobotics provides intelligent tools to the world’s agriculture industry, and raised $17M in an oversubscribed Series B round in January.
The alternative protein market is on fire right now, and Latin America is no exception to the trend. Brazil is the world’s third largest consumer and second largest producer of beef, so a plant-based shift in Brazil alone would see an enormous impact on the meat industry. There are plenty of local startups focused on the future of food, and Brazil is starting to set itself up to support them. With a gross domestic product of around $3.46T in 2019, Brazil is by far the largest economy in Latin America and the eighth largest in the world. Two of its universities, University of Campinas and University of São Paulo both have courses and facilities for students and startups interested in food technology. Plus, there are a couple of programs to support growth:
- FoodTECH HUB — this program has a rigorous, five step selection process, but it has a variety of programs for all aspects of the foodtech industry. Its four month startup program provides mentorship as well as access to the best venture capital funds in Brazil and abroad, alongside access to national and international events. You can register your interest at any point.
- The Yield Lab LatAm — an accelerator program designed to leverage the agriculture assets unique to Latin America, whose fund will invest up to $100,000 into early stage technology companies that sustainably revolutionize agrifood systems globally.
Australia is a pretty unique proposition for startups. Its relatively small population is clustered around some very specific hotspots, and the rest of the country is sprawling and largely empty other than farmland. That being said, in recent years there have been several startups making a difference within sustainable technology, and three of its universities are top rated for food and nutritional sciences: University of Melbourne, University of Queensland and University of New South Wales.
There are a few options for investment in Australia:
- Cicada GrowLab — this incubation program provides mentors and facilities for anyone using deep tech to address human and planetary needs, from climate change to food waste, antimicrobial resistance and dwindling natural resources.
- Lion’s Unleashed — this twelve week accelerator gives startups the opportunity to collaborate with one of the region’s largest food and beverage companies, with unique insight into Lion and its customers. Typical investment size: up to AUD$150k, but selected startups can access up to a further AUD$500k from program partners.
- SproutX — Australia’s leading Food and Agtech Accelerator, empowering founders to build world-class agricultural technologies which will have a positive impact in the lives of producers and consumers. Typical investment size: AUD$40k in exchange for 5% of equity.
- SparkLabs Cultiv8 — a mentorship program designed to help Australian startups meet the increasing needs of Asian consumers. Applications for its 2021 program are open now. Typical investment size: up to AUD $100k.
Five Aussie startups made the shortlist for Rabobank’s FoodBytes! Virtual Pitch for 2020, including I Am Grounded from Queensland, a social enterprise which upcycles discarded coffee fruit into sustainable snack products, and Carapac from New South Wales, which makes durable, home-compostable packaging from crustacean shells. Plus, v2food is Australia’s number one plant-based meat brand, currently expanding its range to include new plant-based sausages and partnering with Burger King Korea to add two new plant-based versions of its famous Whopper to its menu across all 240 of its locations.
China has the world’s largest population and is the world’s largest food producer, so is actively encouraging startups to bring new ideas to solve global food safety and nutrition issues. It has a number of educational institutions focused on the food of tomorrow: Jiangnan University is ranked as best in the world for foodtech, and South China University of Technology, Zhejiang University and China Agricultural University aren’t far behind. Chinese startups are primarily focused on alternative protein, and this is reflected in its accelerator and funding options:
- Bits x Bites — China’s pioneer foodtech venture capital firm, investing across the supply chain, from agriculture, production and distribution to retail.
- Dao Foods — this accelerator’s Venture Fund 1 plans to support and invest in 30 alternative protein companies over the next three years. It invests 500,000 RMB in each company in a bid to increase the velocity of quality alternative protein development in China, which it views as a ‘huge business opportunity with massive social impact.’ Typical investment size: $75k.
- Lever China Alternative Protein Fund — early investors in Beyond Meat and Impossible Foods, recently completed its first five investments in pioneering early-stage plant-based and cell-cultivated meat companies in China.
Shanghai-based Hero Protein (disclosure: we’re investors) is the latest of China’s plant-based meat startups, and several of its products are particularly suited for classic Chinese cuisine. Plus, cultivated meat startup Joe’s Future Food raised 20M RMB ($3M) in January from angel investment to accelerate R&D of its cell-based minced pork product, which is China’s first.
La France, one of the gourmet capitals of the world, is home to a plethora of facilities for food and agritech-focused startups. The University of Lyon is listed as one of the premier universities for foodtech in Europe, with research facilities dedicated to the future of food. The French government is not currently very supportive of cultivated meat, but some French Big Food companies are getting behind the trend of alternative protein, so things could be about to change.
There are several work spaces and accelerator programs that startups can access:
- Food’Inn Lab — the aim of this incubator is to create more links between research teams, students and entrepreneurs of AgroParisTech, with office space, labs and test kitchens provided.
- Le Village by CA — France’s premier accelerator, it provides a network of support, creating links between startups and national businesses, to further innovation and create employment.
- ShakeUpFactory — based in the world’s biggest startup campus, Station F, it’s a six month accelerator program designed to help startups scale their companies. It’s taking applications now so sign up to get involved.
- ToasterLAB — focused on agtech, with 12 months of personalised acceleration support, plus free office space and accommodation during the intensive phase (2–3 months), based in Dijon. It costs €6k to join, but you don’t have to sacrifice any equity.
Alongside these, there are venture capital firms interested in impact-driven startups:
- Angelor Capitale — angel group seeking to invest in the foodtech, health and greentech sectors, with a food-specific syndicate.
- CapAgro — the first European venture capital fund dedicated to agtech and foodtech, with an ambition to be the leading investment fund for maximising sustainable value creation across the entire agrifood value chain.
- Five Seasons — investing in product and process innovation aimed at solving the global challenges of the food industry, such as agricultural yield and food waste.
- Seventure Partners — primarily dedicated to life sciences, including human and animal nutrition, alongside digital technologies.
Notable high-impact foodtech startups from France include Ÿnsect, which raised another $224M in October 2020 to commercialise the world’s most high-tech bug colony. Its vertical farms are raising insects for protein, currently used to supply fish farms, but which it plans to make available as an alternative protein source for humans. Plus, cell-based startup Gourmey is working on cultivated, cruelty-free foie gras. Bien sûr.
Spain is becoming a major foodtech player in Europe and globally, with a growing ecosystem of startups and investors. According to this report by Forward Fooding, €235M was invested in Spanish foodtech startups 2010–2018, and another €400M in 2019 (out of which €336M was invested in Glovo). The report helpfully lists out some of the active investors in the sector, which includes Food Business Angels, a network of private investors, promoted by Eatable Adventures, which aims to boost investment activity in startups within catering, food, beverages and technological services.
Startups in Spain can access the following research facilities and innovation hubs:
- Eatable Adventures — it was the first food entrepreneurship community, first European early-stage food investment network, and has worked with over 25,000 startups and over 500 projects each year since its inception. Its accelerator program takes four months, is intensive and hands on, and connects startups with its international mentor network.
- The Food & FoodTech Innovation Hub — Barcelona’s first shared workspace dedicated to the most avant-garde food and foodtech companies in Spain, powered by Forward Fooding in Partnership with Talent Garden to connect and engage entrepreneurs. Applications are always open.
- Fishing Tech — connecting the experience and contacts of leading companies in the fishing industry with innovative technology startups and companies around the world. Applications are open now, and there are zero equity requirements.
- Ivoro — primarily an innovation hub, though did hold an accelerator in 2017. Successful applicants can use its Lab Kitchen to further develop and fully test concepts, and you can register your interest at any time. Typical investment size: $150k.
Spanish startups making waves include plant-based meat brand Heura Foods, which tripled its turnover through the pandemic and sparked controversy with a giant billboard in Madrid late last year which claimed that “one beef burger pollutes more than your car”. BioTech Foods’ brand, Ethicameat, is developing a range of cultured meat products which are high in protein, fat-free and antibiotic-free. Eco startup Feltwood is making packaging materials from farming and vegetable waste that is not suitable for human consumption.
A few years ago, the Swedish government released a national food strategy to produce food more sustainably, including the allocation of more capital into food and agriculture innovation. Since then, Sweden’s foodtech space has blossomed, and its very own SLU is ranked as the world’s third best agricultural university. Also, Lund University and KTH Royal Institute of Technology in Stockholm are some of the top-rated universities in Europe. Plus, there are a couple of options for startup accelerators:
- Norrsken Impact Accelerator — a brand new 8-week program for 2021, bringing together a global collective of entrepreneurs and investors in Stockholm to solve some of our planet’s greatest challenges. Typical investment size: $100k in exchange for 5% equity.
- PINC — focused on the Nordics but also open to Europe, this incubator offers attractive financing opportunities alongside its mentoring strengths borne of 145 years in the industry. It’s always looking to connect with startups. Typical investment size: up to $2M.
- +impact, a Nordic initiative by Danske Bank to accelerate early-stage impact startups. Usually the accelerator focuses on circular economy startups but the spring 2021 batch has a foodtech focus. It’s free for startups, and equity-free.
Alongside these, there are many investors seeking impact-driven startups:
- Kale United — looking for ‘plant-based game changers’ to improve the availability of plant-based products and make the transition to a plant-based lifestyle as easy as possible.
- KTH Innovation — helping researchers and students at KTH to commercialize their research results and business ideas.
- Martas Explorers — a privately-owned investment group investing in early stage startups in environmentally, financially and socially sustainable companies in the Nordic region.
- Nicoya — a VC focusing on strong consumer food brands.
- Norrsken VC — a venture capital fund worth $100M focused on social tech entrepreneurship, supporting early stage impact startups to generate strong financial returns.
- Otiva — a Stockholm-based investment firm undertaking series A to late growth funding cycles in foodtech businesses.
- Pale Blue Dot — a climate tech focused pre-seed and seed stage vc.
- Vinnova — a Swedish government agency working under the Ministry of Enterprise, providing funds for R&D within greentech and foodtech.
- Trellis Road — well, whilst having a global outlook we call Sweden our home, so we couldn’t finish this list without mentioning ourselves :)
Sweden is obviously home to Oatly, which raised $200M last year and is now seeking a valuation of $10Bn in their upcoming IPO. Also, Nick’s recently raised $30M for their low-sugar ice-cream. Another Swedish startup, Matsmart, has over the years raised almost $50M for their soon-to-expire online groceries business. There are also plenty of up-and-coming Swedish startups working hard to change the world, and here’s a handy list of ten to watch in 2021.
US — Chicago
The windy city has stiff competition in the US (we covered the East and West Coast hubs in our previous post), but it has been a pioneer, from having the first skyscraper in 1884, to reversing the flow of the Chicago River in 1900 and being the start of the historic Route 66, so no surprise that startups here are finding their feet (and plenty of investment). Plus, it’s home to The University of Chicago, which hosts a tonne of research facilities for future-focused businesses.
There’s a small selection of programs designed to give startups a boost:
- The Food Foundry — an accelerator program designed to support, connect and propel innovative startups who are reimagining the food industry, providing investment, office space and administrative support. Applications to be part of its next cohort are open now. Typical investment size: $75k in exchange for 3% equity.
- The Hatchery — a startup community space, where tech companies can use the state-of-the-art kitchen facilities plus access courses and events, networking opportunities, financing and mentorship. It takes applications constantly, so why not sign up to be considered?
- IFT — a forum for passionate food professionals and students to collaborate, learn, and contribute to strengthening the important role food science and technology plays in advancing our global food system.
And plenty of investment options:
- ADM Ventures — the venture arm of Archer Daniels Midland, one of the world’s largest food commodities, processing companies, and supplier of plant based protein ingredients.
- Bluestein Ventures — looking for seed and series A startups in the food and retail industry, to invest across the value chain.
- Cleveland Avenue — founded by a former Mcdonald’s CEO, investing technologies designed for foodservice and hospitality.
- Cultivian Sandbox — investing in innovative food and agriculture technology companies who are commercializing the necessary solutions to increase food production, reduce inputs and increase sustainability.
- Germin8 Ventures — supporting transformative food and agriculture technology to drive a 21st century food system upgrade.
- GreenLeaf Foods — a wholly owned, independent subsidiary of Maple Leaf Foods Inc, committed to shaping the future of plant-based foods.
- Litani Ventures — looking for businesses that bring valued novelty to market within the foodtech and agritech sectors.
- S2G Ventures — backing entrepreneurs who are working to disrupt the food system across the supply chain, to meet consumer demands for more nutritious, sustainable, and traceable food.
Chicago is home to many foodtech startups, including fermentation tech Nature’s Fynd, which recently pre-released its Breakfast Bundle made with its proprietary nutritional fungi protein called Fy, and sold out in less than 24 hours. Other Chicago foodtech startups is Farmer’s Fridge, selling plant-focused meals and snacks via automated vending machines. And of course, Chicago is the home of restaurant marketplace giant Grubhub acquired by Just Eat Takeaway for $7.3Bn last year.