FoodTech Weekly #138 by Daniel S. Ruben

FoodTech Weekly #138

Hi there,

The AgFunder Global AgriFoodTech Investment Report 2023 was just published. It shows a 44% year-over-year drop in AgTech/FoodTech funding (to $29.6B) in 2022, although several climate-related segments actually grew. The decline was pretty much in line with global venture capital markets.

Money used to be pretty much free two years ago, and that led to crazy tech valuations, which also impacted AgTech/FoodTech funding ($51.7B investments in 2021). Investors made bets on convenience plays that are now out of vogue (RIP, food delivery startups). Alt protein investment also took a hit -- although alt protein has attracted $14.2B in private capital in the last decade, almost doubling annual investments every year on average according to GFI, so it was expected that this trend would eventually subside (for more on the alt protein funding topic, see Michal Klar's excellent brand-new write-up).

One important observation from the new AgFunder report is that AgTech/FoodTech is increasingly recognized as a solution in the climate space. For example, funding for Bioenergy & Biomaterials increased to $2.3B (up 15% vs 2021), AgBiotech funding increased to $2.7B (vs. $2.5B in 2021), and Farm Management Software, Sensing & IoT funding increased from $430M to $1.7B between 2021 and 2022.

It's fundamentally great that investors and policymakers are realizing that we cannot solve climate without addressing the food system. Another very encouraging sign is that funding to African AgTech and FoodTech startups increased 22% to over $600M last year. I expect to see much more AgTech funding in particular being deployed to this key continent in the coming years.

Read the full report for all the goodies.

---

I'll be co-hosting the HackSummit in Lausanne, Switzerland on May 11-12, 2023, and am really looking forward to two exciting days with some of the best folks in FoodTech and ClimateTech (350 startups, 350 investors, 200 experts and corporates). Sifted ranked last year's Summit as one of the best tech events in Europe. Early bird ticket sales end today, March 10, so grab your ticket now.

This week's rundown:

• Alt meat brand THIS from the U.K. bags £15M Series B round

• Chromologics of Denmark expands Seed round to €12.6M, to bring natural red colorants to market

• FoodSeed launches in Italy with €15M in funding to help support local sustainable agriculture and circular economy startups

Let's go!

Conversations

• Chatted with Arseniy Olkhovskiy, CEO and Founder of FlyFeed, an Estonia-based insect farming startup. Arseniy had always worked in tech startups (e.g. founding his first EdTech startup when he was just 17), and never in agriculture. He says: 'I was bothered by the issue of malnutrition -- something is fundamentally wrong when we still have that issue'. He dug into why people in many countries can't afford healthy diets, and decided to focus on reducing the cost of animal protein -- by using insects. And after some more research, he realized Vietnam had the perfect ambient conditions to build an insect-as-feed farm. Thus, FlyFeed was born in November 2021. 'There's so much ‘high quality’ organic waste here. There are huge banana plantations, but if bananas have black spots, customers will not buy them, so instead the bananas get burnt, tons per day, even though it's the perfect feed for insects', Arseniy explains. He hopes that his insect-as-feed company will both be able to help upcycle organic waste in a more environmentally friendly way, and also bring affordable, sustainable animal feed and fertilizer to countries that need that. 'I believe that while it will take years for insects as human food to hit product/market fit in Western markets, there's a huge demand for it in Asian and African markets', says Arseniy. So that's the end game. Currently, FlyFeed has an in-house team of 13 people, and plans to open the first facility in December 2023, followed by several others in Vietnam, India, and Africa by 2026. FlyFeed is actively hiring for positions in Vietnam. Arseniy can be reached via LinkedIn and email ([email protected]).

Noteworthy

• U.K. alt meat startup THIS has raised a £15M Series B, of which £10M came from institutional investors like e.g. BGF, Five Seasons Ventures, and Lever VC, and £5M was raised on investment platform Seedrs last year.

• Daisy Lab of New Zealand has landed a $0.9M Seed round. The company uses precision fermentation to produce proteins like whey and (eventually) casein, which can be used to produce bioidentical dairy alternatives such as cheese and ice cream.

• Hectare Agritech of the U.K. has banked a £16.5M ($20M) Series A round. Some 130,000 farm businesses use Hectare's SaaS crop and livestock insights solutions, which help farms to e.g. improve animal health, access market price benchmarking, optimize livestock trading, and reduce the carbon footprint of the beef and sheep supply chain.

• Forward Fooding has launched their annual FoodTech500 list, recognizing 'the top companies shaping the future of food'. The top five included Bowery (vertical farming), Ÿnsect (insect farming), Plenty (vertical farming), Infarm (vertical farming), and ProducePay (farmer market platform).

• Chromologics of Copenhagen, Denmark (whose CEO/Co-Founder Gerit Tolborg I interviewed for FoodTech Weekly #35) has raised another €7.1M, extending its total seed funding to €12.6M. New investors include Döhler Ventures and Thia Ventures. The company develops natural, sustainable colorants via fungal biotech.

• NewScientist describes how ranchers are using GPS collars to herd their cattle with virtual fences.

• Brazil has approved the cultivation and sale of drought-resistant genetically modified wheat.

• Italian FoodTech accelerator Eatable Adventures has been chosen to lead FoodSeed, the national Italian agrifoodtech acceleration program. FoodSeed has received more than €15M in funding, and will select up to 10 startups annually for the next three years to boost companies in especially sustainable agriculture, food and bev, and circular economy.

• Sweden's largest technical university, KTH Royal Institute of Technology, has established KTH FOOD, a new research center which will focus on functional food products and health, logistics and consumption, sustainable food production and circular food processes.

• Molecular biologists at U.K. plant research institute Sainsbury Laboratory have found a way to equit plants with a sort of antibody-based defense that may one day enable crops resistant to any kind of emerging virus, bacterium, or fungus, Science writes. As seen in the below picture, the leaf on the right has been engineered to make an antibody like receptor to defend itself against a virus. The non-engineered leaf (left) didn't have the antibody-like receptor.

News from the FoodTech Weekly community

• The Rockefeller Foundation (U.S.) is hiring a Manager, Nutrition and Climate... UPSIDE Foods (U.S.) is recruiting a Senior Scientist... Juicy Marbles (Slovenia) is looking for a VP of Production.

• A list of 250+ female leaders in Food / FoodTech and ClimateTech, put together by HackCapital.

• Red to Green just released the final episode of their 'biotech in food' season, with an audio quiz on precision, biomass, gas fermentation, molecular farming, and more. Available on e.g. Spotify and Apple Podcasts.

Want to share some FoodTech news/project with other FoodTech Weekly subscribers? Hit reply.

Random Stuff

• Remote work has led to people having more babies, new research has found.

• Some good news -- there's been a dramatic decline in whale hunting:

• Saudi Arabia's camel whisperers use a special language called Alheda'a to control their herd. The language was added to UNESCO's heritage list in 2022 (1.5 min video).

• Toblerone will drop the Matterhorn mountain from its packaging logo, as production is moving to Slovakia; Switzerland's 'Swissness' law restricts how the country's national symbols can be used in business and marketing.

• Grazing goats are used in San Francisco to help prevent fires

• Rain Epler, former Minister of the Environment in Estonia, has an...interesting haircut.

​I love you.

Daniel

- - -

This issue was produced while listening to Blackbird by Imaginary Future. Follow me on LinkedIn and Twitter. And here's the Appetizer which I co-host. Did your brilliant friend forward this to you? Subscribe here.

Disclosures: I'm Head of Strategy and Special Projects at Stockeld Dreamery. I'm an operating advisor to VC/investment firms Nordic FoodTech VC, Trellis Road, and Blume Equity. I'm a mentor at accelerators Katapult Ocean, Big Idea Ventures, and Norrsken Impact Accelerator. I'm an advisor to BIOMILQ, FoodHack, Hooked, Ignitia, Improvin, IRRIOT, Juicy Marbles, Lupinta, NitroCapt, Oceanium, petgood, Rootically, Transship, VEAT, and Volta Greentech; in some of these startups, I have equity.

Become a Premium subscriber of FoodTech Weekly for just $5/mo. This helps to cover the time and money I spend on paid newsletters and databases to stay updated on the FoodTech ecosystem. Plus, you'll get the occasional long-read interviews with FoodTech superstars, behind-the-scenes reporting from key global FoodTech events and conferences (and extra ticket discounts to them!), 1:1 calls with me, and bragging rights. And I'll send you a food-themed book that I love, once a year.

Boring disclaimer: The newsletter content is intended only to provide general and preliminary information to folks interested in FoodTech, and shall not be construed as the basis for any investment decision or strategy. I assume no liability in regards to any investment, divestment, or retention decision taken by readers of this newsletter content.