FoodTech Weekly #169 by Daniel S. Ruben

FoodTech Weekly #169

Hi there,

I just led an investment for Solvable Syndicate into Nilus of Argentina. They cut food waste by e.g. sourcing ugly fruits and vegetables as well as short-expiry date goods like foods and beverages, and sell them via community group buying to low-income populations in vulnerable neighborhoods in Latin America, thus giving these people access to quality food at affordable prices.

I interviewed Nilus’ CEO and Co-Founder, Ady Beitler, for FoodTech Weekly two years ago. He said something back then that stuck with me: ‘Our insight was that we need to treat the poor people like customers, not clients. That's how to give people their dignity back. Poor people hate to be treated like they're poor. So we can't sell them a single peach that's bad -- because then we remind people that they're poor -- and they will hate us for it.'

With the Solvable Syndicate, I hope to do many more investments in early-stage, high-impact foodtech and climatetech startups.

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This week's rundown:

• Japanese plant-based meat company DAIZ is foie gras’d with $47.4M Series C

• Purdue University professor invents efficient, inexpensive way to detect food fraud

• Large food corporates have cut food waste significantly, new Champions 12.3 progress report finds

Let's go!

Conversations

I recently had the chance to get to know Stephanie Michelsen. She was born in Denmark, grew up in Sweden, and moved to the Bay Area at 17. At college, she found her love for biotech. Stephanie wanted to do something that had a positive impact; she identified a gap for collagen and gelatin alternatives, and in the summer of 2020 Jellatech was born. ‘I asked myself: “If animal agriculture disappeared tomorrow, what would we miss?” There’s a ton of proteins like gelatin and collagen with unique functionalities. They don’t exist in the plant kingdom. Gelatin and collagen are byproducts from the meat and leather industries and are used for example in vaccines, medical devices, R&D, food and beverage, and cosmetics. There’s no way to get around it, we need these proteins, and we currently can’t do it without animals’, Stephanie explains.

What Stephanie realized along the way was that many companies struggle to source gelatin and collagen, as the price can increase by 3x in a few months, and there are quality issues. Jellatech can produce these proteins at guaranteed prices and quality, with flexibility. They do it by cell-culturing full proteins with different applications in bioreactors.

Today, Jellatech is a B2B ingredient supplier for companies in need of gelatin and collagen (collagen alone is a $8.4B market). ‘We hope to eventually be at price parity with conventional animal protein’, Stephanie says. The company, which has 7 employees, recently raised a $3.5M Seed round to go to pilot scale, which will be followed by commercial scale two years from now. Jellatech is hiring for several roles. It’s also interested in entering strategic partnerships with smaller companies using collagen/gelatin in their products, and who want to test Jellatech’s products. And in the spring of 2024, Jellatech will kick off its Series A round. Stephanie can be reached via LinkedIn and email.

Noteworthy

• Japanese plant-based meat scale-up DAIZ has scored a ¥7.1B (appr. $47.4M) Series C round of debt and equity from e.g. Mitsubishi UFJ Capital, Roquette, and Miyoshi Oil & Fat. The company will now build what it says will be Japan’s largest plant-based meat factory.

• Paul-Tech of Tallinn, Estonia has harvested €1.4M ($1.5M) in a round led by the fund Superangel; the company provides farmers with real-time insights on their soil.

• Edinburgh, Scotland-based insect genetics startup Beta Bugs has bagged £1.7m ($2M) in funding led by Scottish angel syndicate Tricapital. I interviewed the Beta Bugs founder, Thomas Farrugia, for FoodTech Weekly #130.

• U.S. precision fermentation scaleup Liberation Labs is preparing to raise a $75M Series A round, to help build a production facility in Richmond, Indiana, capable of producing 600 to 1,200 tons of protein per year.

• The latest Champions 12.3 progress report (named after the Sustainable Development Goal aiming to cut food loss and waste with 50% by 2030), shows that IKEA reported a 54% food waste reduction; Tesco and Kellogg’s also reduced their food waste by more than 40%.

• The Q2 2023 FoodTech investment analysis by Pitchbook says there are signs the FoodTech funding landscape may start to improve. Total FoodTech deals increased from 197 in Q1 to 268 in Q2 this year, and deal value was more or less stable at $2.2B for both quarters.

• AI is taking over grocery stores, Forbes claims. It’s being used to personalize grocery shopping, provide individualized weekly recipes, and personalized pre-assembled shopping baskets, but also to help store managers detect e.g. missing or misplaced inventory.

• Last year, Spanish authorities seized 2,000 kgs (4,400 lbs) of adulterated saffron (bulked up with inexpensive extracts), worth millions of euros. Bartek Rajwa, professor of bioinformatics at Purdue University, has developed an innovation that can detect food fraud, quickly and inexpensively (check out the article, it’s fascinating!)

• MCE Social Capital has raised $41.6M for its sustainable agriculture fund. Since 2006, MCE has invested $300M in organizations serving smallholder farmers in LATAM and Africa. MCE plans to finance about 35 agribusinesses and finance organizations over the next nine years. In related news, Spanish-Israeli Swanlaab has launched an AgriFoodTech fund, aiming to close at €40M to €80M and to eventually invest in 20 Spanish startups.

• We’ve all been at some conference focused on driving better health outcomes, or environmental outcomes in the food system — only to find out that conference food served is unhealthy and/or environmentally unsustainable. Well, GreenBiz has written a helpful 8-step guide on how to make food more sustainable at your next conference.

News from the FoodTech Weekly community

• Essential (Kenya) is hiring an Operations & Finance Manager… Fermify (Austria) is recruiting a Downstream Engineer… The Regenerative Agriculture Alliance (U.S.) is looking for a Grants Manager.

• The Good Food Institute (GFI) is researching the alternative meat & seafood industry’s current and future projected usage of omega-3 ingredients, and looking for responses from 1) alternative meat and seafood companies and 2) academic researchers who use omega-3 ingredients in their alternative meat or seafood research. If that’s you, they’d love to hear your thoughts via the survey by Nov 24, 2023. More info here.

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

Random Stuff

• How much money do you spend on food? It depends on how much money you have. Some interesting graphs compiled by Marion Nestle.

• The Crimes Behind The Seafood You Eat - interesting, and visually impressive, read in The New Yorker.

• This year’s fattest bear award goes to 128 Grazer, a ‘fierce queen’ who loves salmon, lives in Katmai National Park in Alaska, and is estimated to weigh 700 lbs (317 kg). Grazer beat the runner-up, called 32 Chunk. Some 1.4M votes were cast in the competition.

• ‘You Gorged on Your European Vacation but Lost Weight. Why?’ (Wall Street Journal)

• Life goal:

• In case you didn’t know, one week per month the European Parliament moves its offices (incl. staff and all paperwork) from Brussels, Belgium to Strasbourg, France (a distance of 440 km / 273 mi), at a cost of at least €100M per year. Well, on Monday this week a rail signalling error caused a French train with hundreds of MEPs (Members of European Parliament) plus their teams to unexpectedly make a 45 minute stop at the happiest place on Earth — Disneyland Paris. Says German MEP Daniel Freund: ‘We are NOT a Mickey Mouse parliament.’

​I love you.

Daniel

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This issue was produced while listening to Waiting All Night by Rudimental and Ella Eyre. Follow me on LinkedIn and Twitter. Did your brilliant friend forward this to you? Subscribe here.

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

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.