FoodTech Weekly #181 by Daniel S. Ruben

FoodTech Weekly #181

Hi there (not least the 85 new subscribers who have signed up since last week),

Here’s a quote to kick things off:

'I don't give a f*ck about what people eat in Europe. I'm anti-FoodTech. The big problem we need to solve is: How do we feed 1B people that are undernourished? Giving back is not about creating the next gen burger that you and your hipster friends can take selfies with.'

The person who said this just raised $58M for his European FoodTech company. Read on to find out who.

—o—

At CES, startup Revolution Cooking just launched a Wi-Fi enabled, touch-screen equipped toaster that will tell you the weather. Here’s my take:

What else caught my eye this week? The number of active investors in U.S. VC (defined as making two or more deals) declined by 38% during 2023 — meaning 2,700+ fewer firms were making deals. Ouch. According to Pitchbook, the total amount of venture capital invested last year was about $150B — half of 2022 levels, and the lowest since 2015. Carta says 20% of all startups raised money at a lower valuation than their previous round, and the number of bridge rounds was the highest in 4 years. This means startups relied on backing from their existing investors rather than finding new ones. Also, company exits (e.g. IPO or M&A) returned just $62B last year, the lowest since 2010, and less than 1/10 of the $797B that was returned in exits in the 2021 heydays. This also meant LPs had less money to commit to VC funds.

The same trends were evident in FoodTech. For example, global cell ag funding has fallen from $2B across 63 deals in 2021, to $1.2B across 79 deals in 2022, to just $304M across 39 deals in 2023.

So 2023 was not a good year for startups. But the challenges we need to tackle are still out there. If you’re an impact entrepreneur, check out Norrsken Accelerator (where I’m a mentor) which is open for applications. $125K upfront investment, no program fees, access to unicorn mentors, and more.

This week's rundown:

• IGS has fetched $28.5M to build a huge vertical indoor farm in the UAE

• Protix has secured €37M to construct an insect-as-feed facility in Poland

• Eiersollbruchstellenverursacher is a real word. Today you’ll learn what it means.

Let's go!

Conversations

Caught up with Annette Graneli, Ph.D., CEO and Co-Founder of Green-On. Annette did her Ph.D. at Chalmers University of Technology, was a researcher for a while, and did a postdoc at Columbia in NYC. She later returned to Sweden, doing research at Gothenburg University and later RISE, where she met her cofounders. ‘At that point I worked with innovation since I felt that there were so many companies in the food space with a sustainability focus that needed to be accelerated’, Annette explains, and continues: ‘My co-founders figured out that you could make food from electricity. We felt the idea was too good NOT to make a company out of it. So two years ago we left RISE to establish the startup.’

So what problem does Green-On solve? They want to make sure we stay within the nine planetary boundaries, as we’re exceeding six of them. And food is linked to all of it. One example is palm oil. ‘It’s a land efficient and versatile crop’, Annette says, ‘but it’s linked to deforestation. And forecasts say we’ll need 2-3x more palm oil by 2050.’

Green-On uses electricity, carbon dioxide, and water in a chemical process to create fatty acids in the first step, and then triglycerides in the next step, making the exact same molecule that plants and animals make. The technological process to do this is complex (thus some granted and pending patents, plus trade secrets), but it’s scalable. And it enables Green-On to produce saturated fats and oils — mimicking things like palm oil, coconut oil, dairy ingredients etc — without arable land, fertilizer, and pesticides, and with low GHG emissions. While palm oil results in 13 kg CO2e/kg of oil, Green-On’s product results in just 0.7 kg CO2e/kg of oil.

The company will sell ingredients B2B to e.g. food manufacturers who need fats and oil, and may in the future also license its technology to others. Palm oil alone is a $70B market, so the potential upside is significant.

Green-On, which is backed by e.g. AAK, Big Idea Ventures, and Norrsken Accelerator, is raising a €4.9M round to secure regulatory approvals in the EU and the U.S., develop and optimize the products, expand the team, and boost production. The first factory will produce around 10K - 20K tons of fat annually (‘which is small volumes globally, but still a decent start’, Annette says).

Green-On is looking for value-add investors, preferably those with experience in building infrastructure, and those who can follow in later rounds. And the company wants to engage with food manufacturers who currently lack realistic alternatives to tropical oils and animal fats. And eventually, Green-On wants to connect with top talent too. Annette can be reached via email as well as LinkedIn.

Noteworthy

• OK, so the person quoted at the top of the newsletter is Mazen Rizk, Founder and CEO of Germany’s Infinite Roots. I interviewed him in Nov 2020 for FoodTech Weekly. Infinite Roots grows mycelium cells into alt protein products (from cell culturing to final product in less than a week), and just raised a $58M Series B round led by the European Innovation Council (EIC) as well as the holding company of candy giant Haribo. This is the largest-ever raise for a mycelium company in Europe.

• Scotland-based Intelligent Growth Solutions has harvested £22.5M (appr. $28.5M) in Series C funding, to build a 900K sq. ft (90K sq. m) farm in the UAE together with ReFarm. The United Arab Emirates currently imports over 80% of its food, and looks to indoor vertical farms to boost the country’s food security. The C round was backed by e.g. COFRA Holding, DC Thomson, S2G Ventures, and Ospraie Ag Science. The funding announcement comes after a tough year for vertical farming, where many companies went bankrupt or radically downsized. Still, Seasony of Denmark brought home €1.5M (appr. $1.6M) for its mobile robot for vertical farming in Dec 2023, so funding is still flowing into the space.

• Dutch insect-as-feed producer Protix has signed a €37M loan agreement with the European Investment Bank to build a new production facility in Poland.

• Also from the Netherlands, Verdify has secured €4.2M (appr. $4.55M) from investors such as Goeie Grutten Impact Fund, Oost NL, Koppert Cress and De Smaakmaker. Verdify offers personalized meal inspiration for individuals, to help them make healthier and more environmentally sustainable food choices.

• farm-ng of California has scooped up a $10M Series A round led by Acre Venture Partners to further develop its ag robot Amiga. The robot is designed to help small to midsize farms become more productive, profitable, and sustainable.

• Ovie has launched food freshness trackers to put on food containers in households, to cut food waste.

• Bioscience startup Kaffe Bueno of Denmark has clinched €6.2M (appr. $6.7M) in fresh funding led by Borregaard and joined by The EIC Fund, Dalgaard Group, PINC, EFIO and The Yield Lab. The company upcycles spent coffee grounds into ‘high-performance natural ingredients’.

• Researchers at Virginia Tech are building an AI acoustics tool to interpret what cows are mooing, and thus better cater to cattle needs. Meanwhile, Dalhousie University researchers are busy doing the same, but to decode chicken language.

• SIRPLUS of Germany, which takes food e.g. rejected by supermarkets due to size, color, or overproduction and sells it through subscription boxes, has filed for insolvency. This follows similar closures from industry peers in e.g. Denmark (Eat Grim) and LATAM (Muni, La Neta and Apperto).

• According to a new scientific study, bottom trawling shreds the seafloor and could be a major source of GHG emissions. My reaction:

News from the FoodTech Weekly community

• FoodHack is looking for Ambassadors for a number of cities — Basel, Berlin, Dubai, Kigali, Lausanne, London, Melbourne, Mexico City, New York City, Stockholm, and Tokyo; apply here.

• The Good Food Institute is conducting a 2023 food industry survey for food manufacturers, investors, retailers, foodservice companies, suppliers, and service providers. Current involvement in the alt protein sector is not required to participate in the survey, and all results are anonymous. Help GFI by filling it out. The survey closes on Jan 29.

• Are AgriFoodTech start-ups the new drivers of food systems transformation? If you love peer-reviewed articles, here’s a great piece of weekend reading on this very topic (by Laurens Klerkx and Pablo Villalobos).

• Thia Ventures (Belgium) is hiring a Visiting Analyst.

• 'The Complete Ultra-Processed Foods and Plant-Based Meat FAQ Guide' was just published; it delves into the nuances of ultra-processed foods and plant-based meats. It’s very comprehensive and worth a read.

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

Random Stuff

• German word of the day — Eiersollbruchstellenverursacher. It means egg topper (but you of cause understood that from the German word, constructed as Egg shell Breaking point Causer). Video here.

• Some people apparently inject, erm, seminal fluid from salmon into their faces to make them look younger.

• The Japanese vlogger cooking and eating rotten food.

• Food from urban agriculture has a 6x higher average carbon footprint vs. conventional produce, a new University of Michigan study shows.

• The $75M farm that will harvest fly poop.

• This guy’s life on a ship in the North Sea looks like that old Jamiroquai video (1 min):

I love you.
Daniel

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This issue was produced while listening to Morning by Francis and the Lights. Follow me on LinkedIn and Twitter. Did your brilliant friend forward this to you? Subscribe here.

Disclosures: I'm founder of Solvable Syndicate. 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.