There is always something fun, as the end of year creeps up, in thinking about the technologies that will disrupt or transform the world over the next few decades.
Some of the most exciting are revealed in the Global Corporate Venturing annual survey of about 200 corporate venturing leaders.
Mario Augusto Maia, head of investments at Novozymes, said this year’s most interesting technologies to watch were “the continue uprise in alternative protein, the resurgence of interest in biopharma and the renewed focus on sustainable packaging solutions”.
These are inter-related areas. ADM Ventures, the corporate venture capital unit of US-based food group Archer Daniels Midland, and peer Cargill committed undisclosed amounts to France-based venture capital firm Seventure’s Health For Life Capital Fund II, which achieved its first close towards a €200m ($225m) fund size.
Darren Streiler, managing director of ADM Ventures, said: “Seventure can help meet the long-term demand we see as the result of the convergence of food and pharmaceuticals and consumers looking more towards bioactives and nutrition for wellness solutions.
“With a better understanding of how the microbiome ecosystem works, we can develop functional ingredients for dietary supplements and food and beverage solutions targeted to help improve overall health. We are focused on looking at new, innovative solutions that can lead to a more balanced bacterial system in your digestive tract, otherwise known as a healthy gut, and can help lead to better health.”
Chuck Warta, president of Cargill’s health technologies business, added: “Microbiome innovations are now impacting many industries such as food, pharma, healthcare, retail, agriculture and animal feed and health, providing great opportunities for growth.”
In addition, as artificial intelligence (AI) from Google-owned DeepMind helps to uncover the seemingly impossible by, for example, modelling proteins in three dimensions, this enables labs to help build or grow proteins and and the other blocks that make up plants and animals.
It can also use plant or cell-based technologies to replace meat, seafood and dairy. Meatless meat is definitely catching people’s attention, given the post-flotation performance of Beyond Meat and others, as identified in March’s special report on agtech. Singapore became the first country to allow US-based Eat Just to sell lab-grown chicken meat.
Zikooin, a South Korea-based startup that turns grains, oats and nuts into Unlimeat, an alternative to local beef, has just raised $4m in a series A round, while UK-based, University of Exeter spinout Devon Garden Foods secured funding to launch its plant-based milk product from Santander UK to increase digital marketing efforts.
Benson Hill raised $150m in October to combine AI and big data technology with biology to determine the best plant breeding methods, in theory facilitating the development of better plant-based foods and ingredients.
Wheatsheaf Group, the agtech-focused family office of real estate owners Grosvenor Group, co-led Benson Hill’s A round with GV, the corporate venturing unit of internet group Alphabet, and a syndicate including a supermarket chain, Emart, and crop trading company Louis Dreyfus Company (LDC).
Wheatsheaf hired Katrin Burt as managing director a year ago from Syngenta Ventures, the corporate venture capital arm of one of the world’s leading agribusiness and seed companies, Syngenta. LDC asked Max Clegg to head its corporate venturing unit, LDC Innovations, at about the same time.
Syngenta has remained focused on the area despite Burt’s departure. The firm said US-based startup MycoTechnology, which develops a natural food processing platform that uses mushrooms to address critical issues in product development, had won $1m from its Radicle Protein Challenge, which aims to uncover companies transforming the future of protein. The runner up was the aquaculture-focused food production firm BlueNalu, which raised $250,000.
The wider focus is beyond the dining table to “how to replace the grocery store”, according to venture capitalists, such as Andrew Ive, a founder at Big Idea Ventures with Tom Mastrobuoni, former partner at meat company Tyson’s corporate venturing unit.
Taking plant-based ‘tubes’ (the European Parliament recently ruled they could be called ‘sausages’ in a win for the sector) out of the vegetarian aisle or store and across the rest of the grocery store without consumers having to compromise or change their taste or texture preference profile builds demand and if proteins or other nutrients can be delivered at lower cost or land and water usage increases supply.
In addition, animal products are the second-largest contributor to carbon dioxide emissions and climate change, after transport, so alternative providers could help towards a net-zero target.
There is an additional benefit to human health if there are fewer factory-farmed animals needing antibiotics or unintended crossover vectors for disease and species leaps.
As Ive said: “Plant-based foods is a historic event versus incremental additions to food groups, such as an extra soda or candy bar.”
Allied to reductions in plastic packaging possible with plants, sustainability targets this decade become more feasible. But to do so requires scaling up and avoiding too many issues, such as Soylent, the meal-substitute drink company backed by GV, which has undergone leadership changes and Just, which makes a vegan egg-like mixture, which faced – now dropped – scrutiny from the US Securities and Exchange Commission.
Investors have been convinced with the opportunities with a big rise in average round sizes and nearly $2bn invested in agtech startups this year, according to GCV Analytics, excluding buyout-type deals, such as Blackstone Group backing oat-based milk alternative provider Oatly.
Ynsect raised $372m in October to scale up its insect-protein factories, while Kees Aarts, founder at protein developer Protix, noted the uneven levels of state aid between countries that could affect the entrepreneurial outcomes. Governments have been shocked by the relatively fragile state and global interdependence of food supply chains through the covid-19 disease. Provenance and food safety are high among people’s concerns around the world, whether in the UK over potential imports of chlorinated chicken to Chinese parents’ worries over baby milk poisoning.
Africa’s demographics and market is drawing attention, albeit from a low base.
Grey Matters Capital invested $220,000 in Nigeria-based agtech Farmers Pride, while Subtropico invested $1.5m in SwiftVee, a South Africa-based livestock auction platform.
The US, however, remains the centre for most investment, according to GCV Analytics.
Singapore state-backed Temasek is one of the sovereign wealth funds most focused on food given the island’s lack of space or natural resources, and recently committed to VC firm Bits x Bites, which held a $30m first close for its China-focused agtech fund.
And state support is leading to cross-over opportunities, such as Polish stock exchange GPW setting up an agriculture fund with Poland’s National Centre for Agricultural Support in July. GCV Analytics has tracked 50 ag-focused, corporate-backed venture fund launches in the past five years, including Belgium-based Astanor Ventures’ $325m fund, which has backed Infarm and Ynsect, and UK-based Veg Capital, which is run as a non-profit.
Thai Union Group this year has set up a $30m corporate venturing fund as well as commitments to external VCs, such as VisVires New Protein. Gerard Chia, founder at VisVires New Protein and the general partner of its first two funds, said only six years ago foodtech was just a concept when it backed Ynsect at its pre-seed round. Now there could be as many as 50 companies offering insect-related products.
However, Chia’s broader focus is on how technology can meet industry’s needs, such as identifying a chicken’s gender, waste mitigation and food safety or the vector between food and health.
But as Samir Kaul, partner at VC firm Khosla Ventures, told the Financial Times: “I was getting laughed out of town when I said I was going to invest in a plant-based burger [Impossible Foods] in 2011.
“I think people really thought I had lost it.”
Less than a decade later, Impossible is valued at more than $4bn and has its animal-free meat products in Burger King and Starbucks, while Beyond Meat is valued at almost $10bn in the public markets, the FT added.
Capital will continue to flow given a total available market of potentially nine billion people in the future. After all, “physiological” is at the base of Maslow’s hierarchy of needs.
