EMERGING TECH RESEARCH

Foodtech
Q1 2020

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PlatformContents
Q1 highlights & updates: Foodtech

3Credits & contact

Executive summary

4Alex Frederick

Key takeaways

5

Senior Analyst, Emerging Technology

VC activity

6

206.480.1352

Foodtech market map

7

ResearchSegment deep dives8Intermediaries and delivery

8

Food suppliers

16

Plant-based meat & dairy

33

Cellular agriculture

41

Supplemental materials

49

PitchBook Emerging Tech Report: Foodtech

alex.frederick@pitchbook.com

analystresearch@pitchbook.com
DesignCover and layout by Mara Potter

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Executive summary
The COVID-19 pandemic has drastically affected how consumers obtain food.

Foods and Rebellyous Foods) are likely struggling more than those focused on grocery

Government-mandated shelter-in-place orders and shuttering of non-essential businesses

sales channels 3) supply chain disruption could be exacerbated as the industry's supply

has driven a surge in demand for food delivery and ecommerce services and has caused

chain is newer and not as durable.

more consumers to prepare meals at home. Although the pandemic has largely hurt
restaurants, downloads for restaurant and grocery delivery apps were up significantly inMarch, and we expect to see accelerated adoption in the near term. Meal kit providers,which have been struggling in a challenging operating environment, have noted revitalized
consumer interest due to the pandemic, with Blue Apron (NYSE: APRN) stock up over 4x
from pre-crisis levels.
Our long-term views on delivery services remain consistent with our pre-pandemic views.
Restaurant and grocery shopping habits will continue to shift digital as more consumers
use apps and marketplaces—a trend that has been accelerated by the pandemic. Whilerenewed demand for meal kit delivery provides a second chance to build a more durable
product-market fit with consumers, we continue to have longer-term doubts about thesustainability of this business model. In the near term, high unemployment and a weakeconomy will favor employers when it comes to labor supply. However, longer-term, wesee opportunities for automation in production and delivery. Food robotics, autonomous
delivery, fresh vending concepts and other novel technologies will facilitate human-freeinteractions that could provide speed, safety and reliability.

Cellular agriculture does not appear to face any immediate impacts from the pandemic
because there has not yet been any commercialization in the industry. However, webelieve that significant disruption to the investment environment could negatively affectcompanies within the segment. Prolonged economic turmoil will lead investors to focus
funding into cash flow positive opportunities, potentially starving cellular agriculture
startups and extending development cycles.
This report provides an overview of the emerging foodtech ecosystem and the key VCbacked foodtech companies attracting attention and VC investment. Our foodtech market
map segments foodtech companies that have received VC funding from 2015 to date.
We have limited our search to only those companies that have received over $10 million
in total invested capital and other companies that we felt were important to highlight.
We recognize that some startups could belong in multiple segments or even in different
industries (i.e. restaurant tech, agtech, ecommerce, mobile commerce or robotics) andhave placed them within the categories that best match our understanding of the primaryconsumer use case. Overall, we view the burgeoning foodtech ecosystem as vibrant,
unique and poised for significant technology-driven growth.

The pandemic is affecting consumption patterns, as well. We believe COVID-19 is affecting
plant-based foods in the following ways: 1) the spike in grocery sales is potentiallyattracting new customers to try plant-based products if traditional meat and dairy aretemporarily out of stock 2) providers focused on restaurant sales channels (i.e. Impossible

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Intermediaries & deliveryINTERMEDIARIES & DELIVERY

Opportunities

Leveraging ridesharing infrastructure: Delivery companies such as Indonesia's Gojek andSingapore's Grab Holdings are leveraging existing ridesharing infrastructure to expand

Category expansion: Competition and commoditization have driven providers to seek ainto an increasing number of businesses. Food delivery is quickly becoming a leading

new avenue for growth. The coronavirus crisis has also created opportunities to deliver

revenue driver for these super apps. A growing list of services—including medicine

other kinds of products in new merchant categories. DoorDash announced on April 1,delivery, auto repair, home cleaning, massage services—are helping build stickiness on2020 that it would be partnering with convenience stores to offer household products.

these super app platforms.

We expect to see more expansion into convenience by major food delivery providers.

Serving smaller cities and rural markets: The intermediaries & delivery market is highly

Delivery aggregation management: A growing headache for restaurant operators iscompetitive for several reasons, including limited price elasticity of consumers and larger

managing multiple providers of delivery and ordering services at the point of sale. Some

providers' ability to subsidize pricing via VC funding. To help reduce costs, most operators

restaurants may utilize eight or more tablets, cluttering the register, complicating ordercompete in large urban markets where travel distances are short, and the concentration

pickup, and eating up time and resources. Order aggregation startups such as Chowly andof drivers, restaurants and consumers is high. Consequently, many smaller cities are

It's-a-Checkmate seek to reduce this complexity by integrating meal delivery platforms

underserved, leaving an opportunity for startups to penetrate those markets. Both

into a single interface. Other startups in this space include Ordermark and Olo.

DoorDash and Wolt have started focusing efforts on suburban markets, turning to AI &Delivery robots: Autonomous delivery could help propel the next phase of growth forfood suppliers. As last-mile delivery is estimated to comprise as much as 28% of totaltransportation costs, delivery robots and other driverless methods could dramatically
improve the economics of food delivery for both suppliers and consumers. Autonomous
delivery startup Nuro partnered with Kroger in early 2019 to pilot autonomous grocery
delivery. Recent autonomous delivery legislation passed in California is a notable
milestone paving a regulatory path for future delivery robots. We expect that it will beyears before autonomous delivery is ready for mass consumer adoption. Existing players
include Nuro, Starship, Kiwibot and Robomart.

ML technology for help. Continued development of these technologies and autonomous
delivery are likely to help drive opportunity in these markets.

Considerations
Maturing market dominated by incumbents: An overcrowded playing field has led toconsolidation and aggressive competition. Market leaders are solidifying positions in manylarge metropolitan markets. GrubHub and Uber Eats represent approximately 70% of US
food delivery and are rapidly expanding in regional markets.³ We believe this leaves little
room for new entrants without differentiated offerings.

3: “Foodservice Delivery in U.S. Posts Double-Digit Gains Over Last Five Years With Room to Grow,” The NPD Group, April 3, 2018

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SEGMENT DEEP DIVE

Food suppliers

SEGMENT DEEP DIVE

Cellular agriculture

CELLULAR AGRICULTURE
Figure 34.

Cellular agriculture VC deals by total capital raised ($M)$250
Perfect Day
Series C ($140M)

$200

$150
Total raisedMemphis Meats
Series B ($161M)$100
Perfect Day
Later VC ($35M)

Modern Meadow
Series B ($40M)$50

Nature’s FYND
Series A ($33M)

Memphis Meats
Series A ($17M)
Modern Meadow
Series A ($11M)

GeltorSeries B ($50M)

Clara Foods
Series B ($40M)

Memphis Meats
Series seed ($5M)$0January 1, 2011

May 15, 2012

September 27, 2013

February 9, 2015

June 23, 2016

November 5, 2017

March 20, 2019

Source: PitchBook | Geography: Global | *As of March 31, 2020

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SUPPLEMENTAL MATERIALS

Figure 38. NOTABLE FOODTECH VC DEALS

Additional VC data
Figure 37.

Foodtech VC deal activity by stage
300

$18

$16

November 13, 2019

October 29, 2019

$700M Series G
Lead investor(s):Sands Capital Ventures,
Darsana Capital Partners$140M Series C
Lead investor(s):Temasek Holdings

October 28, 2019$33.3M Series A
Lead investor(s):Bessemer Venture Partners

November 25, 2019$23.9M Series A
Lead investor(s):V2 Food

November 18, 2019$16.1M Early-stage VC
Lead investor(s):Undisclosed

October 17, 2019$12M Series B
Investors:
The Ingenious Group250$14200$12$10150$8100$6$450
$2$00
2010

2011

2012

2013

2014

2015

2016

2017

2018

Angel & seed value ($B)

Early VC value ($B)

Later VC value ($B)

Angel & seed count

Early VC countLate VC count

2019

2020*

Source: PitchBook | Geography: Global | *As of March 31, 2020
Source: PitchBook | Geography: Global | *As of March 31, 2020

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About PitchBook
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