VC Investments Converse on Agtech & Foodtech: Bringing Emerging and Mature Markets Together
By: Leehe Skuler
Tags: Sdgs, Impacttech, Foodtech, VC, Agtech

Agri-tech and food-tech are one of the fastest growing sectors in the world with 250 percent growth in the last five years. Food and agriculture are also sectors with massive impact on global health, on poverty, on our environments, on the natural world, on supply chains and markets. Not surprisingly, the sector has a strong pull for impact VCs.

The growth in tech innovation is facilitated by global food and ag-tech VC, in both emerging and mature markets. However, the leaders of these markets rarely convene. As a result, the conversation between VC investors from both markets last month was fascinating, spanning exciting innovations in the field, market trends in food and agriculture in the US and in Africa, and real opportunities for global collaboration.

The panel represented impact VC investors from Silicon Valley, Ghana, Kenya, and Israel and was a product of an exciting new partnership between the Global Impact Tech Alliance (GITA) and the Collaborative for Frontier Finance (CFF). GITA is a global network of investors and thought leaders working to increase the capital and scale SDG-related tech innovation. CFF is a multi-stakeholder initiative aimed at increasing access to capital for small and growing businesses in emerging markets.

There are large systemic changes and trends that are changing the way the world grows, consumes, and think about food. Most of these issues were raised during the September 29 webinar, including the giant growth of plan-based “meat” producers (e.g. the most successful IPO in 2019 was Beyond Meat), the need for innovation in food production in developing countries which struggle with food-security, and technologies that allow sustainable, environmental, and efficient food production world wide.

Both GITA and CFF believe that early-stage investors from around the world must cultivate global cooperation, dialogue, and outlook to ensure the technologies they support can fulfill their potential and to integrate an understanding of food challenges everywhere. For example, plant-based food producers should not overlook meat consumption trends in emerging and frontier markets which include 7 billion people, if they wish to support systemic change. More importantly, by working together, value-driven investors can support “leap-frog” advances in food and agriculture — similar to those witnessed in mobile phones and solar home systems adoption.

WEBINAR SUMMARY

As mentioned, a major current trend and driver for growth is the growing market for plant-based alternatives to animal food products. The keynote speaker in the event, Jake Crumbine, Head of Global Influence at Impossible Foods (estimated at $4B) represented a major actor in the sector. Jake described the company’s mission: “making earth awesome again by transforming the global food system, specifically through creating meat, dairy and fish products directly from plants, while being kind to the environment.” Impossible’s technology produces plant-based hamburgers using 96 percent less land, 87 percent less water, and 89 percent less GHG emission. One of the biggest challenges they faced was rigidity in public opinion and behavior, so the founder focused on developing delicious and affordable alternatives while working with influential chefs. Within four years, plant-based burgers became one of the top 10 growing menu items in the US, and 38 percent of adults are already eating plant-based meat at least once a month.

Plant-based meat is not the only food-tech innovation struggling with public opinion. Yvonne Ofosu-Appiah, CIO of Wangara Green Ventures faces similar challenges, as Wangara aims to solve one of Africa’s main problems — Food Security. With a population growth rate of 2.7 percent a year, the population in the continent is estimated to reach 2.4 billion in 2050, from 1 billion today. One of Ofosu-Appiah’s portfolio companies Aspire Food Group, produces protein from an insect source — a climate friendly and sustainable method for producing large quantities of protein. While protein sourced from insect is acceptable in China, Japan, and Mexico, the African population is still not open to this concept. As a result, Ofosu-Appiah promotes insect-based protein direction toward the production of animal feed (which accounts for 36 percent of global crops) freeing up more resources towards human food.

Another issue which investors in the panel focus on is sustainable supply chain development. Victor Ndiege, CEO of Kenya Climate Ventures (KCV), focuses on evolving and innovative technologies that can increase efficiency in the supply chain. Hydroponics, a KCV portfolio company, developed a technology for growing crops in high mineral and nutrient settings without the need for soil. In the African context where land ownership is not prevalent in low-income populations, and 70 percent of employment is in small and medium businesses — Hydroponics changed their focus from growing crops to manufacturing and selling the necessary equipment for hydroponics agriculture. This decision not only increased financial gain but also strengthened the local communities and economic resilience.

Eyal Cohen, a Managing Partner at Copia Ag & Food, believes in cross-sector collaboration as well. Copia created global collaborations with agricultural research institutes and industrial companies from all around the world. Through this unique VC model, Copia supports tech solutions from the research stage all the way to the market by building a business model where each entity focuses on what they do best: scientists focus on research and modifications, industry leaders focus on piloting solutions, manufacturing, and distribution, and Copia invests and manages the process. An example of Copia portfolio is ToBee2, a technology that is fighting the main cause of honeybee deaths around the world. This is an issue with massive implications for sustainable food production and food security, as 84 percent of the 264 crop species and 4,000 plant varieties exist thanks to bee pollination (according to the FAO).

Finally, webinar participants had the wonderful opportunity of meeting Victor Friedberg, a global leader and champion of sustainable food and plant-based solutions. Friedberg is the chairman and founder of Foodshot Global, co-founder and executive chairman at S2G Ventures, cofounder and former executive director of Launch, and former executive director of Wired Magazine. Friedberg spoke about his portfolio company, Lavva, a market leader in plant-based alternative dairy which is recently introducing a “superfood” component in their products. Lavva has adopted a holistic approach in its production: building a global supply chain to support product development of this product, providing health-care, fair wages, and educational resources to their employees and global farmers. Lavva is one of the few young companies with a business model that can address global challenges by addressing trends and demands from American and European through social and economic solutions in developing countries. Friedberg also presented the important collaborations between emerging and mature markets through Foodshot Global, a non-profit which brings together leading universities, corporations, government organizations, venture funds, banks, foundations, and non-profit organizations to advance the SDGs related to food.

The webinar closed with discussions and final remarks regarding the potential for Silicon Valley and Israel based VC firms to work together with African and other global early-stage investors, to truly advance sustainable ag-tech and food-tech solutions. Both CFF and GITA hope to continue this conversation and support true collaboration in any we can.

This summary was prepared by Karen Blumenthal, GITA Consulting Associate