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Investors Get More Bullish With Food Tech Startups

Food tech startups

New quoted author Marta Zaraska that there will be 10 billion people on Earth by 2050 and feeding them will take creativity and some unpalatable solutions. Or at least, they sound unpalatable now, but with a little help from bold food tech startups, they might not be so bad after all.

“Perhaps we can learn to love algae, corn husks and crickets, but what about lab-brown meat, synthetic milk and genetic modification”

“Perhaps we can learn to love algae, corn husks and crickets, but what about lab-brown meat, synthetic milk and genetic modification”, the author of  Meathooked: The History and Science of our 2.5-million-year obsession with Meat was quoted by Food Navigator.

Investors have not taken to food tech in recent years, with the majority of them looking at digital startups for a variety of reasons. Traditionally, venture capitalists have backed technology which could be leveraged over a short time, with a high return on a smaller investment. So far, the gamble has paid off, leaving food tech with a small group of investors who specialize in food or protein. Additionally, food tech has not been a disruptive force unlike some digital properties which have gone on to the IPO stage with massive returns for their early investors.

In recent years, there has been some headway in directions for food. Food tech’s traditional longer gestation time has shortened, and the capital required has also dropped dramatically.

Food Tech Startups infographic

The lead has been Impossible Foods which created the “burger that bleeds.” This took five years and €75 million ($80million) funding for research and development even before any burger was put on the market. Last summer, New York’s Momofuku Nishi restaurant hosted the Impossible Burger, as it was finally presented to the gastronomic world. It has also found its way to the mainstream as it has been on the menu of the Bareburger chain.

Another startup in the investors’ radar is San Francisco based Memphis Meats. It is pioneering chicken strips grown in the lab, and is considered as one of the biggest technological leaps for mankind. It requires on 10% of the land and water, as well as total greenhouse gas emissions compared to conventional meat production.

Investors are finding food tech startups to be correctly answering the basic questions of ethical, environment-friendly research leading to healthy food. This is a pleasant development that will leave a lasting impact on the industry. It can open plenty of doors in terms of business and investment opportunities.

The investments in the field are expected to boom with the proof provided by the leading food tech innovators. This is not only true in the United States but also in Europe which has lagged in food tech startup investments. It is estimated that the health supplement market could be worth up to €35 billion ($40 billion) by 2020. There is also the functional foods, like protein, which is in a separate category altogether. Protein consumption is growing worldwide and this could be an even bigger market for food tech companies, as well as be a boon for their investors.

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