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Tuesday 28 June 2022

E Tipu 2021: AgFunder’s hot tips for VC foodtech investment

14th May 2021 By Bridget O'Connell | | @foodtickernz

Food as medicine, medicinal plants and food personalisation are all the radar as categories of opportunity for US agrifood venture capital investor, AgFunder.

Speaking at the Boma NZ E Tipu 2021 conference in Christchurch via videolink, the online venture capital platform’s Louisa Burwood-Taylor shared insight about the investor’s new alt-protein fund, and other areas that were “exciting” to the Silicon Valley-based firm.

Louisa Burwood-Taylor

“Food as medicine is one of the areas I find really exciting – if you think about the US, some 88% of the population is metabolically unhealthy – so that means high blood pressure, high cholesterol, diabetes or pre-diabetes. So they – all of them – thinking in today’s context, are at a higher risk of Covid-19 compared to the 12% who are metabolically healthy.”

In this vein, there were companies now researching phytonutrients – the natural compounds found in plant foods such as vegetables, fruit, whole grain products and legumes – to learn more about how and why they are beneficial to human health, she said.

Companies researching medicinal plants for use as an alt-protein, were another area of interest, while businesses delivering meals “that are exactly assumed to your health needs and goals and ailments” also got a mention.

These included Connecticut-based startup, Project Well, which is an online marketplace that delivers personalised meals to consumers with diet-sensitive chronic disease and food insecurity. It had just raised a US$2m seed round from a number of investors including angels from Formation Capital.

“So then it gets in to personalisation, which is another trend that has been on the horizon for a while now, but is set to accelerate as research into the gut microbiome improves and nutrition science slowly but steadily improves.”

Last but not least, according to Burwood-Taylor, “the buzz word of 2021 is probably carbon market or regenerative agriculture.”

Since 2019 regenerative agriculture was a phrase Burwood-Taylor said she heard people using more and more, “food brands have started to use it – its not just people within our universe – this has become a phrase used by consumers.”

“Startups started introducing it into their marketing and it now goes hand in hand with the discussion around carbon markets. Today I am getting lots of companies on the farm software side pivoting slightly to provide carbon measurement and incentivisation technologies and the potential for farmers to sequester oxygen from the atmosphere is really great.”

Burwood-Taylor also gave some insight into what AgFunder’s new US$20m alt-protein fund would be doing to try and secure the best investments in that space.

“Diversity is key,” she said. “They are going to invest into around 15 or 20 investments in a US$20m fund, and they are going to surround themselves with the best investors. Sometimes in categories when it get a bit more hype-y or a bit bubbly you can have the dumb money come in – less educated money coming in.

“So you make sure you do deep due diligence, which some of these other less experienced VCs cannot do.”

You also ensure that the companies you are investing in have the “commercial acumen to get to market fast so with all this competition going on you want them to be making revenue as soon as possible.”

And finally, “you ensure these companies are future proofing thinking about their customers of the future.”



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