How Plants and Crops are Transforming our Food System
The agriculture & food sector has seen a wide range of companies gaining traction over the past few years, ranging from food waste reduction technologies to companies aiming to revolutionize the current food system. For instance, technological breakthroughs in sensing and monitoring have enabled food processors and restaurants to better manage their inventory to prevent excessive food wastes, while the emergence of resource sharing-based business models help distribute food that would otherwise become waste.
As part of this transformation of the existing food system, we have seen numerous investments into various food-tech start-ups, including high profile companies such as Impossible Foods, Hampton Creek Foods, Beyond Meat, Ripple Foods, and many others. Specifically, these companies are developing alternatives to traditional food items that would be more sustainable without sacrificing quality and tastes.
One recent activity worth highlighting is the establishment of a new VC fund dedicated to transforming the existing food system. PowerPlant Ventures, a Los Angeles-based venture capital investor, announced the closing of the firm’s $42 million debut fund aimed at transforming the existing food system by “leveraging the power of plants.” The fund will invest in plant-based food and technology companies that deliver better nutrition while improving the sustainability of our food system.
It’s not surprising to see another investor joining the agriculture and food sector. As more consumers are shifting their mindsets towards a healthier diet and lifestyle, demand for plant-based foods should see gradual increases as well. Therefore, a first-of-its-kind fund that is dedicated to plant-based foods could prove to be an effective approach in today’s ever changing food industry. The trend is also evidenced through our monitoring of the market, as seen by the uptick in crops-related venture equity investments since 2013.
Besides the few high-profile companies that were mentioned above, many new players have emerged since 2015. For instance, Sostena was formed in 2016 with an $8.1 million Series A funding to develop a hybrid fruit and vegetable seed. Other newly formed companies, such as Agrilyst, Gamaya, and AgriScience, are developing analytics-based technologies to improve crop yield.
We will likely see investments continue to rise over the next few years as more capital is being dedicated to crop-related innovations. As with any investment cycle, we will likely see success stories, as well as failures, as we continue to monitor activities in this subsector.