OurCrowd launches $30 million FoodTech investment fund
A global food shortage is looming, a side effect of climate change and rapid population growth made worse by Russia’s invasion of Ukraine. But experts believe that innovations in food technology can help stave off disaster.
OurCrowd, a leading venture capital investment platform based in Jerusalem, is launching a $30 million FoodTech Fund to support the development of new food technology. The fund will invest in a diversified portfolio of startups exploring alternative, environmentally friendly ways to feed the planet’s burgeoning population.
“The double challenge of food scarcity and the environment will not be put to rest by nibbling around the edges of the problem,” says Jon Medved, Founder and CEO of OurCrowd. “We need to attack this crisis on all fronts and swallow it whole.”
FoodTech addresses new ways of increasing food production while reducing the greenhouse gas emissions that traditional agriculture produces in destructive quantities. These include alternative proteins, technology to reduce food waste and increase efficiency, robotics, vertical farming, meal kits and more.
“The term FoodTech describes the technology-driven transformation of the food industry,” says Etai Kramer, OurCrowd Managing Director and Head of Funds. “It covers a wide range of sectors including agriculture, production, processing, packaging, and distribution.”
“The FoodTech sector is growing rapidly and innovative startups are developing new technologies and business models to address challenges and disrupt the food industry,” Kramer says. “As technological advancements make it easier to produce, distribute, and prepare food, the sector has the potential to revolutionize how we eat by making healthy and sustainable foods more accessible and affordable and by addressing issues of food security worldwide.”
$30 million fund
The OurCrowd FoodTech Fund aims to raise $30 million that will be invested in 15 to 20 technology opportunities in a variety of geographical areas and stages. OurCrowd is well-placed to charge ahead with such a fund.OurCrowd is Israel’s most active FoodTech investor, and the ninth most active globally, with $95 million deployed in 17 FoodTech companies worldwide, including nine in Israel.
It has been investing in food technology since its 2018 financing of alternative protein-developer Beyond Meat, which had the world’s most successful stock market launch in 2019.
OurCrowd’s location in Jerusalem gives the fund a strategic advantage. Israel is a global leader in alternative protein investment, second only to the US. That puts OurCrowd in prime position to leverage Israel’s cutting-edge technology and the local network of entrepreneurs, scientists, investors and in-house food incubators.
Its FoodTech portfolio currently includes Mermade Seafoods, Profuse, BlueTree Technologies and Ripple.
“We need to find new ways to produce fish, meat, seafood, eggs, milk and other proteins,” Medved says. “We need to replace animal proteins with alternatives produced from plants, lab-grown cells, insects and other sources. We need to replace animal feed with carbon-zero alternatives, and we need to recycle waste more efficiently.”
“We must also reinforce the global food chain against future diplomatic and military shocks,” he says.
OurCrowd also operates the Fresh Start FoodTech Incubator in Kiryat Shmona that focuses on early-stage startups, and the Sprout AgTech FoodTech Incubator in New Zealand. Incubator partners include Tnuva, Israel’s largest food company, Tempo, Israel’s leading beverage company, Finistere Ventures, a leading global VC specializing in food and agriculture, and Fonterra, the largest dairy company in the world.
Growing demand
According to estimates compiled by the UN Food and Agriculture Organization, the world will have to produce nearly 60 percent more food by 2050. With global demand for meat and seafood at an all-time high, supply will not be able to keep up. Even now, 811 million people – about 10 percent of the world’s population — go to bed hungry.
Traditional agriculture, meanwhile, has contributed significantly to climate change, with food production accounting for 37 percent of global greenhouse gas emissions, according to a study by the University of Illinois. Most of it is related to the production of animal-based foods.
Meat production has more than tripled over the past half century. The growing demand for seafood has caused massive overfishing and cut marine life by half between 1970 and 2010. The Good Food Institute Israel estimates that a transition away from animal protein has the potential to deliver up to 20 percent of the emissions mitigation the world needs until 2050.
Half wasted
Meanwhile, food is being wasted in exorbitant quantities. Up to $1.2 trillion of food – nearly half of all food produced globally — is wasted each year, in large part because of spoilage.
“How are we going to handle this food crisis where famine already seems to be imminent and the planet’s population is set to explode to nearly 10 billion people?” asks Medved. “There has never been such a need before to tackle the greenhouse gas impact of animal farming and industries like dairy. Food waste is outrageous and unsustainable.”
These challenges have sent worldwide appetite for FoodTech venture investment soaring. A record $39 billion was poured into startups in 2021, a 150 percent increase on the previous year. More than $91 billion has been invested globally in FoodTech in the past five years, yielding 254 exits.
“This is the moment where technology is being called upon to lead the way because of climate change and food shortages,” Medved says. “There is so much we need to do, and food tech solutions are front and center in investor attention.”
For more information on the OurCrowd FoodTech Fund, click HERE: