Based in Israel, Marianne Abib-Pech is the Founder of LTF Partners, an impact investment firm with a focus on Food and Health By Nutrition. Former columnist for Global Corporate Venturing and Author for the Financial Times, Marianne is on a mission to bring to us Israel Food and Ag Tech hidden gems. Discover her take on the rich and fast-evolving Israeli ecosystem.
There is a lot to be said about Israel ’s innovative and entrepreneurial spirit. Despite the challenges the country faces in geography, size and… diplomacy, the ever-creating Israeli minds have managed to bring to the world life-changing items and devices, from drip irrigation, electric car grid, disk-on-key to…. cherry tomatoes!
Cherry tomatoes? Funny you should ask!
Thanks to the vision and impulse of leading Israeli Food and Beverage company Strauss, in less than 10 years, Israel managed to establish a one-of-a-kind diverse and highly integrated food focused ecosystem.
It harmoniously meshes Academia involvement (Technions and the world-class famous Wiseman Institute) and Government support (Israel Innovation Authority, deployed through prominent private and public incubators (the likes of FoodTech, Sparks Food, Kitchen Food) and enjoys access to savvy investors money (JVP, GreenSoil, OurCrowd or the recent new comer Peak Bridge to quote just a few). To put things in perspective more then 10b$ were deployed in the tiny country in the last year alone, more than in Europe!
As such, over the last seven plus years- not only did they work on the key ingredients of any successful pre-dinner nibbles! But Israeli start-ups truly played a decisive role in shaping the future of the ever-growing global food sector.
Their contributions are to be seen on the entire spectrum of Food and Ag tech.
- In the novel ingredients space, DouxMatok is reinventing sugar thanks to a patented sugar reduction solution that retains the texture, sweetness, and appearance of sugar.
- If we think alternative proteins, Innovopro focuses on chickpeas based sustainable dairy and meat alternatives and successfully closed an 15M$ Serie B last year.
- Moving across to the somewhat futuristic meat, Future Meat, just completed a 27M$ funding round in February this year. The company is set to build its first cultured meat production plant near Tel Aviv, an impressive achievement.
- Zooming in on supply chain, Tipa Corp, raised 25M$ in 2020 for sales expansion of its unique biodegradable packages for not only food and beverage sectors, but also fashion industries… a striking example on how to early factor strategic pivot in an equity story!
In such a buoyant climate, what can we expect next from Israel, the land flowing with milk and honey?
Well, a lot more!
There is a current subtle shift of focus in the country. All over, companies are looking to apply the start-up nation core strengths in AI, robotics, data, sensing and computation, to address increasing needs for sustainable food productions technologies.
At the same time, COVID-19 pandemic put a heighten emphasis in the health by nutrition, and precise nutrition segments that were slightly underserved.
The following start-ups, at different stages on the investing curves are definitely the ones to watch.
GreenOnyx has developed a unique ingredient
This ingredient is the most nutrient dense fresh vegetable on the planet. GreenOnyx has also developed a vertical farming technology to produce it.
Their vision is to allow for easy, convenient consumption of fresh green vegetables to reach the WHO required 200g a day and lead to optimal health. They are currently closing a close to 15M$ Equity round.
Edete is working on a controlled and manageable artificial pollination solution to increase yield.
Currently looking at almond orchards, the technology could be expanded to others crops. They engaged into field trials in Israel and Australia last year and will be accelerating plans this year.
EggXYt is developing proprietary technology that detects the gender of chick embryos immediately after the eggs are laid
They recently won MIT Solve Sustainable Food Systems Challenges. It would prevent chicks from hatching unnecessarily and address the common ethical, environmental, and economic problems of egg and poultry production. The collaboration with MIT will most definitely fast-track their road to commercialization.
What is happening on the investor side?
2020 saw a steady increase in international partnerships with local incubators and or VCs. Mondelez International partnered with Food Kitchen to explore snacking sector closing one of their first investment in Torr FoodTech at the end of last year, while Mars International partnered with JVP. In parallel, what looks like bigger scale incubators have now been established in the northern part of the country, the National Food Institute in the Galilee food Valley and Fresh Start in the northern town of Kiryat Shmona – supported by prominent US Ag Tech investors Finistere.
More noticeably, at the beginning of the year, world famous Global Food Institute landed in Israel to help fast track development of plant-based and cultivated meat proteins alternatives.
All seems well under the sun for the 300 to 400 food and ag tech start-ups recorded by the Israel Innovation Authority at the end of the year… or is it?
The inherent Cassandra that I am, questions: How would they secure the next phase of financing for their development, faze and overcome the famous Death Valley of Pre-Commercialisation and Serie A funding?
In a sector that has, yet, to fully establish itself as a proven asset class for investors; In a country where industrialization remains more the exception than the norm and where full value realization generally happens outside of national frontiers, mostly in the US or with a bit of arm twisting on intellectual property in China.
I cannot help but wonder who would be ready to opt-in for follow-on rounds or start playing altogether?
Maybe this is where the strength of the local ecosystem and the power of the Start-Up nation aura for Food tech purposes is to be put to the test.
Maybe this is when Israel would truly prove its ability to shape the food and agricultural sectors of tomorrow.
Maybe this is where the international investors community can come and help…
Crédits photos: #207594637 – ©Sarit Richerson – stock.adobe.com
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