Where to Start Your Foodtech Startup — Part II

Anna Ottosson

Great startups can come from anywhere, but the decision of where you should set up is still an important one for every early-stage founder. In this post we’ll deep-dive into some of the hubs that are especially interesting for high-impact foodtech startups to consider.

Some locations simply offer more than others for startups, in the form of investment, access to technology and research facilities, potential for like-minded colleagues with whom to share ideas and grow a concept together, and way more. Some startup ecosystems can be fragmented, competitive, and hidden to newcomers, which is detrimental for local startups and community growth, so we’re here to help counteract that.

In a previous post, Where To Start Your Foodtech Startup — Part I, we examined some of the pros and cons of Europe, the US, South East Asia and China, with some of the key takeaways illustrated in the picture below.

In this post we’ve taken a deeper look at a few regions and pulled them together as ‘hubs’ in a handy guide. It’s not an exhaustive list by any means, so feel free to send us details of any others we should think about.

  • Universities: while many provide entrepreneurship training, the best universities for startups run programs, venture accelerators and competitions, alongside offering access to entrepreneurial networks, legal and professional resources and funding sources. Plus, they’re hotbeds of great talent, if you’re looking for colleagues or a particular skill set to complete your team.

There are many compelling reasons why you could choose California, not least because the weather is pretty favourable. We know that California in general, and San Francisco and The Bay Area in particular, are home to many of the most successful and well-known tech companies, and it’s also where some of the biggest foodtech companies started out; Beyond Meat, Impossible Foods and Instacart.

Eat Just is one of the most notable startups to come out of the region in recent years, having made giant leaps in plant-based egg and cultivated meat development. Plus, among many others there are last mile delivery tech firm DoorDash, which reached a market value of $60B in its public trading debut in December 2020, and one hour grocery delivery service Instacart, whose latest funding round took it to a valuation $17.7B.

There are three world-class universities for startups and talent located here: Stanford University, University of California, Berkeley and University of California, Davis, all with a plethora of research facilities, and the latter is the world’s second best university for agriculture. However, California can be a pretty expensive place to be, and higher costs can sometimes complicate recruitment and retention of talent.

There are a few accelerator programs and startup facilities located in the region, including:

  • Cell Valley Labs — a flexible co-working and lab space for food tech startups, which has facilities for cell culture, microbiology, fermentation and molecular research alongside a general lab and office set up.

In terms of investment and venture capital, California has many potential options interested in high-impact foodtech startups:

  • Agfunder — based in Silicon Valley, Agfunder is a venture capital firm that has access to a global ecosystem of over 85,000 subscribers through their news outlet Agfunder News, investing in exceptional and bold founders who are committed to building the next generation of agrifood technology companies that will transform our food system.
Photo by Robert Bye on Unsplash

We’ve grouped a few major cities together here because the East coast of the USA is such a hotbed of innovation, world-class education and technology, plus pockets of capital and investment opportunities. This hub consists of New York, Boston, Philadelphia and Washington DC, all of which would be pretty decent locations to site a startup, or you could set up a commutable distance from any of them for (slightly) cheaper real estate options.

In terms of universities, these cities are home to renowned institutions, all of which have spawned some of the world’s best talent: Massachusetts Institute for Technology, Harvard University, University of Pennsylvania, Cornell University, Princeton University, Yale University, Columbia University in the City of New York and Boston University. However, the East coast universities are not quite as outstanding for agtech as some European institutions, which may be an important consideration.

Alongside these, there are various innovation incubators and accelerators throughout the year across the locations, as follows:

  • Chobani Food Tech Residency — New York: this incubator is focused on helping packaged food and beverage brands to scale their businesses, and includes tailored programming based on the needs of the startups, held at Chobani’s premises. Applications are currently closed, and the program only caters to applicants from within the US. Typical investment size: $25k.

Perhaps unsurprisingly, this part of the world has some very active venture capital firms, looking to make investments in startups whose ideas resolve a whole host of issues (and make a whole bunch of money):

  • AF Ventures — investing in consumer packaged goods within food and beverage, health and wellness, beauty, personal care and pet.

New York is the home of 24/7 dining, so it’s no shocker that delivery service GrubHub and meal kit platform Freshly originated here (and have both seen a pandemic-related boom: GrubHub merged with Just Eat in June 2020 and Nestlé acquired Freshly in October 2020), and New Jersey high-end dining delivery service Wonder raised $500M in 2020.

Other examples of foodtech startups from the region include New York based food tech Gastrograph, an ML/AI platform that hopes to predict consumer food preferences for food manufacturers. Through their technology that quantifies the sensory profile of products, the flavour, aroma and texture of products can be optimised for their target demographic; pretty cool. In Philadelphia, goPuff delivers everyday essentials in just minutes. And in Washington, Optoro’s software platform helps retailers optimize the management of returned and excess inventory in a more efficient and cost-effective way.

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In recent years, Singapore has nurtured a big venture capital ecosystem and persuaded a number of foreign technology companies, such as Facebook and now Eat Just, to open their Asia headquarters in the city. The region just made history by being the first country to grant government approval for Eat Just’s cultured chicken bites, which saw them served to diners at 1880 Restaurant in a world first in December 2020. The city has a leading reputation as a food tech innovation hub with a supportive government keen to push forward sustainable food solutions.

There are tonnes of choices of accelerator programs, venture capital opportunities and co-working spaces in Singapore; here are just a few to get you started:

  • Antler — the world’s largest early stage investment platform, working on addressing large global opportunities and challenges by building groundbreaking technology companies. All participants get an individual grant during the first phase of the program to enable them to focus full-time on building their company and products. Then, Antler selects and invests in the companies who will get continued support to accelerate their growth, culminating in a Demo Day. The initial application is a one minute process, so definitely worth a shot. Typical investment size: variable.

There are too many startups to count in Singapore, but some of the most notable include: Alchemy Food Tech, which combines biotechnology and medical technology into everyday foods, with a mission to fight the growing diabetes crisis through lowering the GI levels of popular foods; TurtleTree Labs, which is producing lab-grown dairy milk using biotechnology that recreates the exact composition, functionality and taste of cow’s milk, at a fraction of the carbon footprint when compared to conventional dairy farming; Shiok Meats, which uses cellular technology to harvest lab-grown seafood as a more sustainable alternative to traditional seafood farming.

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Hong Kong is a melting pot of culture, technology, innovation and more, but a real impediment to companies hoping to set up in Hong Kong is the cost of office space or developable land. The central Hong Kong office market is by some distance the world’s most expensive, according to property company CBRE, and high land prices in the territory are sustained by tight government control over available supply. Cyberport and Science Park provide subsidised space for start-ups, which could be viable options for locating office space and research facilities within the city. Plus, the Hong Kong Startup Council is a platform designed to connect startups, Hong Kong entrepreneurs and investors, so could be a useful starting point for further information.

Alongside these, there are accelerator and incubator options available for startups:

  • Brinc — the Food Tech Program comprises six weeks of on-site training followed by six weeks remotely, and the fund will invest $80,000 for a negotiable equity percentage. The catch, though, is that each startup needs to pay $30,000 to be included in the cohort. Applications are always open because the programs are so frequent. Typical investment size: $50k after fees.

There are plenty of investors in Hong Kong, and these are some of the biggest:

  • Betatron — founded by Hong Kong’s most prominent venture firms to support the startup ecosystem in the region, with a focus on early-stage companies in Asia.

The alumni of Hong Kong University of Science and Technology have founded 114 companies, raising over $368M in funding from 165 investors. Hong Kong is home to many promising startups, including cellular fish and seafood firm Avant Meats, Geb Impact Technology, which cultivates microalgae for use in many lifestyle products such as nutraceuticals, skincare and food supplements, and HakkoBako, focused on smart fermentation. And if that’s not enough, here are 50 more.

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Israel is one of the front runners in the world of cell-based food tech; its homegrown startup SuperMeat opened its own restaurant attached to its production facility in November for diners to try cell-based chicken for the first time.

Israel has invested heavily into education, with almost half of the country’s workforce holding a tertiary education level. Also, every citizen must serve in its military for at least two years, and it trains soldiers to become experts in specific fields like engineering and technology, depending on their strengths. As a result, the country boasts more engineers per capita than for example the US or Germany.

There are many innovation incubators and accelerators in the region:

  • The Bridge by Coca Cola — a unique commercialization program which acts as a bridge between the entrepreneurial community and major global markets, for early or growth stage startups which offer software solutions that are ready to commercialize and that fit one of nine core themes: Customer Experience, Supply Chain, Last Mile Delivery, Home Delivery, Future of Work, Human Resources, Realty Excellence, Health & Wellness and IT Infrastructure. Typical investment size: variable.

There are also a few foodtech focused investors to check out, including:

  • The Kitchen Foodtech Hub — focused on seed stage companies within the disruptive foodtech sector, such as Zero Egg, which raised $5M in November 2020 to crack the US market with its plant-based egg alternative.

Local startups include Tastewise, a data, analytics and insights platform for restaurants, food brands and hospitality; Soos Technology, which has developed an incubation system that affect the sex development process in poultry embryo and turn genetic males into functional female chicks, reducing wastage in egg production; or cell-based food tech Aleph Farms, whose cultivated meat was declared ‘delicious and guilt-free’ by Israeli Prime Minister Benjamin Netanyahu, who then pledged government support for cell-based meat.

Photo by Shai Pal on Unsplash

Berlin has a fast-growing foodtech startup scene and has spawned some large foodtech startups, including meal kit delivery service HelloFresh, food delivery giant Delivery Hero, vertical farming business Infarm, data-driven logtech solutions-based freight forwarder Forto and progressive environmental agtech PEAT.

It’s much more affordable to live in than London, San Francisco or New York, so businesses can attract talent more affordably than if they had their HQ in more expensive cities. Plus, it’s home to ESMT Berlin, one of the highest ranked business schools in Europe, and Technical University Berlin, which runs a Centre for Entrepreneurship and offers a Berlin Startups Stipendium.

With numerous incubators, accelerators and coworking spaces, the city provides optimal conditions for entrepreneurs from around the world:

  • Berlin Startup Unit — founded by the State of Berlin in 2015, its core objectives are supporting the startup ecosystem and strengthening public services for startups, and bringing transparency to the startup scene, to make life easier for startups and help them to be successful. Typical investment size: N/A.

Plus, there are food-centric investors in the city helping to grow startups:

  • Atlantic Food Labs — early-stage investor for startups with solutions to feed ten billion people by 2050 in a sustainable and healthy way, covering the entire value chain: agtech, alternative protein sources, water supply, food security, decentralized food production, vertical farming, personalised nutrition, food waste and carbon reduction.
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The Netherlands may be small, but it is mighty, and in fact is the second most densely populated country in the EU, so no surprise that it’s a hotbed of talent and resource. Its universities have big budgets and decent support programs for entrepreneurs: University of Amsterdam has an excellent reputation in both fundamental and socially relevant research, and previous alumni include co-founders of startups like Virtuagym and Lepaya; Delft University of Technology offers a Master Annotation Entrepreneurship program, tech-incubator YES!Delft and the Delft Center for Entrepreneurship; Erasmus University Rotterdam offers exchange programmes and internships with other highly-ranked business schools in Europe; The University of Groningen ranks among the top 100 universities in the world and runs its own Centre for Entrepreneurship.

Alongside these, Wageningen University & Research is the world’s number one agtech university and has been voted the top university in the Netherlands for fifteen consecutive years. The university’s expertise in food and the environment puts it in high demand to produce research for the Dutch government, businesses and nonprofits, and its facilities are commissioned by these groups to explore new solutions for healthy living. Their projects have ranged from seeking innovation in sustainable energy to finding ways of making plastic from seaweed.

In addition, there are several programs dedicated to the support, mentorship and investment startups:

  • Blue Ocean Xlerator — BOX provides a support network for the admin side of a startup: writing a business plan, bookkeeping, funding, housing, negotiating contracts and monitoring networks, which all take a lot of time when you really need to be focusing on tech and creating a foothold in the market. At BOX you work alongside 35 colleagues and fellow entrepreneurs with relevant knowledge and experience and the same drive, and need to bring a winning mindset. You can apply any time. Typical grant size: N/A.

Plus, a bunch of investors waiting to fund great startups in the food and ag space:

  • Anterra Capital — a venture capital firm which invests in companies operating in the food and agricultural sectors, particularly within sustainable solutions and environment-first concepts.

In terms of successful startups, packaging-free online supermarket startup Pieter Pot raised €2.7M in seed funding in November 2020. Since its inception in 2018, the startup has already saved over 120,000 pieces of packaging waste, and its sustainability and convenience-focused approach is resonating with consumers. Cell-based meat company Mosa Meat raised €16.3M in December 2020, bringing its total series B funding to €63M, to scale up its technology and continue development of its cultivated hamburger. Plus, Greencovery‘s systems help food manufacturers recover valuable compounds from their side streams, instead of writing them off as ‘waste’.

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The UK’s capital, while suffering from dreary, drizzly weather the majority of the year, benefits from its easy connectivity to other global cities. It’s also one of the few ecosystems with a startup visa programme and, in terms of funding, the average seed round in London stands at $650k, compared with the global average of $494k. Alongside this, London has world-leading universities such as Imperial College London, consistently rated in the top 10 universities in the world, and London Business School, which provides a top-ranked full-time MBA.

Plus, there are options for acceleration in the English capital:

  • EIT Climate-KIC — UK: invests in clean technology, agriculture and green energy and takes an ‘open innovation’ approach to mentorship. It works on an innovation model of knowledge exchange and technology transfer it calls the ‘knowledge helix’. Typical investment size: €20k.

There is no shortage of investors in the capital, including:

  • Agronomics — focused on opportunities within the nascent industry of modern foods, which are environmentally friendly alternatives to the traditional production of meat and plant-based sources of nutrition.

There have been tonnes of brilliant startups grown in London, including digital-only banking platform Monzo, international money transfer service TransferWise, online food delivery platform Deliveroo, which recently secured $180M in funding and is preparing for its IPO, and meal kit manufacturer and retailer Gousto. To note, though, that it’s not yet clear how the effects of Brexit will pan out, so proceed with caution before jumping the gun.

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