Investing in the Future of Food: Unique technology can offer startups protection from competitors
“The companies that we invest in are all tech-based. It can be different types of technology from material science to biotech from software and algorithms to digital technologies and applications. But it has to have a strong technological backbone,” said Amir Zaidman, VP business development at The Kitchen – a food-tech Hub by Strauss.
He explained that the technological component is important because it creates a barrier for entry for the competition and makes it more difficult for copycats and me-too products to come to market and steal share.
He also noted there is significant whitespace within food-tech and that startups, which tend to be more agile than larger established companies, are well suited to bring much-needed innovation.
A diverse portfolio that represents the broad potential of food-tech
With that in mind, he said, The Kitchen is zeroing in on a few promising areas of development within the food-tech segment.
The first area is alternative proteins and plant-based foods, he said, noting The Kitchen has invested in several companies in this space: Aleph Farms “a leading company in cell-based meat developing the first 3D structured meat chunks,” Rilbite, which is a plant-based replica of minced-meat and is completely clean label, and FlyingSpark, which is developing protein powder and oil from fruit fly larva.
“We are also very interested in the area of reduction of sugar,” and have invested in two companies in that space, Zaidman said.
Amai Proteins creates “designer proteins” that replace sugar. The proteins come from the equatorial belt and with the help of Agile Integrative Computational Protein Design and fermentation, the company is making the proteins fit for mass consumption.
Better Juice has developed a technology that converts and reduces the natural sugars in fruit juice so that consumers can enjoy the nutritious benefits of the beverage with less sugar.
Food safety and traceability are two other “big issues” on which The Kitchen is focusing, Zaidman said, pointing to two companies in its portfolio that work on this area: Bactusense and BioFence.
The Kitchen is also interested in advanced packaging, such as biodegradable or biocompostable packages, and the area of food waste reduction, but Zaidman says it has yet to make investments in that space.
Finally, Zaidman said, The Kitchen is “working to get more into retail technologies for groceries, mainly optimization of last mile delivery and making the grocery store smarter,” such as with cashierless stores.
What The Kitchen offers startups
Unlike other incubators or accelerators that accept classes of entrepreneurs in different waves, The Kitchen is more akin to a venture capital group in that it screens potential partners on a rolling basis. Once it finds a match, it invests roughly $600,000 in seed funding and provides support in all areas of launching a startup in exchange for equity.
In addition to the funds, some of which comes from the Israel Innovation Authority, The Kitchen offers startups access to knowledge from the Strauss Group, which is one of Israel’s largest food companies.
Through this approach, Zaidman said The Kitchen hopes to align with companies that not only have strong business potential but that also will ‘do good’ for the world more broadly.
“Our mission statement is better industry, better food, better world. If you look at our portfolio you will see all of our investments are impact-related investments – so double bottom line doing well by doing good,” he said. “I know those are all high words, but this is what gets us out of bed in the morning – trying to help the companies that are helping the food industry and through the food industry the entire planet.”
