Accelerators speed development of promising food start-ups
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At Food-X, a New York City-based food industry accelerator, the only culinary equipment to be seen is the sink, coffee maker and refrigerator used for the day’s drinks and snacks. But while it might not have a test kitchen, the support Food-X offers to agri-food entrepreneurs is different to that found at accelerators for biotech or software start-ups.
Food-X is part of a fast growing cohort of accelerators launching to support the entrepreneurs now hoping to disrupt the global agri-food industry. The nature of agriculture and food production means they need specific types of support. Like most accelerators Food-X offers start-up capital, mentoring, access to food companies, investors and press, shared space and alumni networks, but the programme is tailored to the sector.
“On the food product side, it’s about distribution, branding, co-packing, production and supply chain,” says Peter Bodenheimer, Food-X programme director. He adds that relationships with institutions such as the Rutgers Food Innovation Center mean it can offer access to research and development facilities and test kitchens if needed.
“In tech, it’s much more about capital and building a product right than it is about the supply chain,” he says. “For food companies, it’s about building the process up to allow for scale.”
Start-up capital is, nevertheless, an essential ingredient. “Initially funding is a major concern,” says Mark Lyons, chief executive and president of Alltech, a US animal feed and crop nutrition company that runs the Pearse Lyons Accelerator for agri-tech start-ups.
He says founders are also looking for opportunities to learn what customers want, expertise to develop business plans and for coaching on delivering a pitch and managing a business.
The start-ups in accelerator programmes are diverse. At Food-X, the 2018 cohort ranges from Saana, a customised meal delivery service for people suffering from serious illnesses such as cancer, to Planetarians, an ingredient company creating an affordable alternative protein from the matter left after oil is extracted from sunflower seeds.
The 10 start-ups selected to join the Pearse Lyons accelerator this year include the UK’s Breedr, an app that enables livestock farmers to share data to increase yields, quality and profits, and US-based business Biome Makers, whose technology measures crop health and biodiversity using DNA and intelligent computing.
Accelerators offer a range of investment models, support services, physical spaces and timeframes. At Food-X, which invests in its start-ups, the 14-week programme length is important.
“If it’s too long, you remove some of the pressure,” says Mr Bodenheimer. “Part of our goal is to create a sense of urgency and help people move forward more quickly, start to test things and get feedback — and hopefully they’ll come out of the programme with momentum they can continue to build on.”
Early stage companies are not the only focus for accelerators. The Terra accelerator in San Francisco is something of a matchmaker. It brings together large corporations that are looking for innovations to work with “scale-ups” on three-month pilots.
“These are start-ups that have raised a certain level of funding, already have product market fit and traction . . . and are able to scale,” says programme director Shaina Silva. Terra’s co-founders are Rabobank, a Dutch lender which specialises in agribusiness, and RocketSpace, which provides workspace for tech entrepreneurs, start-ups and corporate professionals.
For large companies that find it hard to innovate, Terra is a way of outsourcing research and development. “Where they would have spent billions on research and development on something that might have failed, you spend a few hundred thousand dollars and you might have a solution that works in a few short months,” says Ms Silva.
Another approach to speeding up innovation is to create a competition. This is the model for FoodShot Global, a non-profit consortium of venture funds, banks, corporations, universities and foundations. The annual award was launched last year alongside an investment platform offering entrepreneurs $10m a year in equity and up to $20m in debt funding. The award of more than $500,000 will go to entrepreneurs, researchers and others whose ideas FoodShot believes could accelerate the transformation of the food system.
The inaugural prize focuses on innovations that address soil deterioration. “We started with soil because we felt that all the changes we’re looking to make will need soil health to be fixed first,” says Victor Friedberg, FoodShot Global’s chairman and founder.
While the models vary, the impetus to create new forms of support for entrepreneurs is rooted in a drive toward sustainability. “We have a growing population and a lot of issues in food and agriculture that are affecting our planet,” says Ms Silva. “We have to find ways of putting innovation in the market that will not take decades.”
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