I am back to writing some posts about startups, specifically what is going on between the Food & Beverage sector and Venture Capital. Fundings are a critical step for all startups but the last year, and this one too, aren’t so favorable for investments in new markets.
Fundings for food and beverage are down
According to PitchBook data, food and beverage startups raised $7.8 billion in the first three quarters of 2022. Conditions certainly weren't the best, and probably won't be for many months. By the end of 2021, cracks began to appear in the big tech companies that would drag the entire industry down with them. Big Tech began to lay off workers after years of mass hiring, and venture capitalists began to use their investments more wisely.
But despite the tough market, many investors are still looking for innovative companies in the beverage sector, and VC see many opportunities in this market.
Leading US investors in the food and beverage sector include AF Ventures, Barrel Ventures and AgFunder. This one, a San Francisco-based firm founded and run entirely by women, has funded Fable Food, an Australian alternative food company. In these days people talk about synthetic meat with a certain Italian distaste, but Fable Food sells mushroom-based preparations both for making sauces and in the form of dishes that resemble a steak. Founded in 2019, they've raised $14.8 million in funding so far. My view is that we need to promote and hold on to our Italian recipes and foods, but without looking at alternative foods with detached disdain. The risk is to be excluded from a market that in 5 years could be reserved for the USA, Israel and Australia.
Logistics, Delivery, and New Food Technologies
The Food and Beverage market and Venture Capital peaked in 2021, like so many other sectors. The 2022 that started with Russia's invasion of Ukraine has held back all investments a bit, but the food market is definitely still the interesting part.
Another Food sector company funded by AGFunder is Future Fields, which is involved in extracting proteins from insects through their biotech plants. This is also a sensitive topic in Italy, but the same point I made earlier applies: avoiding investing in research risks seeing us cut off from the future market. So far, in the different rounds, it has obtained almost $19 million, founded in 2018 and based in Canada.
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The record for the most funding one belongs to Goldbelly, based in New York and founded in 2012, which got $100 million in funding in May 2021 from a California private equity firm. So far it has raised $133.1 million in a Series C round. It is an online marketplace where specialty foods made from local artisanal products can be found. The company offers logistics services by providing boxes and packages for shipping orders, and an integrated platform dedicated to restaurants. In this way, they offer the tools for ordering and home delivery even for small food shops that would otherwise have difficulty doing delivery.
Exchange platforms for fine wines
In the beverage market, New York-based Flaviar has raised $13.9 million. It is a dedicated spirits club that allows members to try a range of different spirits through their subscription service
In addition to Goldbelly and Flaviar, other financial startups in the beverage sector include RightRice and Sophie's Kitchen. RightRice, based in San Francisco, has raised $5.5 million. RightRice has developed an alternative to rice created entirely from vegetables. Sophie's Kitchen, based in Dover, Delaware, raised $5.6 million. They produce plant-based seafood and include non-GMO, gluten-free vegan seafood alternatives.
In the fine wines Vinovest, a California-based company that exchanges fine wines among collectors, is growing rapidly. They have developed a search and exchange platform and also help with purchasing and provide bottle storage service. You can view the bottles either through a webcam placed on the shelf or go in person at any time. They also organize exhibitions for collectors who want to present their collections to buyers and investors.
The food market is undoubtedly the evolving sector, both in terms of distribution and logistics systems and new production technologies. Plant foods are becoming increasingly attractive, both in terms of environmental sustainability and food access. The building blocks for the next food revolution are probably being laid in these years.