Food waste technology startup Apeel Sciences has raised $250 million in funding taking its valuation to over a billion dollars. Singapore state fund GIC led the round, which took the Californian startup to unicorn status. Existing investors Viking Global Investors, Upfront Ventures, Tao Capital Partners, and Rock Creek Group also joined the round alongside Santa Barbara locals Oprah Winfrey and Katy Perry. The round follows a $70 million Series C in 2018 and brings the startup’s total funding to date to $360 million.
“Food waste is an invisible tax imposed on everyone that participates in the food system,” James Rogers, founder and CEO of Apeel, said in a statement about the funding. “Eliminating global food waste can free up to $2.6 trillion annually, allowing us to make the food ecosystem better for growers, distributors, retailers, consumers, and our planet. Together, we’re putting time back on the industry’s side to help deal with the food waste crisis and the challenges it poses to food businesses.”
Founded in 2012 with a grant from the Bill & Melinda Gates Foundation, the Santa Barbara-based startup uses a plant-derived solution to add an extra “peel” to the surface of fruits and vegetables. To develop this coating, the company processes agricultural byproducts and waste like orange peels. The coating is 100% edible and slows water loss and oxidation, two factors that lead to spoilage. It essentially creates an optimal microclimate inside every piece of produce thereby extending shelf life and transportability.
Apeel reports that it is on track to save 20 million pieces of fruit from winding up in the waste bin at retail stores. Considering that the US leads food waste figures at a staggering 40 million tons of food each year, which costs about $161 billion. Tackling produce waste is a particularly appealing problem considering that some reports suggest that half of all produce winds up being tossed out.
“I hate to see food wasted when there are so many people in the world who are going without,” said Winfrey in a press release announcing the funding. “Apeel can extend the life of fresh produce, which is critical to our food supply and our planet too.”
The company is seeing some commercial traction for its product. It claims that on average US retailers using Apeel have seen a 50% reduction in shrink and a five to 10% growth in dollar sales. As Covid-19 has created numerous issues throughout the supply chain, the startup is emphasizing the even greater need to safeguard precious resources in the food supply. By providing produce growers and suppliers with extra leeway during this uncertain time, an increase in food waste can be mitigated, it argues.
Food waste continues to be a popular area of interest for investors. A few startups are looking at science-backed ways to slow down decay for fruits and vegetables. Stix Fresh has developed a sticker coated with sodium chloride and beeswax to slow the fruit ripening process by cutting ethylene, the hormone responsible for ripening fruit.
Other food waste efforts are looking at connecting new dots in the supply chain. Earlier this month, San Francisco-based Imperfect Foods closed a $72 million Series C led by Insight Partners. The startup aims to connect producer growers with produce buyers to find homes for misshapen or lower quality produce items that would otherwise be thrown away. Full Harvest is also tackling B2B food waste. It recently added former USDA Secretary and UNICEF director Ann Veneman to its board.