Welcome to the latest edition of AgFunderNews’ weekly news blitz.
Last weekend, the second annual rethink Food conference took place in Napa, California, sponsored by the Culinary Institute of America and the MIT Media Lab. This year’s event focused on food tech’s role in meeting the growing demand for food. According to recode.net, a hot topic of conversation was the pile of venture capital funding poised for investment in the burgeoning food tech sector. According to Physic Ventures managing partner Will Rosenzweig, who spoke at the event, the FDA may be “ill-suited to deal with the level and speed of the change that’s coming.”
In other food tech news, food information startup Innit, which manages and connects food information, launched this week at the Smart Kitchen Summit in Seattle with an initial funding of over $25 million from founders and strategic investors. Innit unlocks and listens to the information within food through science, technology, and culinary expertise. Through its cloud-based platform, the company then connects food to appliances, devices and users in order to enhance how we select, prepare and cook food.
A burger battle is brewing in the golden state. California fast food outfit In-N-Out is suing food delivery startup DoorDash for delivering its burgers. According to the restaurant, DoorDash is using the company’s trademarks without permission in offering burger deliveries to online consumers. In response to the lawsuit, DoorDash told CNBC that the company “uses its innovative logistics technology to deliver the very best food and products in neighborhoods across the country.”
At a time when the food e-commerce bubble may be getting ready to burst, the lawsuit brings even more focus to the sector. In a recent post for YourStory, Petoo.in co-founder, and IIT Kharagpur alumnus Kumar Setu argues that the food e-commerce bubble is in good shape and that “this billion dollar space has not even taken off till now.” According to Setu, the term “food tech” has been used broadly, encompassing companies that merely advertise restaurant’s menu offerings online. These companies may more aptly be described as delivery or logistics companies, says Setu.
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With online restaurant discovery platform Zomato poised to bring in about $30 million in revenue this financial year—almost double what it did a year ago—Setu’s point about the broad characterization of food tech and e-commerce may be right on the money.
Despite the kerfuffle over the internet of food, companies are still closing sizeable funding rounds and planning expansion despite the recent foldings and downsizings of competitors like TinyOwl, Dazo, and SpoonJoy.
Indian-specialty quick service restaurant chain Hello Curry is eyeing national expansion, hoping to more than triple its outlets to 100 by December of next year. Ready-to-cook food startup Chefs Basket has also raised $6 million in a Series A funding from SAIF partners and India Value Fund Advisor’s partner Haresh Chawla. Grocery e-tailer Satvacart added another $1.8 million to its second round of angel funding, with plans to use the capital for tech augmentation and team expansion.
News of Rocket Internet’s German food-delivery startup’s impending IPO came as a welcome test case for many folks in the food e-commerce sector, but HelloFresh has hit the breaks on going public, citing market volatility as the underlying reason and eyeing a stock listing for early 2016.
Although food tech has taken the Indian VC scene by storm, other sectors in the region are still nabbing funding rounds. India’s largest micro-irrigation firm Jain Irrigation Systems has raised $120 million by issuing shares to Mandala Capital, a private equity firm focused on the sector. Mandala has also backed Gati Kausar, Godavari Biorefineries, and Sustainable Agro-Commercial Finance.
Elsewhere, cannabis industry consultancy Canna Group has created a private equity fund called Sugar Leaf Capital Fund I to invest in emerging growth companies in the sector. The fund will be based in California and Chicago, with investments typically coming in the form of equity or a number of debt or debt-like investments.
Earlier this week, AgFunderNews reported on Syngenta’s recent partnership with DSM to develop ag biological input products. This week, the Wall Street Journal reports that DuPont Pioneer, one of the biggest names in agribusiness is considering some strategic partnerships. A plot involving mergers of this scale with players this big would probably be one of the biggest shake-ups to hit agriculture in the last 10 years as three years of low crop prices are squeezing the industry’s crop profit margins. Sources indicate that Syngenta is in discussions with DuPont, while DuPont is in talks with Dow Chemical for another deal.
Other industry news highlights for the week include:
- Real estate management company Farmland Partners has scooped up 22,300 acres of Illinois farmland for $197 million. The company intends to negotiate new lease agreements with tenants currently farming the newly acquired properties.
- University of Louisiana’s Aviation Program is making headlines for its cutting-edge drone research and hands-on field operations designed to improve UAS use in agriculture applications. In 2013, ULM’s Aviation Program introduced the state’s first concentration in UAS technology and has since expanded to include a Precision Agriculture and Research Center (PARC). ULM is hoping to enhance public education on drone technology, which may come in handy as the FAA gets ready to finalize its rule on Small UAS usage for commercial industries.
- While the decline in bee populations has been making quite a buzz in global news, a group of researchers recently took a look back at the pollinator’s history to find out when we started colonizing the insect. According to its report, humans’ relationship with honeybees may date back to prehistoric farmers roughly 9,000 years ago. Based on examinations of Neolithic pottery shards, our Stone Age ancestors may have used beeswax in cooking and incorporated honey in their diets, the study reports. If they’re right, the introduction of bees into our diets and lifestyle roughly coincides with the dawn of agriculture.
In this week’s Capital Hill report, the FDA has called for public comments on the use of the term “natural” for food labeling purposes. The debate over what “natural” means—or doesn’t mean—has been the focus of countless lawsuits filed across the country in which consumers claim that a food company’s use of the term was ultimately misleading. Although courts have called upon the federal agency for guidance in interpreting the word, the FDA has consistently refrained from chiming in on the subject.
What’s made the agency break its longstanding silence? The FDA recently received three Citizen Petitions asking the agency to define the term and a fourth calling for the agency to prohibit the term “natural” from gracing food labels entirely. In a recent statement announcing the open comment period, the agency said: “Because of the changing landscape of food ingredients and production, and in direct response to consumers who have requested that the FDA explore the use of the term “natural,” the agency is asking the public to provide information and comments on the use of this term in the labeling of human food products.”
The agency was careful to note that it has not initiated any rule-making procedures to define the term and that the call for comments is part of its longstanding policy concerning the use of the term “natural” in food labeling. You can submit your comment starting today by heading over to FDA’s website and entering FDA-2014-N-1207 in the search box.
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