The Future Food Asia Award (FFAA), Asia’s first agrifood tech startup up competition, will be presented in Singapore for the second year on May 23.
String Bio, from Bangalore India, took home $100k and top honors at the competition in 2017. The startup converts methane, a waste gas responsible for much of livestock production’s greenhouse gas emissions, into proteins that can be used in animal feed,
Agrifood tech investment to date in Asia has been a story of extremes, with most countries posting modest investment totals apart from the global contender across all categories of venture-backed investment, China. Part of Future Food Asia founder Isabelle Decitre’s mission is to stoke innovation outside of China, and also amplify the investment that is happening, but for various reasons, doesn’t make headlines.
Applications for the 2018 competition are open until April 2 for startups with at least $100k in seed money, that plan to raise at least $2 million in the next 18 months. The startups must be looking to make a positive impact on the food ecosystem with innovative and sustainable technology.
We caught up with Decitre to talk about some of the market forces at work in Asia, which countries are due for an upswing in investment activity, and what’s coming up at Future Food Asia 2018.
AgFunder Co-Investment Fund III is now open for investment. Closing June 15, Spots are limited.
What would you say, based on your personal experience with the competition, are the early markers that the Asian AgTech startup ecosystem is maturing?
So first of all, the big discovery of the first edition of Future Food Asia Award is that innovation is everywhere. I would struggle to narrow down Asian innovation to a couple of countries. It’s literally everywhere.
The second point is that innovation is maturing because we see funding happening. It’s a little misleading by American standards, because the information is not very loud. A lot of things are just done in the home countries of the startups. The point of maturation would be, I would say, more substantial when you see more Series A funding done outside the home country within Asia. And we have the early signals of this.
I think it’s definitely a good marker of maturity because the common wisdom says you are raising seed money amongst family and friends, or people who know you. For Series A, it might be that you need to venture outside your home country. I would say that when you see more Series A rounds happening in Asia and outside of the home country of the startups, I would take it as a very substantial indicator that we are almost there.
Are you seeing startups mostly developing solutions for the types of agriculture that take place in their own country, or is there more of a global outlook?
We see a bit of both. If you go by the numbers, I would definitely say we are seeing more innovations which are contingent to their home country’s context. And you can tell, as far as attracting investors, the game is about stretching the potential of the company and feeling when the moment is right for them to go abroad because it might not be good for them to go overseas too early in the process. But it’s good to know that there is potential to do so in due course.
In several instances, and Singapore is a very good case in point, you would see [agrifood] innovations which are definitely piggybacking on some kind of expertise, like artificial intelligence, but definitely applicable to situations which are outside Singapore. I have a very vibrant example, which is one of the winners of the prizes last year.
Smart AHC is applying IoT to pig farming. They are detecting the peak of ovulation of the breeding sow to improve the efficiency of artificial insemination. So the know-how at the very beginning is IoT and AI, or the analytics applied to the data you get out of the sensors, and then the application is in pig farming, which is very much a Chinese and Vietnamese issue.
Last year you said that Singapore is poised to be a leader in the region because of the financial resources that are available there. Is that still the case?
I still believe there is an undisputed position of strength of Singapore when it comes to making transactions easy, and I believe it’s definitely a country that many other countries, at least in Southeast Asia, should be looking to in the future. I see many very young entrepreneurs hoping to get American money, and not realizing that it comes with some strings attached, like relocating their business in the US. And in many instances, it just doesn’t make sense because of the very nature of the innovation, or from a cost-based perspective.
Do you think that these Chinese mega-rounds are going to make it into agriculture more in the future, as they have done on the food e-commerce side?
Oh yes. Absolutely. In Asia, you don’t have this notion of vertical integration whereby all your businesses need to be very cohesive. You have the notion of a conglomerate which is more accepted, and nobody will tell you your market value is lower because your activities are too diverse.
We see these coming from all over the place, whether you’re talking about input companies, processing companies, or food companies. I would say we are, by the nature of what we’re doing, less interested in pure marketing innovations. That’s not what we’re looking for. These are probably the deals you see the most easily at the moment, but because we are looking at something where there is a technology disruption or a technology innovation, what we see so far is definitely on the par with what we see in some other countries in the Western world.
We know that there is this butterfly effect in China. Whatever works can be scaled up tremendously and very quickly. You cannot always tell what would work, what may not work, and why, but you can just observe from the past that there have been scale-up success stories that are pretty impressive.
We see them today in the marketing space, but very soon I’m quite sure we’ll see them in the technology space, which also comes with some apprehension from the Asian entrepreneurs as soon as they start to look into China as a potential extension.
The Chinese market is enough to keep them busy for many years, but there is always, in the back of their mind, the threat that if their innovation is not own-able enough, it can be stripped off and copied, replicated and scaled-up.
What’s new with the Future Food Asia Award this year?
For the new edition, it’s all about continuing and amplifying what has worked well. We have created a few new categories in the awards, for example, in the domain pertaining to the nutritional value of food. We have singled out the notion of smart packaging — whatever helps in extending the shelf-life of products or better keeps the nutrients in the food.
We have singled out smart manufacturing practices as a category and also another category, which is very dear to me: innovations related to food fortification. Whether we will have a very densely-populated category of applicants I cannot yet tell, but by creating this category we sent a signal that there could be very interesting things to be done in this domain on a for-profit basis.
Bottom of the pyramid food solutions are often perceived as the monopoly of NGOs and the like, and we believe, as good as NGOs can be in this domain, it would be better to find business models not relying on donations.
The last innovation, which is in a very, very different domain, more in the upstream part of the value chain, is agri-financing, which was a little bit on the boundary of what we were looking at last time.