Singaporean foodtech startup Hoow Foods has raised an undisclosed amount of funding in a “strategic” round led by Nanyang Realty, a family office based in the city-state. South Korean VC firms Sunbo Angel Partners and Lighthouse Combined Investment also joined the round.
Co-founder and CEO Ow Yau Png told AFN in an interview that the investment is a “seven-figure” amount.
Hoow Foods reformulates unhealthy foods into healthier versions in an effort to combat diseases such as diabetes, hypertension, and hypercholesterolemia. Its pipeline includes ingredients such as a staple foods moderator that alters the glycemic index of staple foods, and finished food products such as an ice cream that’s 70% lower in calories, fat and sugar.
The food reformulation startup will use the funding to hire more scientists, build out its tech infrastructure, and expand its R&D capabilities throughout the region. Ow said that Hoow Foods plans to open an office in South Korea with the help of its new investors from the country, while lead investor Nanyang Realty will assist its expansion across Southeast Asia.
“[Nanyang is] in hospitality, maritime, and real estate. They own a string of hotels, and they own a few F&B chains as well,” Ow said. “They want to differentiate their [hospitality] brands through us. We saw that as a synergy.”
It won’t be the first time that Hoow Foods has partnered with major F&B players in its short life. Launched in January 2018, the startup also works with Killiney Group, the company behind the iconic Singaporean cafe chain, Killiney Kopitiam.
This year, Killiney – which led Hoow Foods’ $1.19 million seed round last September – has unveiled a range of healthier tea and coffee products co-developed with the startup. The products – reformulated using Hoow Foods’ proprietary tech platform – will be available to order in the group’s cafes and restaurants, as well as sold online and in supermarkets for home consumption.
Prevention better than cure
Hoow Foods’ mission is to reformulate familiar foods into healthier versions of themselves, without compromising on factors like taste and texture.
Its approach to achieving this is rooted in its co-founders’ past careers in the pharmaceutical and healthcare industry. Ow himself used to work for medical device and pharma companies before leaving to launch Hoow Foods.
“Its a synergy of food science, pharma science, and data science,” he said, explaining the concept behind the startup. “What drove us to the food business at first was, being from the healthcare industry, we wanted to help solve the problems of metabolic diseases such as diabetes and obesity. I think [the impact of metabolic disease] is still very understated, with a lot of issues and knock on effects as well. It’s a big killer.”
From Ow’s perspective, he hasn’t really left the healthcare sector at all. He sees Hoow Foods as complementary to the therapeutics-focused healthcare industry he used to work in. The difference is that the startup’s working from the assumption that prevention is better than the cure.
“We’re trying to solve that gap – the preventive side of food, rather than actionable stuff on the therapeutic side – which is drugs,” he said.
“There’s a huge correlation between food and therapies. If we can prevent [these diseases] by changing diets, changing lifestyles, we will solve a big part of the health side. Food is really underrated when it comes to control of diseases – it’s always a very reactive situation whereby we introduce drugs and therapies when you don’t take care of your body. We aim to buck that trend.”
A question of taste
The thing with ‘healthy’ foods is that, while they may be better for us, all too often they simply aren’t as appealing as less-healthy options. It often feels like flavor, texture, and affordability have to be sacrificed in order to buy food products that are supposed to be healthier for us. And that’s precisely the problem that Hoow Foods has set out to solve.
According to Ow: “The idea is that you can have your cake, and eat it.”
The startup is doing just that with brownies and cookies as well as other baked items, wheat-based staples, cooking sauces, drinks, and desserts. In late 2018 it launched its own line of reformulated ice cream – called Callery’s (“pun intended,” Ow confirms) – which it claims has 77% fewer calories, 80% less sugar, and 77% less total fat than the average premium-brand ice cream.
To achieve this, the team is again leaning on its past experience in the pharma industry.
“We borrow best practices from pharma development and food science, as well as data science, all mashed into one to create a platform that can predict formulations [and allows us to] prototype in an unprecedented, very short amount of time and very accurate way,” Ow said.
“Essentially we are breaking down reference products into their building blocks, analyzing their buildup, analyzing all their physical properties. And not just weight, color, mass – we are looking at viscosity, crystallinity, hydrogen bonding – breaking down ingredients into the smallest building blocks possible.”
Perfecting the system
While that may sound dazzling, Ow readily admits that this is par for the course in drug development. So why has it taken so long for this method to catch on in food manufacturing?
One reason is the difficulty of attracting the right talent. “Truth be told, pharma is a much more lucrative industry in terms of a career,” Ow said. “If you are trained as a doctor or scientist, it’s still very rare for you to want to go into food.”
“Secondly, it’s not easy to be well-versed in clinical science, and then move into the biochemical field of food science. They’re different, though related, disciplines” and the time and effort required to make the crossover probably doesn’t justify losing the pharmaceutical industry salary for most people, he added.
Lack of talent aside, Ow believes that Hoow Foods ‘medical’ approach to food reformulation will prove attractive to larger food manufacturers and retailers looking to introduce healthier products – but with lower spending than they currently face.
“The traditional way [to develop reformulated products] of most packaged food companies is trial and error – which will potentially incur a lot of costs and with a low chance of success,” he suggested. “It can take many, many iterations, which means man hours and resources. Our solutions could potentially lower the costs of human capital and capital expenditure.”
Substituting just one or two ingredients can alter a food product completely, since it changes its physical and chemical properties. That’s why healthier formulations that are still commercially viable can be extremely difficult to achieve without substantially changing the taste and texture of the original.
“For example, you can’t just swap sugar for sweetener, one for one – the viscosity may be different, melting point may be different,” Ow said.
The startup’s long-term objective is to fully automate its food development platform using artificial intelligence, so that it can be licensed out to large food manufacturers in a software-as-a-service model. But Ow said it will likely be “a few years to perfect the system.”
“That doesn’t mean we aren’t in business,” he hastens to add. For now, Hoow Foods will continue to offer consulting services to food companies, just as it does with its first client, Killiney Group. “We basically become [the client’s] outsourced R&D unit. We can cut licensing deals, and also charge one-time fees for our services.”
That’s what you might call having your cake and eating it.