Editor’s note: Caroline Macdonald is a writer specialized in food, nutrition, and new technologies for sustainable food systems. This article was commissioned by StartLife to mark its 10-year anniversary. It does not necessarily represent the views of AFN.
Rapid innovation in the food and agtech sector means startups can no longer afford to think narrowly about finding a market niche – or capital. Early on, they also have to be laser-focused on their long-term plan for entering and competing in a continually growing market. That includes building networks, partnerships, and corporate allies.
“Nearly every startup in the agrifood sector needs to partner with established firms to validate and scale its business,” says Jan Meiling, managing director of Netherlands-based agrifood accelerator StartLife.
That’s an evolution from how startups, and the accelerators and mentorship programs supporting them, used to think. “The first generation of accelerators was about how to take 12 weeks to be able to bluff your way in,” Meiling admits. “The next generation was about how to be investor-ready, and the latest is about all of this – but especially how to be corporate-ready.”
StartLife would know. The program was one of the first to specialize in agrifood when it launched a decade ago. Then, the Wageningen University-connected incubator was primarily focused on helping promising research projects transition out of academia. It has since expanded its reach to agrifood startups across the Netherlands, and more recently, to early-stage global ventures.
“Providing access to knowledge was our starting point,” Meiling says. As the space grew, StartLife focused more on helping startups get an early foothold in the market – and later, with VC firms. “We saw in Europe and in the Netherlands that many venture capital funds were choosing to move into agrifoodtech,” he adds.
European VC funding in the sector grew 70% between 2018 and 2019, according to AgFunder research. Generalist investors are also now increasing their activity in the sector, particularly in light of the Covid-19 pandemic. [Disclosure: AgFunder is the parent company of AFN.]
Sustainable is the new normal
Now, as StartLife focuses more on corporate partnerships, one of the key trends the program has noticed is industry’s growing demand for sustainable solutions.
“It really has become mainstream, and not only among young companies,” Meiling said. “More and more corporates are implementing the UN Sustainable Development Goals in their strategic plans and business.”
Yelloway, a joint venture involving a StartLife startup called MusaRadix, has teamed up with global banana brand Chiquita and plant-breeding firm KeyGene with the aim of improving disease resistance in bananas – the most wasted crop worldwide.
Sustainability is an increasing focus for investors too. The new EU investment program, InvestEU, has built sustainability metrics into its funding objectives, which is meant to incentivize investment managers to improve the sustainability performance of their portfolio companies.
“This is really top-down, organized by the European Commission,” said Meiling. “At the same time, it is clear that the industry is confronted with a strong bottom-up consumer drive to move toward more sustainable and healthy food.”
Another growing area of focus in the sector is ‘deep-tech’ agrifood innovation, including robotics, remote sensing, new crop treatments, and — of course — alternative proteins. Much of this technical innovation is happening upstream, at the pre-harvest stage. Sundew, for example, is developing a chemical-free way to deal with aquaculture pests. Ellipsis Drive is creating a system that automatically analyzes satellite imagery, minimizing the need for companies to conduct field visits.
Innovation is also happening at the harvest level. Cerescon has developed an asparagus-picking robot which not only harvests the crop, but identifies which plants are not yet ripe.
The proliferation of deep-tech agrifood innovations has shifted the type of talent coming into the sector, Meiling said. “Five years ago, we started seeing a significant increase in the importance of engineering and information communication technology in agrifoodtech.”
As a result, “these technologies are becoming more accessible, affordable and approachable,” he added.
One of the most noticeable shifts in agrifoodtech in the past decade, Meiling said, is that it is now a truly global sector. “Startups are tackling global challenges,” he observed.
Netherlands-based plant breeding venture Solynta, for example, has developed potatoes with seeds – allowing for rapid selective breeding, whether for disease resistance, higher yields, flavor, starch content, or nutritional value. The company has secured €20 million ($24.3 million) from investors to support its development and growth.
“[Solynta] could be of major importance for the global food supply since the potato is gaining ground significantly as a staple crop, especially in Asia,” Meiling explained. “But seed potatoes are difficult to move around the world and difficult to breed.”
The Covid-19 pandemic has only heightened the agrifood sector’s sense of how truly global its challenges and opportunities are. Cerescon, the company with the asparagus-harvesting robot, has seen an uptick in interest in its technology since restrictions on movement led to farm labor shortages. The startup raised a €3 million ($3.64 million) round of funding amid the pandemic.
Adapt and grow
For its part, StartLife is responding to the increased focus on global agrifood solutions. Its accelerator program is open to startups from across Europe. In another pandemic-inspired shift, it’s going virtual to reach more international startups.
StartLife now provides online training on business development, such as building a team, financial modeling, and market validation, and it’s hosting virtual meet ups with potential corporate partners like Unilever, Givaudan, and Citrosuco.
“We were already chewing on this particular puzzle: how can we make this program more scalable?” said Meiling. “Covid-19 gave us the answer. Going online made it possible to scale up more.”
The shift online aligns with StartLife’s own evolving understanding of how and where agrifood innovation is happening. “We should embrace and support the best ideas, no matter where the startup is located,” Meiling said. “They should be where they can have the greatest impact.”
“The only true bottleneck is talent – and that’s also an invitation,” he added.