For Stephanie Dorsey, founding partner at US investment firm E²JDJ, agriculture is undergoing “accelerated evolution” out of the industrial age and squarely into a digital and biological one.
This is being driven by advancements in artificial intelligence, robotics, and manufacturing, as well as a decrease in costs for genetic sequencing and a proliferation of entrepreneurs in the space, she tells AFN.
Dorsey and her co-founder Corey Jones are aiming to participate in this transition in 2022 by backing more cutting-edge foodtech and agtech companies.
Launched in March 2021, E²JDJ invests in early-stage startups with solutions that contribute towards this “evolution” of agriculture and food production.
“We’re really focused on the intersection of food systems health and the environment. Everything that we look at has a lens of sustainability or nutrition,” says Dorsey.
That list of companies is eight strong at the moment, including alt-seafood startup Good Catch, AI-driven ingredients design company Perfeggt, and two farm automation startups: Agtonomy and Verdant Robotics.
This focus all the way across the value chain, from upstream to downstream and production to consumption, is intentional.
“The food system will be disrupted [not by just] one component, but it’ll be a layered disruption,” Dorsey says. “We wanted to invest at those different points where we saw the most disruption. For those reasons, the four particular areas that we look at are foodtech and science, agtech and science, cellular agriculture, and synthetic biology.”
At present, E²JDJ has made investments in all those areas except for cell ag.
In the case of Perfeggt, the New Orleans-based firm was drawn to the startup’s focus on replicating the many different functionalities of the egg – as opposed to just making a plant-based analog that can be scrambled in a pan.
Perfeggt raised a $2.8 million initial round of funding from investors including E²JDJ in November 2021. While the German startup’s first product is indeed a liquid egg replacement that can be scrambled, it has bigger plans. At the time of the funding announcement, co-founder and chief product officer Bernd Becker said his company is “laser-focused” on replicating the multifunctional and versatile characteristics of egg in addition to nailing taste and texture.
“Instead of thinking about making some alternative that only replaces one of the applications of a eggs, [Perfeggt] thinks about a platform that allows the founder to be able to create alternatives for all applications, and to do that in a quick as well as scalable way,” Jones tells AFN, explaining his firm’s rational for investing.
“We were impressed by how they moved from breakthrough discoveries to actually getting a viable prototype and then getting to the first version of their product way ahead of schedule,” Dorsey adds. “[And] also how they really systematically thought about the supply chain.”
Another recent investment for E²JDJ was in California’s Agtonomy, which came out of stealth mode in 2021 with its suite of sensors and software that turns tractors and other farm equipment into autonomous machines.
“Their business approach is really unique in that you either see companies that are building tractors from scratch, or they’re retrofitting the tractor,” Dorsey says.
“Agtonomy is working with original equipment manufacturers to automate tractors and digitize them to roll out various iterations of equipment in a scalable way. They’re going after both agriculture and land maintenance operations. It’s commercially scalable but broadly applicable to various categories.”
2022 and beyond
Looking to the next 12 months, Dorsey and Jones see a few specific areas as key to agrifoodtech’s trek towards a fully digital and biological age. One of the biggest is the supply chain, which is both a major contributor to global emissions and in a gigantic mess because of problems related to the Covid-19 pandemic.
“No company was unscathed by the [pandemic-related] disruptions in the supply chain, and it became abundantly clear to everyone that supply chain logistics are an area [where] you have to have a plan B, C, and D,” says Dorsey. “Companies that have been able to navigate that have been super impressive for us.”
Synthetic biology is another key area. “We’re really thinking about it as an enabling technology that just drives radical change in diverse industries,” she says. “[In the same] way that the internet drives commerce and communications, we see that synthetic biology is really going to drive the physical world.”
Jones accepts that there are “a lot of naysayers thinking about small ways in which the unit economics don’t work, or consumers aren’t adopting quick enough.”
“But if you look at the big picture, I think in 10 to 20 years, we won’t even recognize what we used to call the food and ag industry.”