Join the Newsletter

Stay up-to date with food+ag+climate tech and investment trends, and industry-leading news and analysis, globally.

Subscribe to receive the AFN & AgFunder
newsletter each week.

Why FoodBytes! is Heading to Chicago

May 27, 2019

Chicago is clearly a powerhouse for the food and agriculture industries. Based in the MidWest, it’s a key agricultural commodities trading hub, and it’s home to the US’ largest food manufacturers.

According to the Chicagoland Food & Beverage Network, more than 4,500 food and beverage companies are based in the greater Chicagoland area alone, accounting for 130,000 employees and $32 billion in sales.

The city is less well known for its venture capital prowess, but according to recent data from PitchBook, Chicago startups have made their investors more money than Silicon Valley and New York in recent years.

Chicago was the top performing city between 2013 and 2018, according to the median multiple achieved for investors during that time: 5.6x. That was significantly ahead of New York — 4.4x — and San Francisco — 4.2x.

Chicago is natural fit for FoodBytes!

To take advantage of these dynamics and develop the ecosystem for agrifood startups further, Rabobank’s FoodBytes! pitch competition is coming to the city this fall, and applications are now open for startups to apply.

For FoodBytes! Chicago, Rabobank is seeking out startups focused on animal health, sustainable production, soil and water conservation, robotics, precision agriculture, food safety, food waste, food as medicine, sugar alternatives, novel healthy ingredients.

“FoodBytes! is a natural fit for North America’s food manufacturing hub, with its robust food innovation community made up of startups, investors, corporates, accelerators and more,” said Nina Meijers, relationship manager – startups at Rabobank. “We’re excited to bring together that existing ecosystem with global food tech and agtech innovation players. From sustainable production and precision ag to food safety and sugar reduction, we’re on the hunt for the best and brightest startups driving sustainability throughout the value chain. FoodBytes! Chicago aims to be the Launchpad to scale their innovations.”

Based on rigorous criteria, fifteen companies will be selected to showcase their business in front of a live audience, convince a panel of judges, and impress the crowd for the chance to win one of three prizes: the Consumer Packaged Goods (CPG) Award, the Food and AgTech Award (selected by the judges) and the People’s Choice Award (as voted by the audience across categories).

“FoodBytes! gave us the confidence to scale nationally and faster than if we hadn’t been involved, ” said Megan Klein, co-founder and president of Here Foods and FoodBytes! Montreal alum. “The Midwest has a massive entrepreneurial ecosystem, and we are thrilled to welcome FoodBytes! to Chicago. We encourage innovators that want to enhance their exposure and make a real impact on the future of food to apply.”

Why Chicago outperforms

Chicago’s ecosystem, with its Midwestern values, tends to favor startups with big business potential aligned with demand-inspired visions, as opposed to creating big visions and then solving for the demand side. This is appealing to many venture capital investors. At the same time, startups entering a growth phase find Chicago an appealing expansion site for its manufacturing strength, says Michael Lavin from Germin8 Ventures.

“When startups think about where their customers are, Chicago can often be a central hub for business development,” he says. “While already strong for CPG startups, there are relatively few tech startups offering agriculture-focused solutions based in Chicago but not for a lack of opportunity; as a key trading hub, fintech for agriculture and online grain marketplace technologies could be a great fit for the city,” according to Lavin. “Midstream technologies for the food manufacturers would also be an obvious fit for the city.”

As to why Chicago has outperformed more bustling venture capital ecosystems of Silicon Valley and New York, Lavin said it could be a function of the size of investments and startup valuations with lower premiums.

“I think it’s probably up for debate as to why, but there’s a relative shortage in venture capital funding in Chicago, especially at the early stages, which causes startups to focus on bootstrapping and generating cash quickly. This can lead some to focus on making a profit too soon, hampering the scaling process; this is a break from Silicon Valley where entrepreneurs and their investors focus on scaling strategies and revenues first, then profit much later and likely after exit. Personally, I believe both schools of thought have merit and Chicago could benefit by taking some pages from the Silicon Valley playbook to encourage curiosity and prioritize growth aspirations over the tradeoff for early profitability, while still maintaining a practical view on the customers and unit economics,” says Lavin.

“Rabobank, through both their FoodBytes! Platform and TERRA Accelerator, is a force in the ecosystem. Rabobank is a premier financial institution in the agriculture sector, but much more than that — their commitment to driving the sector forward through innovation is a mission that permeates the entire organization. Germin8 and many others are proud to call them close colleagues and friends. I’m very glad they selected Chicago as a destination for FoodBytes!, an event I began attending when I launched our fund in 2017. It’s a must for startups and investors on the cutting edge, and I have continued to prioritize FoodBytes! ever since. It will be exciting to soon welcome them to ‘Food Valley,’ he adds.

Home to two of agrifood tech’s most active investors — S2G Ventures and Cultivian Sandbox — the rest of the investor ecosystem for agrifood is fragmented, like most of the world, and includes family offices and small VC funds.

What’s on offer

Chicago could benefit from the FoodBytes! program with its focus on facilitating introductions across the Rabobank network of corporate clients; the winners will also get to pitch and network with C-level food and agriculture (F&A) executives at Rabobank’s Annual Food & Agriculture Summit in December 2019.

The competition also includes:

● A full-day mentorship immersion led by industry experts on fundraising, legal and go-to-market strategy

● Tailored conversations with the judges and direct feedback on products, technologies, and pitches

● Valuable in-person networking opportunities with corporate leaders, investors, influencers and peers

● Ongoing support from Rabobank Food and Agriculture (F&A) experts

● One-on-one connections during the Investor Power Hour

● Access to the community of FoodBytes! alumni

Apply for FoodBytes! 16th iteration by Sunday, June 23 by 11:59 pm CDT.

*This article was sponsored by FoodBytes! as part of the AgFunder Network Partner program.*

Image credit: Kassie Borreson Fotografie

Join the Newsletter

Get the latest news & research from AFN and AgFunder in your inbox.

Join the Newsletter
Get the latest news and research from AFN & AgFunder in your inbox.

Follow us:

AgFunder Research
Join Newsletter