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Venture capital firms show keen interest in investing in food-tech space

As much as 15 years ago – possibly even more – countries, in the Middle East, for example, began buying up farmland to secure food supply. If the same capital had flowed into plant-based foods or clean agriculture, the world would be a very different place than it is today.

In any case, the current skyrocketing interest in the future of food is great for the world in general.

KBW Ventures, one of the first movers in the food-tech space, provided backing to startup Memphis Meats, and joined a whole huge A-list of forward-thinking investors and futurists.

 “When we first went into Memphis Meats, that was a great moment for the future of food; investors lined up and supported a startup that was using technology to provide the world with the future of protein,” Prince Khaled bin Alwaleed bin Talal Al Saud, Founder and Chief Executive Officer of KBW Ventures,  told TechRadar Middle East.

Tackling food security

Speaking ahead of his participation at Bloomberg Live’s event dedicated to venture capital on August 1, in San Francisco, California, Prince Khaled said that he is endorsing companies like Memphis Meats for the future of humanity in terms of the environment and the obvious cruelty-free aspects.

“It makes me even prouder to see the biggest sceptics want to join the ever-growing number of VCs backing food tech. The future of food is about technology alleviating the harm that conventional methods, like factory farming, have on the environment, but it is also about food security. All of this is within our reach with modern-day research and technology,” Prince Khaled said.

Prince Khaled thinks that bio-science is the most exciting thing to happen in venture capital in a long time, that along with carbon capturing and neuroscience. “Three years ago, if I said the words ‘food tech’, I would have had a blank look as a response. Now, people are waking up to this massive market,” he said.

From a venture capital perspective, he said it was great getting in early obviously, but there are still tons of companies raising and lots of chances to invest. “I encourage everyone to jump in early but be picky with whom you invest your money with; this is the just the beginning,” he said.

Plant-based meat substitutes

A number of challenges were raised when Prince Khaled participated in a discussion around plant-based investing and venture capital in San Francisco recently. “Something else that wasn’t discussed but should have been in the politics around language; there are lobbyists trying to limit the use of the words ‘meat’ and ‘milk’ – mostly because they are intimidated by the market potential of plant-based products,” he said.

Moreover, he said that they [lobbyists] want to prevent people from buying alternative proteins despite the taste and texture is just as good and they’re better for the people. “Many traditional industries in history have fought waves of innovative technologies; it’s an old formula that doesn’t work. They can fight, but the advancements speak for themselves,” he said.

“Tim Hortons, a franchise in Canada, announced that they will be serving the ‘Beyond Burger ‘patties. This follows the announcement that US-based Carl’s Jr. will serve the ‘Beyond Famous Star’ burger in partnership with Beyond Meat, a Los Angeles-based producer of plant-based meat substitutes founded in 2009. Burger King also announced the ‘Impossible Whopper ‘in partnership with Impossible Foods. These are powerhouse partnerships that no one would have believed could happen even two years ago. Beyond’s super successful IPO has catapulted plant-based products into the spotlight, and subsequently into the wheelhouse of investors who were previously were skeptical,” he said.

Folia, a conceptual menu developed by Chef Matthew Kenney and KBW Ventures, was recently  piloted in Beverly Hills at the Four Seasons, and is now made available at all the hotel’s outlets and also in-room dining. Folia then launched in the GCC at the Four Seasons Bahrain Bay in Manama as KBW Ventures’ first Middle East instalment.

“We want to give everyone the opportunity to enjoy a true ‘health food’ section of hotel menus developed by a master chef, presented at a superior venue with great service. We are now cementing our newest two venues in a very important Middle East city and it should happen around mid-August or early September,” Prince Khaled said.

A diverse portfolio

KBW Ventures’ main investment areas are in varying technology segments like innovative logistics, deep tech, bio-sciences and food science. “Some of our investments are business-to-business (B2B), so not consumer-facing but highly original and groundbreaking research and technology. I think one of the biggest missed opportunities by investors in the MENA region is skipping over B2B tech, mostly because it is probably not something they have an interest in understanding - some of these companies have complex products and services, so a lot of research and market knowledge is required before committing to a round,”  he said.

For Prince Khaled, bio-sciences still tops the list in terms of inspiration and the future of food from cellular agriculture to fermentation to plant-based protein. He believes that products like clean meats can be brought to market sooner than most people think.

“I find more naysayers than supporters about this actually, but the technology is advancing quickly. I’m always talking about putting your money behind your beliefs, but in this case, you don’t even need to believe in the sustainability arguments or the ecological benefits,” he said.

The truth is when bio-science companies perfect the clean meat formula, in terms of its cost, he said it will be a market that explodes overnight. “The gross inefficiencies in the traditional meat industry will cause it to implode on its own.  A lot of people love meat and are oblivious to where it comes from or what the process is to get it on his or her plate; clean meat allows them to eat a completely cruelty-free and antibiotic-free, hormone-free steak or chicken or duck without any of the other stuff so pervasive in the conventional meat marketplace,”  he said.

Prince Khaled is betting big on the potential of technology that can find solutions to sustainable development, food security, and the application of that technology to various problems like financial inclusion. “We do like companies that have a social good element as part of the business model, but we’re not married to that idea. It does still have to have the potential to scale and turn a profit; because that is where the future of solving these pressing issues lies.

“We want to see companies that are bold and studied. Big ideas are excellent, but there has to be logic and real-world interest and need for any idea to be considered by KBW Ventures,” he said.

Using drones to save lives

Prince Khaled said that solving the ‘last mile’ for delivery issues in the Middle East has been one of the biggest discussions in tech over the past few years.

“The focus - with startups especially - is primarily B2C though. Businesses recognize the consumer element: ‘How do we get access to the really under-served demographic of potential customers? How can we convert these people into buyers?” he said. 

KBW Ventures recently invested in US-based drone delivery company Zipline, and Prince Khaled said that the company has huge potential to use its drones for important healthcare applications.

“For Zipline, the thinking is that we can help save lives by facilitating access to lifesaving medical supplies – including biomaterial. I do believe there’s potential in MENA for Zipline, especially in North Africa.

“I can confirm that we have initiated early conversations about Zipline’s application. Zipline is an example of tech for good, and we’re proud of their significant progress,” he said.

Treating companies like Zipline as a logistics company, and not just as a medical supply company will lead to even more opportunities, he added.

“As soon as regions like North Africa or the EU open their skies up to drone delivery, Zipline will have hundreds of thousands (if not millions) of hours of flights under their belt with a very successful end result,” Prince Khaled said.



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