Israel food tech firms on track for record funding year, report says
Agriculture and food technology sector sees $109 million injection in first half of 2019, more than the total raised in all of 2018, according to Start-Up Nation Central
Shoshanna Solomon was The Times of Israel's Startups and Business reporter
Israeli food and agricultural startups are on track to post a record year for funding, raising $109 million in first half of 2019, more than the $103 million raised in full year 2018, a new report shows.
According to data compiled by Start-Up Nation Central (SNC), there are 350 tech companies that operate in the agri-food tech sector, over a third of them founded over the past five years. In just the last 3.5 years, 2016 to mid-2019, 124 startups were founded — more than the total founded in the six years prior.
The rate of new company creation has sharply accelerated in recent years with an annual average of 37 new startups since 2014, the report said.
This trend represents “an increasing number of Israeli entrepreneurs detecting an opportunity to disrupt global food production, using current advances in the sciences and hi-tech,” SNC said in a statement, calling this acceleration the “second wave” of Israeli agri-food t ech.
From 2014 through the end of 2018, Israeli firms operating in the food and agricultural industries raised some $800 million across more than 250 deals, according to data compiled by SNC, which tracks the industry.
Israel has historically had an edge in agricultural innovation — setting up irrigation firms like Netafim and milk-measurement-technologies maker SCR — thanks in part to its lack of natural resources and its kibbutzim, the farming communes it pioneered.
The “second wave” food and agricultural technologies now being developed in the nation are focused on yield and harvest management: growing and harvesting food in optimized ways through data and computation, smart machinery and robotics, SNC said.
Also prominent in the new wave is the emergence of an alternative food sources subsector: the number of startups offering solutions to animal protein and sugar consumption has doubled in a decade.
“We see a transition from food security to nutritional security, and growing interest not only in increasing yield and profit, but also in health and sustainability. Data is transforming this industry,” said Tamar Weiss, Agri-Food Tech Sector Development Manager at SNC.
These firms use big data analysis, sensors, biotech, and robotics to make their impact in a world that is seeking new technologies to face a rise in demand for food and water.
Global investors are paying attention: In March, McDonald’s Corporation said it would acquire Israel’s Dynamic Yield Ltd., a startup whose software enables the personalization of content to specific users. And earlier this month the US fast-food giant said it had entered an agreement to buy Apprente, a maker of technology that automates voice orders.
In April, the US maker of Oreo cookies and Toblerone, Mondelēz International, said it will scout for food technologies in Israel and in May, Mars, Incorporated, the maker of candy and pet food, said it will seek to invest in food and agriculture R&D projects in Israel, together with Israeli venture capital fund Jerusalem Venture Partners (JVP). Last year, beverage maker PepsiCo signed a deal to buy home seltzer machine firm SodaStream for $3.2 billion in a bid for healthier, alternative drinks.
Companies like CropX, Taranis, and SeeTree use big data and sensors to increase farmer awareness of their crop conditions, grant greater control over sustaining and tailoring phenotype, and alleviate farm labor shortages through automation; BeeHero tracks beehive conditions and pollination patterns in fields to keep farmers informed.
Future Meat Technologies and SuperMeat grow beef and poultry cells, respectively. and Aleph Farms and Biofood Systems, are among the few initiatives in the world offering whole-muscle beef grown without the animal.
Amai Proteins and DouxMatok make sugar alternatives to tackle the sugar industry’s effects such as obesity, tooth decay, and diabetes.
The data was released by SNC ahead of AgriFood Week, an international gathering of startups and investors in the sector that will be held later this month in Tel Aviv. The multinationals attending the event will include Pepsi, Bayer, AB InBev, BASF, Mondelez, Cargill, Nestle, and Syngenta, SNC said in a statement.
