New Israel foodtech fund joins with Cornell to dish out healthier meals

Medstrada VC fund aims to invest in food technology startups in Israel, Europe and the US; CEO wants to employ food in the service of better health, as did the doctors of yore

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

Illustrative image of food. (Lisovskaya; iStock by Getty Images)
Illustrative image of food. (Lisovskaya; iStock by Getty Images)

A new VC fund is being set up in Israel by a veteran venture capitalist to tap into the global growth in interest in foodtech — the art of using technology to make healthier, more streamlined and more environmentally friendly food and beverages.

“From Hippocrates to Maimonides, the message was Let food be thy medicine and medicine be thy food,” said Ruti Alon, the CEO of the new fund, Medstrada. Alon has over 35 years of experience in the life sciences industry, and served as general partner and head of life sciences investments and policies at Pitango Venture Capital, Israel’s largest VC fund, from 1997 to 2016.

“All along I was dealing with finding technologies that can help cure illnesses,” she said in a phone interview. “But then I started thinking, is there something we can do to avoid becoming sick, or reduce the severity of our prognosis? Can we live in a more healthy way? Food is one of the obvious ways,” she said.

Maimonides, also known as Moses ben Maimon or by the acronym Rambam, was a medieval Sephardic Jewish philosopher and an influential Torah scholar.

Health and environmentally conscious millennials are seeking alternatives to processed, high-calorie and high-sugar diets, and food manufacturers are paying attention. Companies like US Chobani have set up food incubators; Tyson, one of the world’s largest food producers, has set up a venture capital arm to invest in new technologies; and Italy’s Barilla, the pasta guru, has launched Blu1877, a venture fund and innovation lab where it develops and invests in new food concepts.

Recent exits of Israeli companies in the food segment have raised Israel’s profile in the food sector.

Newly elected CEO of PepsiCo, Ramon Laguarta (right), and SodaStream’s Daniel Birnbaum at the signing of the acquisition deal, August 20, 2018, at SodaStream’s offices in Israel (Lens Productions)

PepsiCo said in August it would buy SodaStream for $3.2 billion in cash, while the US firm International Flavors & Fragrances (IFF) said in May it would purchase Israel’s Frutarom, a maker of flavors and fragrances for use in food, beverages and pharmaceuticals, for $7.1 billion, in the second largest deal ever for an Israeli firm. Meanwhile, in July, Dutch signed an accord to buy online food marketplace 10bis for $157 million, and in May Tyson invested in the Israeli startup Future Meat Technologies, to find ways to grow meat without raising or slaughtering animals.

According to the database of Start-Up Nation Central, a nonprofit that tracks the tech industry in Israel, there are some 266 active startups working in the field. Recent exits of Israeli companies in the food segment have raised Israel’s profile in this sector.

Enter Medstrada, which aims to invest in foodtech startups in Israel, Europe and the US. Alon has started the process of fund raising, and said the target audience is those investors who have an interest in food technologies and food companies. She declined to say how much money has been raised to date.

The “vision” of the fund, said Alon, a former Wall Street healthcare analyst, is to set out a path toward “healthy food, healthy living and a healthier planet.”

In Medstrata, Alon has teamed up with Ilanit Kabessa Cohen, who founded and led food giant Nestle’s Israel Innovation and digital business unit for the past seven years and was a core team member in Nestle global innovation headquarters.

Ruti Alon, the founder of the Israeli VC fund Medstrada, which will focus on fostering food technology startups (Courtesy)

“Our focus will be to invest in companies whose products have health benefits” in four main categories, she said. These are personalized nutrition; new foods, like meat grown in labs or alternative protein sources and new ingredients; food and data analytics, to track consumer patterns; and food safety, security and management.

The fund last week said it had entered into a partnership with  Cornell University’s College of Agriculture and Life Sciences (CALS)  to set up a foodtech “entrepreneurial community” in New York State that will take on “some of the world’s most pressing challenges in agriculture, nutrition and food production.”

The Cornell food and agriculture faculty is perhaps one of the best in the world, Alon said. “We visited them and had many discussions about what they do and what technology programs they want to take forward. There is a huge gap between tech understanding and how to take an idea to the market place.” By linking Medstrada’s network and financing knowledge with Cornell’s researchers and innovations, “our joining hands will be beneficial to both sides,” she said.

Medstrada’s portfolio of companies would have access to Cornell researchers and benefit from a network of global partners, she said. The idea is to “support and leverage” Cornell excellence in food and agriculture, “and now our portfolio companies can be part of that system.”

Some of the potential collaborations CALS and Medstrada are exploring include: providing business development services and mentoring; linking companies with venture capital; sponsoring research work with startup companies at Cornell; creating internship opportunities for students and sabbaticals for faculty to engage with specific companies; and working together to identify opportunities for new projects.

Ultimately the goal is to expand this model beyond CALS and Medstrada, to include other academic institutions and venture capital investors, to grow and sustain an ecosystem of foodtech businesses in New York State, the parties said in a statement.

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