Jerusalem Venture Partners (JVP), a venture capital fund, said on Wednesday it has set up a partnership with Mars, Incorporated, a US maker of candy and pet food, to scout for and possibly jointly invest in research and development projects in Israel that seek to create new tech solutions for global food, agriculture and nutrition challenges.
Under the terms of the collaboration, Mars will support Israeli startups and the formation of companies, and will work together with leading Israeli academic institutions, such as the Hebrew University of Jerusalem, the Weizmann Institute of Science and the Technion- Israel Institute of Technology, to further foodtech innovations.
Mars Edge and the Mars Advanced Research Institute, unites of Mars, will explore the convergence of food, health and technology that they believe will fuel the next generation of agriculture and nutrition, the parties said in a statement.
The partnership will tackle global sustainability issues by addressing the challenges of feeding the world in an environmentally friendly way and will also look into personalized nutrition, the statement said.
“Israel has been a case study for how innovation can change a country and transform the world,” said JVP founder and executive chairman Erel Margalit in a statement. “After building global companies and solutions in cybersecurity, AI and big data, Israel has set its sights on food as the next frontier. As food and nutrition needs change around the world, we need to create more nutritious, accessible and sustainable food solutions. And by partnering with Mars, one of the world’s most iconic brands at the forefront of innovation, we are confident in Israel’s ability to be the food tech leader of the future.”
Foodtech — the use of technology to make healthier food, streamline distribution and develop the next generation of food and beverages — is growing around the world. Agriculture and foodtech startups raised $16.9 billion in 2018, which represents a 43% increase over the previous year, according to a 2018 AgFunder report.
Despite its size and population, which are dwarfed by sector leaders like the US, China and India, Israel has developed into a competitive and attractive global hub for agricultural and food technologies, ranking among the top five countries in 2016 for number of investment deals, according to Start-Up Nation Central, a nonprofit that tracks the Israeli tech industry. 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 Start-Up Nation Central.
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. 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. In April, food and beverage maker Mondelēz International, the manufacturer of Oreos and Toblerone chocolate, said it will collaborate with tech incubator The Kitchen to tap into Israeli food tech scene.
JVP has set up an initiative to transform Israel’s Upper Galilee region into a global foodtech center, connecting firms in Israel to other global tech hubs in the US and Asia.
“Mars is passionate about leveraging leading science and technology to innovate,” said Jean-Christophe Flatin, president of Innovation, Science, Technology & Mars Edge at Mars, in the statement.”We are clear that we need forward-thinking partnerships and collaborations to do this.”
Mars is a century-old family-owned business that is behind renowned candy brands such as M&M’s, Snickers and Twix, as well as pet food including Pedigree and Royal Canin. The firm has more than $35 billion in sales.
“We are eager to partner with JVP and tap into the innovative ecosystem of the Israeli food, health and technology community,” said George Graham, vice president, Mars Advanced Research Institute, in the statement. “This exciting collaboration will help us access and be part of solutions specific to global challenges in the food system related to ag tech, nutrition and food security.”
JVP, set up in 1993 by Margalit, has to date raised $1.4 billion across nine funds. The VC has financed over 130 companies and facilitated 12 initial public offerings on the Nasdaq exchange in the US, including that of CyberArk Software, QLIK Technologies and Cogent Communications.