Thank you to everyone who came out to our event, “The New Food Chain: Investing in Food Startups” where we learned about world of food and technology and what kinds of investment opportunities and new startups were were in the space today. Investors like William Rosenzweig Managing Director of Physic Ventures, Ilya Fushman, Ph.D., Principal, Vinod Khosla Ventures, and Tom Cole, Former Investor, Trinity Ventures shared their expertise on the market and what to look for when investing in a food startups. We also saw demos from hot new startups like Culturekitchen, Spoondate and Foodspotting and many more. Below are some take-aways from the evening.
The Big Picture
William Rosenzweig from Physic Ventures opened the event by providing the audience with a snapshot of innovation in the space with a slide of a food startup map. Having started Republic of Tea, and being one of the early founding executives at Odwalla, he shared best practices for growing a new product/brand in the industry. Will founded Physic Ventures to help continue to spur innovation in the food industry and partners with Unilever and Pepsico to help fund new innovators in the space. Will laid out the primary obstacles for food startups and investors in this space:
Food has slow adoption rates
Barriers of entry for this space are low
There is a lack of seasoned entrepreneurs in this segment of the industry
Food distribution channels and systems are entrenched
Will’s advice to aspiring companies: “Be your first customer.” Andrew Pederson, Global Sustainability Chocolate Manager at Mars and Michael Hammer, Director of Venture Capital Strategy at Pepsico both talked about how large food corporations are working toward putting out products that have healthier ingredients and sourcing from sustainable farms.
Investing in Food Startups
Later, we turned to our investor panel to better understand how technology and social media are influencing the new food market. We specifically asked our panelists for what they were looking for in today’s new food startups.
Tom Cole, formerly at Trinity Ventures and currently personal investor and food blogger was looking for startups who were not overcapitalized at the start of their business. He said that many food companies don’t need that much money to start out and if they overcapitalize, they then have to generate bigger milestones and a clear exit.
Ilya Fushman from Vinod Khosla Ventures said he was interested in startups who were providing solutions to distribution challenges. He is also interested in companies that have a technology advantage and unique IP.
Dave McClure from 500 Startups said he looks for startups that are capital efficient, revenue oriented, have online platforms, and have a good distribution model. He is convinced that it is not hard to find customers with food startups since food is a “highly frequency behavior that is highly social.”
William Rosenzweig from Physic Ventures talked about looking for teams who can work well together as food startups take more then one leader. He is also looking for entrepreneurs who can predict trends in the food market.
We also heard from companies, like Google, who have built entrepreneurial food programs as part of their corporate wellness efforts. These programs have spurred new trends in local communities. For example, Executive Chefs: Scott Giambastiani, Quentin Topping and Olivia Wu spoke of community supported agriculture and their new community supported fishery, where they bring locally sourced food to employees to buy and take home.
In The Oven
We had over a dozen demos from startups that are changing the way we order, consume, cook and interact with food. Here are some of the highlights:
Culturekitchen connects immigrant women with local foodies who want to learn traditional home recipes from around the world. (Founded by Jennifer Lopez and Abby Sturges)
Punchfork scans social networks and the web for recipes and displays the ones that have been visited and shared the most. (Founded by Jeff Miller)
Spoondate lets you enter what you are craving into a comment stream and opens up the possibility of meeting someone else for a date over the same craving. (Founded by Raissa Nebie)
- Munchery allows you to order meals cooked by chefs for events. (Founded by Tri Tran)
- Cookpad is the leading recipe sharing site in Japan with over 10M users. (Founded by Aki Sano)
- Skipola allows restaurant chains to receive digital orders using an phone app. (Founded Igor Lebovic)
- E La Carte puts tablets on tables at restaurants so you can order and pay for your food more efficiently while you play games. (Founded by Rajat Suri)