From redefining the relationship between consumers, food makers and supply chains, to addressing big picture challenges around sustainable food production, food tech innovators are making their mark on the global food system.
As a result, food tech start-ups are attracting greater levels of investment and interest than ever before, with venture capitalists and corporates alike scouting out potentially transformative technological developments.
Using its technology platform tracking over 30 million companies to monitor deal-making and start-ups globally, Tracxn​ has provided FoodNavigator with data on the food tech investments made in the Europe, Middle East and Africa region during the first quarter of this year.
Funding rounds in the January to March period highlight the high degree of innovation taking place in the digital space, with new e-commerce platforms being developed as digital comes to redefine the interface between production and consumption.
Three deals – all in the UK – highlighted investor appetite for meal kit delivery concepts, with Gousto, Mindful Chef and SimplyCook all securing fresh capital.
Digital developments are also blurring the lines between restaurants and home consumption. Keatz, which operates ‘cloud kitchens’ - delivery-only restaurant brands running on the rails of Deliveroo and UberEats — raised €12 million in new funding, while the UAE’s “internet first restaurant​” serving homemade meals, Yawmi, also raised an undisclosed level of investment.
The €6m investment in Too Good To Go highlights another significant investmnet trend: mission based businesses are attracting financial backing. The fast-growing food waste app, headquartered in Copenhagen, allows users to “rescue​” surplus meals from restaurants, hotels and supermarkets that have not been sold. Since launching in Copenhagen in 2016, Too Good To Go has grown to 7.5 million users across nine countries in Europe. Currently, it works with move than 15,000 food establishments, including Carrefour, YO! Sushi and Mandarin Oriental.
Tiger Global Management has invested around €50m in Flaschenpost, a German start-up that said the cash will be used first for national, then international, growth.
Founded in 2016, Flaschenpost allows consumers to order alcoholic drinks for delivery within two hours. It operates in eight regions in Germany and says it completes as many as 50,000 orders a week.
In addition to Tiger Global, other well-known venture capital funds have invested in Flaschenpost, including Cherry Ventures and Vorwerk Ventures.
French start-up Lunchr attracted funding of around €30m from Index Ventures, with existing investors Daphni, Idinvest and Kima Ventures also participating in the series A round. The company already raised €11m last year.
In France, companies of a certain size are required to support their workers over lunchtimes. Larger corporations typically provide a cafeteria while smaller companies will provide meal vouchers. Traditionally, these were distributed as paper vouchers – but companies like Edenred or Sodexo now provide a card alternative.
However, many restaurants and supermarkets won’t accept these cards because they would have to upgrade their payment terminals. As a result, 85% of all meal vouchers in France are still paper-based.
Lunchr wants to provide a better experience – one that starts with a card accepted in more locations. As long as outlets already accept paper vouchers, food outlets don’t need to make any updates. Lunchr currently supports 200,000 places in France.
UK meal kit provider Gousto attracted £18m (€20m) in equity funding, which the company said it would use to continue investment in technology for growth and development.
The funding came from existing shareholders: Unilever Ventures; Hargreave Hale; BGF Ventures; MMC Ventures and Angel CoFund. Gousto also caught the eye of a new backer, “global health influencer” Joe Wicks.
Gousto’s latest fundraising move brings total investment in the group to £75m (€83.8m). It follows hot on the heels of a £28.5m (€31.8m) investment round in March, proceeds from which are being used to double the firm’s production capacity.
Gousto said the fresh capital will be used to strengthen the company’s machine learning and automation capabilities.
The company is placing AI at the heart of its customer offer, recently having debuted an AI-based recipe recommendation service that directs customers to dishes that should interest them. Half of the group’s customer orders are now placed through its recipe-recommendation system.
“Our customer is at the heart of Gousto – every aspect of our business is about them. Our new funding enables us to do more for them: from developing leading AI technologies that improve their shopping experience, to launching new product ranges that appeal to their needs,”​ CEO and founder Timo Boldt said.
Increased automation could also potentially address one of the largest challenges facing meal kit services – high overheads and cost-base. Gousto will continue to prioritise the majority of its investment in technology to accelerate growth, the company revealed.
Gousto set itself the ambitious target to serve up 400 million “balanced and nutritious”​ home-cooked meals by 2025. According to investors MMC Ventures, the company is “already ahead of its target”,​ achieving 170% year-on-year growth and delivering over 1.5 million meals a month to customers, two-thirds of which are families.