Investors have followed these trends from mutual funds for ‘clean’ stocks to venture capital promoting innovation in biotech for alternative protein
The outbreak of novel coronavirus has refocused attention on animal farming practices and the additives that go into animal feed. Even otherwise, there’s been a growing consumer pushback against dairy, poultry and fish pumped up with antibiotics, hormones and chemicals. Demand for products from traceable, organic and naturally-bred animals is rising along with a shift to plant-based foods.
Investors have followed these trends from mutual funds for ‘clean’ stocks to venture capital promoting innovation in biotech for alternative proteins. For example, European VC Seventure Partners launched its AVF fund in 2018 to invest in startups developing technologies to produce food in healthier and more sustainable ways. It made its foray into India last year when it invested in Bengaluru biotech startup String Bio that is fermenting methane into fish and poultry feed.
“Other than new ingredients for animal feed, we’re looking at the field in a broader sense, especially in digital tools to enhance the food value chain and respond to changing consumer expectations,” says agronomist Laetitia Gerbe, a partner with Seventure looking after AVF investments.
Gerbe’s portfolio includes French startup Tibot, which has developed robots that improve performance and breeding conditions in poultry farms.
Another portfolio startup, Inspecto from Israel, has made a hand-held device that can detect pesticide residue levels in food. Farmers, suppliers, retailers, quality assurers and buyers can use the device at any point in the supply chain and get results in real time.
“Consumers are questioning widely used practices as the food industry faces issues with contaminants and diseases,” says Gerbe. “When we talk about animal nutrition and health, Asia is one of the biggest markets for production of fish, poultry and pork. So, this is definitely the place where we will be able to invest further in innovation, but step by step.”
LOW RISK APPETITE
Seventure entered India in partnership with Bengaluru-based early stage VC Ankur Capital, which backs disruptive technologies in agriculture. Biotech is critical to this, but risk appetite is at a nascent stage, says Ankur Capital MD and co-founder Ritu Verma.
Funding will induce people to come out of labs and corporate jobs to take up entrepreneurship. VC funding of biotech startups in India was a mere $13.68 million in 2019, less than 0.1 percent of the total funding of $14.5 billion, according to data tracker Tracxn. And most of the biotech funding went to health, not agritech.