Interview: Food Tech Matters Partner Rockstart on European farming systems and some of its start-up investments
Launched in 2011, Rockstart is a VC accelerator that supports and empowers start-ups on their way to success across four domains: AgriFood, Energy, Health and Emerging Technologies. It provides start-ups with access to capital, market, community, and expertise by connecting them to partners, investors, mentors and the wider Rockstart network.
Headquartered in Amsterdam but with an international team, Rockstart has scaled and invested in over 200 start-ups.
What does the agri-foodtech sector in your country look like?
At Rockstart, we like to assess how the overall food supply system connects around the world, rather than one particular region. That said, we do have a strong focus on Europe where we see regional food production as highly mechanised and automated. Farming in European countries is still heavily subsidised (mostly through the Single Farm Payment) and farms would struggle to be profitable without this subsidy.
Additionally, since the system is specifically designed to manage the supply of agricultural commodities, farmers are often in a weak bargaining position when it comes to pricing their produce.
What is the most important progress made in agri-foodtech in your region?
The biggest progress comes from food and agriculture technologies that combine environmental, health and economic benefits. For example, Danish start-up Raahandel creates access to market via its platform for smallholder farmers, improving the producers’ top line revenue whilst also encouraging consumers to eat locally produced, sustainable products.
Another good example can be seen in technologies enabling more granular data capture and better decision making. Within horticulture, examples include Israeli start-up MyCrops which provides pest and disease detection through a highly accurate image recognition algorithm, and Danish start-up Nordetect which has created a lab-on-a-chip for fast, affordable and accurate nutrient analysis.
Which areas of the agri-foodtech sector are in particular need of innovation?
There is still a lot of work to be done around food loss and waste; the amount lost is staggering. The food supply system is still quite fragmented and so solutions that tie together different actors in the industry with a systems approach can help unlock the value of food waste/loss (which, according to some reports, is accountable for 8% of global CO2 emissions).
Good examples of upcycling solutions are Reduced, which upcycles food side streams into high quality food products, and Beyond Leather Materials which upcycles processed apples to create all-natural leather alternatives.
Another approach is to extend the shelf life of perishable products. Indian start-up GreenPod Labs use biotechnology to harness a mixture of natural active plant ingredients in order to slow down the ripening process of fruits and vegetables.
What are the challenges currently faced by the agri-foodtech industry?
Environmental impacts of agriculture and food distribution are well understood and pose an enormous challenge. Beyond the topics already mentioned around food loss/waste and inefficiencies in data capture and decision making, another massive challenge for the food industry is ensuring farmers are incentivised with the planet in mind. Governments can play a very impactful role by helping farmers employ practices that reduce CO2 emissions and move towards carbon neutral (better yet, carbon positive!) production.
An example of a start-up seeking to assist farmers in this way is CarbonSpaceTech. The start-up provides satellite powered carbon footprint monitoring for agriculture and maritime industries, enabling farmers to assess, measure and improve their carbon footprint.
What are the most important characteristics you look for when investing in start-ups?
It sounds cliché, but the team is central. We look for a diversified, commercially driven team with strong technical skills who are coachable and able to adapt. Subsequently, it is about market and timing – the most impactful and scalable businesses will solve a problem that addresses a large market, preferably one that is growing.
Which start-ups have you worked with/accelerated and why?
We have 25 start-ups in our current AgriFood portfolio. We have worked with all of the companies previously mentioned and we invested in them because they exhibited the right combination of team dynamics, skill and passion.
More examples include Agranimo which provides micro-climate intelligence to fruit growers. It has recently teamed up with a global transportation company, Nectar Holdings, to roll out its digital solution internationally.
Another start-up in our Indian portfolio is MoooFarm. The start-up connect 100 million dairy farmers through its own commerce platform, enabling farmers to be more prosperous and improve animal welfare.
Do you invest globally or in specific regions?
Rockstart has offices in The Netherlands, Denmark and Colombia. Our AgriFood fund invests globally, albeit with a heavy focus on Europe and particularly Belgium, The Netherlands, Luxembourg and the Nordics.
What is your advice for start-ups beginning in this industry?
Validate whether your customer is willing and able to pay for your product or service before launching commercially. We see a lot of promising technologies and teams with the best intentions to make our food system more sustainable and resilient, but who often fail to fully understand the needs and constraints of their customers. If you don’t have a good sense of the customer pain points and their ability to pay, then chances are that your business is not yet ready to scale.