“Fertile ground” for agri-food innovation: Israeli start-ups secure US$800m investments within 5 years

22 Mar 2019 --- Investments in the Israeli agri-food start-up sector have boomed from 2014 to 2018, raising almost US$800 million in funding over this period. This is according to a recent investing report from venture capital (VC) platform AgFunder. Due to the country’s location and unfriendly desert climate, agricultural practices prove challenging. Yet, Israel, rising to the occasion, is proving “fertile ground” for agri-food innovation and the start-ups that drive it.

The report notes that over the five-year period examined, Israeli agrifood tech startups have raised almost US$800 million across more than 250 deals. And there are many more startups in the ecosystem, with current count at around 700.

“While the totals may appear low next to the US$17bn invested in agrifood tech in 2018, for a country the size of the US state of New Jersey, these figures are impressive.

There are many macro and micro reasons for this level of innovation, and the outsized traction Israeli startups get on the world stage, making it an important market to watch,” the report authors claim.

The great disruptor
Agri-food tech is a growing segment of the start-up and venture capital universe that’s aiming to improve or disrupt the global food and agriculture industry. In this space, Israel is seeing increasing growth as the country with long practiced innovation in farming techniques, breeding, and water conservation that has allowed its farms to feed the local market and even export produce.

According to the AgFunder report, this farming expertise combines with data, sensing, and mechanical engineering training from elite units in Israel’s military. Some of the most advanced imaging and processing technologies that drew the largest investments in recent years are based on Israeli innovators’ military training, which they have repurposed for agriculture.

FoodIngredientsFirst highlights several agri-food Israeli start-ups that have stood out in this space.

Aleph Farms
Lab-grown meat expert, Aleph Farms has created what it says is the first cell-grown minute steak, using its capabilities for growing different types of natural beef cells into a fully 3D structure similar to conventional meat. The cell-cultured meat space has been heating up recently, marked by a number of innovators launching cell-culture patties and meatballs. However, with its distinctive texture and complex shape, the steak remained an elusive target for innovation. According to the food-tech start-up, this breakthrough not only obtains the true texture and structure of beef muscle tissue steak but also the  Aleph Farms has created what it says is the first cell-grown minute steak.flavor and shape, establishing a new benchmark in cell-cultured meat technology.

“We’ve transformed the vision into reality by growing a steak under controlled conditions. The initial products are still relatively thin, but the technology we developed marks a true breakthrough and a great leap forward in producing a cell-grown steak,” says Didier Toubia, Co-Founder and CEO of Aleph Farms. 

Practical Innovation
Upcycling food waste creates innovative food and beverage products, according to Practical Innovation Ltd. The company calls on food and beverage manufacturers to make use of food fractions that are traditionally discarded. It and has disclosed its system of developing novel products from food waste. As food shortage is increasingly becoming an industry-wide concern, utilizing every single part of raw materials is becoming a viable option towards more sustainable practices. Practical Innovation is supporting companies in making the most of their materials. 

“Utilizing food waste can help decrease companies’ eco-footprint by reducing waste, pollution and keeping the environment cleaner but mainly by creating additional possibilities of using the food waste and turning it to food products, save waste and utilize all the elements of the food or crops,” Tal Leizer, Practical Innovation CEO, tells FoodIngredientsFirst.

Amai Proteins
Biotech company, Amai Proteins aims to disrupt the global sweetening market by offering sweet proteins that are fit for mass food production. Established at the end of 2016, Amai Proteins produces healthy sweet proteins as a sugar substitute. The sweeteners contain zero calories and have a glycemic index of zero.

“After 20 years in academia and dwelling in the topic of computational protein design, I figured out that the greatest health challenge in the world today is sugar consumption, killing more people than gunpowder. The technology of computational protein design can dramatically help this issue by taking sweet proteins and using them for the mass food market,” Amai Proteins CEO and Founder Dr. Ilan Samish told our sister site NutritionInsight at Future Food-Tech in London. 

Rising agri-food players
Vayyar Imaging, a 3D radar imaging technology expert, is using its sensing abilities to support animal, plant, and soil analysis, making it attractive to traditional investors.

Phytech stands out among a suite of smart-irrigation startups for its large rounds. Its proprietary stem-diameter variation sensors that amass crop data and facilitate decision support has drawn investment from a diverse set of corporates, such as Syngenta, Tencent and Mitsui & Co.

Daphna Nissenbaum, Founder of TipaTipa creates innovative compostable packaging technology that has created a 100 percent compostable packaging film. The start-up has raised investment from Israel’s GreenSoil and Aviv Venture Capital and China’s Horizons Ventures.  

Tipa's proprietary, patent-protected technology combines different complex blends of compostable polymers to achieve its wide range of packaging solutions. Commonly, 95 percent of flexible packaging options cannot be recycled, Tipa reports. However, Tipa’s approach has brought a fully compostable alternative to the market, including laminates and labels. 

“Today too many packaging formats like flexible packaging are simply not recyclable and have no effective/ecological end-of-life solution. While governments worldwide have begun banning or heavily restricting the usage of plastic, some counties like France, Italy and India are already making it mandatory for the industry to use only compostable packaging for certain applications,” says Daphna Nissenbaum, Founder of Tipa.

Consumer Physics and Unispectral both offer hyperspectral imaging for the detection of nutrient content and contaminants in food. Investors include the R-Group, Israel’s OurCrowd and JVP, the Samsung Catalyst Fund, among others.

GemmaCert is a start-up innovating in the increasingly popular cannabis space. The company has created cannabis analysis technology that determines the quality and potency of the plant. GemmaCert is one of a growing number of startups targeting the plant.

InnovoPro Ltd., has created a new chickpea protein concentrate coined as CP-Pro70. The product is part of a new vegan athletes ready-to-drink (RTD) formula launched in Israel, by Hadassa Bymel Pharmacy and Nature. The powdered vegan nutritional shake, under the brand name: “Pro body,” is targeting the growing market of consumers who want to maintain a healthy lifestyle by supplementing with vegan nutritionals.

“This is just the beginning of many launches in various food categories. During 2019, we expect to see more launches worldwide with our CP-Pro70 in categories such as dairy alternatives, vegan spreads and functional beverages,” says Taly Nechushtan, CEO of InnovoPro.

Flourishing in adversity seems to be an ability that Israeli start-ups have cultivated so far, with more agri-food innovations surely in the pipeline.

By Kristiana Lalou