“A new wave for sustainability and technology”: ScaleUpFood launch aims to ignite Dutch agri-food innovation sector

26 Jul 2019 --- In the Netherlands, Rabobank, ScaleUpNation and Foodvalley are launching ScaleUpFood, a comprehensive support program dedicated to scaling entrepreneurial ventures in food and agriculture. The invite-only program targets Dutch upstream scale-up businesses – agritech, agribiotech and novel food – with the offer of providing guidance in specific areas such as strategic selling, specialized finance and data-driven business model extensions. Following the program, qualified ventures will be invited for longer-term tailored support, collaboration opportunities and access to series-B level funding.

“Regarding the scale-ups, we are looking for promising propositions with clear commercial traction. This means some recurring revenues, 10 or more employees and completion of their first fundraising [Series A],” Jeroen Leffelaar, Managing Director of Food & Agri Innovation at Rabobank, tells FoodIngredientsFirst. “In the case of participating corporates, we are looking for those with a clear interest in innovation and sharing best practises with the scale-ups. This could result in some joint pilot projects,” he explains.

To create real impact, it is critical that ventures are able to make it to the scale-up phase, notes Annie Chen, Business Developer at ScaleUpNation. “For this we rely on a healthy food and agriculture (F&A) start-up research, incubation and acceleration ecosystem, so we are eager to work with initiatives like StartLife, BOX, Foodvalley Accelerator and more here in the Netherlands, and in the future with international partners,” she says. 

“Upstream F&A scale-ups can unlock major growth by collaborating with innovative corporates, another reason that working with Rabobank can unlock some real business results for the scale-ups,” adds Chen. “We aim to make our research available via creative commons to the whole ecosystem, and we’re eager to see what types of partnerships and collaborations we can trigger in the space.”

ScaleUpFood offers guidance in specific areas such as strategic selling, specialized finance and data-driven business model extensions.The future of EU scale-up investment is “far from guaranteed”
Though the Netherlands has historically been a center of food innovation, future growth is “far from guaranteed” – investment in innovative early-stage companies lags behind other countries and too few young, promising food and agri companies manage to achieve scale, notes Roger van Hoesel, Director of Foodvalley. 

“In food and agriculture, the Netherlands has always been scale-up country, which is testimony to our position of the second largest food exporter in the world. But many products have commoditized. This partnership will create a new wave of food and agri scale-ups focused on technology and sustainability.”

The market for Series B and beyond is gradually developing in Europe, but lags behind the US, highlights Leffelaar. The Netherlands, in particular, is lacking in access to sufficient scale-up capital.

Research by ScaleUpNation shows that less than 1 percent of early stage companies make it to US$10 million annual revenues within five years. Scaling can be even more challenging in food and agriculture, notes the initiative. The agrifood sector differs from others with respect to innovation speed and implementation due to growing seasons, long sales cycles, conservative customers and complicated regulation.

“Climate change, global population size and waste – are all opportunities for innovative, technology-driven enterprises throughout the value chain,” says Menno van Dijk, Founder of ScaleUpNation. “Though many start-ups are launching and exist for some years, only those that scale will move the needle in terms of impact and economic value creation.” 

“We are excited about the ventures we're inviting to the first class, particularly in the areas of alternative proteins (from algae, grass, insects and much more), novel food ingredients that naturally add tremendous health benefits to food we eat today, diagnostic and testing tools to ensure animal welfare and safe food, and agricultural technologies that improve yield and reduce waste without harmful impact to the environment,” adds Chen.

Hope on the agri-food horizonEuropean food tech and agri-tech start-ups last year reportedly raised US$1.6 billion in funding across 421 deals.
Leffelaar expects the landscape of agri-food innovation to improve in the coming years. “There are more and more interesting propositions to digitize agriculture to increase yields, improve sustainability and soil by replacing for example chemicals in pesticides,” he notes. “Waste reduction is another item. Shelf life extension and more sustainable packaging are also key themes in food. But the industry is conservative, known for strict regulation and the impact of mother nature, so innovation tends to be a bit slower than in other industries like tech.”

European food tech and agri-tech start-ups last year reportedly raised US$1.6 billion in funding across 421 deals, according to the inaugural report from global Venture Capital platform AgFunder, in collaboration with Rabobank-funded F&A Next.

And Rabobank is sustaining its current investments in similar sector programs. The bank has launched FoodBytes!, an international pitching platform for promising start-ups giving them access to investors and corporations. Similarly, it unveiled TERRA, an incubator for innovative corporations in food and agriculture that are keen to pilot with early-stage businesses to improve their proposition. 

The role of start-ups in shaping the future of the food and agriculture industry is significant. Market researcher Innova Market Insights’ 2019 Trends Report notes that small players, such as the listed start-ups, are increasingly shaking up the industry by taking on the classic FMCG giants in an increasingly high–tech arena. The market researcher highlights this “golden age of creativity” as driven by growing demand for ethically-produced, sustainably sourced and environmentally-conscious food products.

By Benjamin Ferrer