Invest With Purpose

Invest with Purpose:

This crisis presents us with an opportunity to build a more resilient society and transform our food system by investing with purpose. At Sibo we are aiming to change the current reality of the food industry, but to tell you why that is important please continue reading this blog written by AgFunder.

Obvious Ventures Pushes Silicon Valley to Invest With Purpose - Karma

The coronavirus pandemic has exposed years of underinvestment in innovation in our food and agriculture system. Archaic supply chains have forced farmers to plow over their fields while millions of people stand in food lines. Farms and factories without automation are closing as workers get sick. And the UN has suggested that 250M people could be pushed to the brink of starvation by year’s end.

This crisis presents us with an opportunity to build a more resilient society by investing in the vanguard of emerging foodtech & agtech startups that can transform our food system in a post-COVID world. It’s time to demand a more visionary future.

The day-to-day of agri-foodtech invesing is changing

  • Until a few months ago, many VCs would’ve told you that they’d never make an investment decision without having face-to-face meetings. But Covid-19 is changing that.
  • “I think there’s a new normal,” said Krishnan, listing the changes in workplace practices brought on by the pandemic. “Guest policy, who comes to visit us [at the office], how we do due diligence, who flies, board meetings – there is going to be a whole reset and I don’t know if it goes back to normal as we knew it.”
  • For AgFunder, which was originally envisioned as an ‘online VC firm,’ some of this is par for the course. “We’re pretty digitally native – maybe 20% of our investments we’ve already done over Zoom calls,” said Leclerc. Even so, some investing activities that would previously have necessitated a physical presence are having to move online. “We livestreamed a diligence call with a robotics startup in Florida, [and we were] looking at all the parts of the robot over the call. It was very surreal,” he said.

Pandemics as innovation catalysts

  • S2G decided to conduct its research to understand the “mental model” of how the pandemic pans out in economic terms, said Krishnan. “People were talking about ’08-’09, 9/11, World War II – but none of those really fit in our view. So we tried to look at the economic history of pandemics: what were the changes in markets, governance, consumer behavior, and so on.”
  • The S2G team found that there were differences with each pandemic episode in terms of time to recovery and economic costs. But there were some common themes: “Unemployment, market behavior, but also how innovation took hold – almost all of these [pandemics] had an innovation cycle that followed […] and generally, consumer preferences [tended] to change,” Krishnan said. “Food and ag is recession-proof and, I think, pandemic proof.”
  • “When we looked at innovation cycles associated with pandemics, we saw it all the way back in 1918 [the Spanish Flu pandemic] was a catalyst for adoption of modern medicine, the telephone,” Ripma said. “And SARS in 2003 is credited as a catalyst for Alibaba to become a real player in shifting consumer behavior from purchasing in-store to shopping online.”
  • Prior to the current pandemic – which is suspected of having its origin in the food supply chain – tech has had “difficulty in moving from the purely digital world of bits to the analog world,” said Leclerc. “But I think we’re going to get a lot of peace dividends from this because tech really does need to interface with the analog world. I think biotech will be a big beneficiary as another example.”

Where to innovate

  • Indoor agriculture can bring stability to the supply chain through decentralized production, automation, and integration of systems. It also enables year-round availability of certain crops and less dependence on imports for food and fertilizer. A “contactless” food chain is made possible through the use of automation, from planting to harvesting to packaging.
  • Alternative protein innovation could get a boost from the pandemic. “There’s an asymmetrical relationship between just-in-time inventory that groceries rely on” as well as the “long-cycle production for animal meat, where it takes months and years to produce,” Ripma said. Centralized meat processing also presents pathogen risks, further indicating that the Covid-19 crisis is a potential catalyst for innovation in cellular protein, plant-based protein, algae, fungus, and other biomass concepts.
  • The labor shortages that have ensued as a result of lockdown measures present an innovation opportunity in areas such as robotics, drones, and sensor technology.
  • In terms of the post-Covid supply chain, expect food distribution to become more agile, traceable, and personalized. Areas such as grocery delivery, food waste reduction, shelf life extension, traceability and transparency, and micro-fulfillment are ripe for further disruption.
  • ‘Food as medicine’ will be a key theme going forward. Several of the most at-risk populations for Covid-19 have nutrition-related medical conditions such diabetes, obesity, or cardiovascular disease. Microbiome, personalized medicine, and functional ingredients are prime areas for tech innovation here.

How we do it at Sibo?

  • By creating an ethical supply chain: Our production process right from the start of the farming at our Agritech division CRIC we ensure a production with transparency and empathy working side by side with the most vulnerable sectors of Costa Rican society (and with your help even more countries to be involved). But also by establishing traceability and food safety on every single part of the process, making sure each step adds value. All the parts of the value chain must be aligned with our purpose and with the SDGs, from the digital providers to the logistics. We are not perfect but we are aiming to improve and adapt.
  • By Creating alternative protein: our insect protein is not only sustainable but it is also scalable and has a better quality than many of the other alternatives, and it is already here. We are currently working on a protein extract that would change the way of consumption and we believe this will change the game towards insect protein sources.
  • By partnering with other actors: We aim every day to collaborate with other food tech startups, food corporations, governments, NGOs and even farmers. To create a new food industry, more resilient, more healthy and more sustainable, collaboration is the only way. So far this has allow us to keep focusing on innovation and delivering our unexpected innovations to more and more people.
  • By creating healthy and sustainable products: Our biomaterials have the purpose of changing the base of food production and reducing the usage of plastics in the food packaging. This way we believe we can tackle malnutrition, future food scarcity, climate change and speed up the alignment to the Sustainable Development Goals.

Want to know more about how you can invest with purpose ?

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