We are in a “new normal” for agrifood tech funding. Investment in the nutrition biotech and agtech space shot up more than 1200 percent between 2014 and 2017, with a strong surge in investment volume in the past year alone (29%), despite a significant drop in the number of total deals.

This has shaped a landscape where seed funding is more difficult to come by, but massive rounds seem to be making headlines daily.

(We’re grateful for all of those who see the future the way we do and are helping to support food-system innovators!)

If Q1 is at all representative of the future, the increase in funds dedicated to food innovation is set to continue. At New Crop Capital, we’re particularly interested in the deals with an impact on the future of animal agriculture and protein production.

With the rise of plant-based replacements for conventionally produced animal products and the impending market entry of clean meat (animal meat without slaughter), we see major disruption ahead.

image credit: Laura Zaim

A report released in February by FAIRR, an investor coalition representing more than $4T in assets, echoed our feelings, calling for companies to de-risk by diversifying into alternative proteins and preparing themselves for the market entry of clean meat.

FAIRR identified four key drivers leading markets away from factory farming and toward better alternatives:

Growing market opportunity to meet demand for plant-based foods Accelerated innovation in food technology Increasing awareness of ESG impacts linked to intensive livestock production Advocacy and regulation to moderate growth in the animal protein sector

Here’s what this actually looked like in Q1, in terms of…

…Investments

Cow-free dairy company Perfect Day Foods raked in a $24.7M Series A led by Singapore state-owned investment firm Temasek. Perfect Day also secured its first patent to produce dairy recombinantly (i.e., by using microbes to ferment out dairy proteins, instead of impregnating cows to produce milk).

Tyson joined Cargill, Bill Gates, DFJ, Richard Branson (and New Crop Capital) in investing in Bay Area clean meat startup Memphis Meats, which has a multi-species platform to grow animal meat from cells — removing the risks, inefficiencies, and ethical quandaries inherent in breeding, feeding, and processing an entire animal.

Sorry Elon. Memphis Meats wins the “hottest tech” prize.

PHW-Gruppe, one of Europe’s largest poultry producers, joined New Crop Capital in a $3M seed round for Israeli clean meat startup SuperMeat.

Pea-protein milk startup Ripple Foods Inc. raised $65M from Euclidean, Goldman Sachs, Khosla, Fall Line, and S2G.

…Fund Activity

Kraft Heinz launched Springboard Brands, a VC arm designed to keep up with the rapid pace of food innovation. In addition to seeking new external opportunities for accelerating and investing in startups, Springboard has already evaluated its in-house brands for reinvention and tapped the plant-based Boca burger as its first project.

Anterra Capital became the largest single dedicated agtech fund in the world by extending its first fund to $200M.

…Launches

In its fastest nationwide launch ever, TGI Fridays rolled out the Beyond Burger in all U.S. locations

Beyond Meat then launched a sausage product which is now being sold in retail and foodservice nationwide (and in Yankee stadium)