The showcase event for The Kitchen’s portfolio companies held online in February put the spotlight on food innovation to whet investor appetite – and revealed the Israeli start-ups fundraising plans for H1
By Murielle Gonzalez
Organisers of the showcase event for portfolio companies of Israel’s The Kitchen FoodTech Hub couldn’t have come up with a better name – What’s cooking?
Held online on 18 February, the ‘Demo Day’ featured 12 early-stage start-ups with innovative technologies, the ambition to enter multimillion-dollar markets and expand in the categories they are tapping into – alternative protein, plant-based dairy, sugar reduction, novel ingredients, and snacks.
The Kitchen has become one of Israel’s leading foodtech hub, and it’s not surprising to see the calibre of companies under its wing.
Israeli food giant Strauss Group established the organisation as a seed investment and technology incubator with a focus on foodtech in 2015, backed by government funding through the Israeli Innovation Incubator programme.
It has made 14 investments to date, including three in the past 12 months – egg substitute producer Zero Egg; snacks manufacturing innovator Torr Foodtech; and sugar reduction company Amai Proteins.
What’s cooking? put the spotlight on founders and chief executives who delivered their elevator pitch in under five minutes. Three of them revealed they are gearing up for raising capital in the coming months – sugar reduction company Better Juice, natural flavour maker Vanilla Vida, and precision fermentation company Imagindairy.
Plant-based meat producer Rilbite and Torr are setting up manufacturing facilities to begin sales at home and in the US this year. And there was Anina, a ready-meal company with a wow factor. The company offers ‘culinary art’ thought its microwave capsules, which are visually appealing, nutrient-dense, and cooked in minutes.
NutritionInvestor takes a closer look at the companies in fundraising mode.
Imagindairy: Series A round imminent
Eyal Afergan teamed up with Professor Tamir Tuller of Tel Aviv University and founded Imagindairy in November last year. The company uses precision fermentation to produce milk proteins – and has developed a unique Aplatform to optimise the process to bring production costs down.
The platform combines biology with AI-driven technology and computer modelling to increase the expression of milk proteins in microflora.
“We are creating real dairy product without the cows,” said Afergan, noting products offer the same familiar experience of traditional dairy product but with superior health and environmental benefits.
Afergan explained that all the start-ups utilising precision fermentation in the alternative milk space face the same challenge – scale-up, process formulation, and consumer acceptance – and argued that the biggest challenge is to get products at the right price. He said all these bottlenecks can be solved with Imagindairy’s patented technology.
“Our technology, protected by three patent families, has proved to increase protein production yield by up to 200 times compared with existing technologies,” he said.
Speaking with NutritionInvestor, Afergan explained that Imagindairy’s technology uses a specific kind of microflora that is optimised to produce maximal protein expression. Once the target protein is obtained, Imaginadairy is able to produce protein powder, whey and casein powder or offer the market a finished packed product, such as milk and cheese.
Imagindairy closed a seed funding round in November with the backing of The Kitchen, Israel’s Innovation Authority and three venture capital firms, one of which is Entrée Capital. Afergan revealed Imagindairy is in talks with investors for its Series A funding round.
Vanilla Vida: Funding round scheduled for Q2
Oren Zilberman founded Vanilla Vida in November 2019, leaving behind a career in venture capital. He started the company to produce natural vanilla efficiently and sustainably.
“Vanilla is the most popular taste and aroma,” he said, noting that while demand for natural products is on the rise, 94% of vanilla used in food and drink products is a synthetic substitute, mostly made from chemicals derived from oil. And the taste is ‘flatter’ compared with the natural product.
“We need to understand that growing vanilla is very difficult,” said Zilberman. “It’s grown in tropical environments, it’s very labour intensive and requires a long drying process [of between four-to-six months]. There are poor quality control standards, and the sector is affected by climate change – hurricanes can destroy the entire industry,” he noted.
Vanilla Vida enters the market to solve these challenges. The company uses advanced technologies to transform the traditional way vanilla is grown and cured, turning it into a smart and fully controlled commercial production operation.
Zilberman explained: “We grow our own vanilla in smart farming greenhouses. We develop our own [protocols] and metabolic manipulation to increase aroma and still keep the product 100% natural.”
Vanilla Vida uses a smart drying room, which allows the company to produce the best product in the market, Zilberman claimed. He noted the company’s technology and novel production approach is combined with a data-driven solution.
“We produce 10 times more vanilla per square foot and 100% more aroma and flavour compared to our competitors,” said Zilberman. “Our growth cycle is shorter by 20%, and the curing process is 85% shorter than the traditional method. And on top of everything that I mentioned, our production costs are still not more than $25 to $50 per kilo.”
Speaking with NutritionInvestor, Zilberman explained that the cost of growing vanilla in traditional countries like Uganda, Tanzania and India is between $60 to $80 per kg.
The company uses non-GMO methods to alter the metabolism of vanilla beans in ways that it says dramatically increases flavour levels. Vanilla Vida also applies image processing technology for disease detection, quality control and plant behaviour pattern identification. “The more we grow, the more data we collect for optimisation,” the company claims.
Zilberman argued that global demand for vanilla is a $3 billion market, but production capacity only delivers $1.6 billion. “Vanilla Vida is focusing on this gap in the first stage and on allowing the world to consume more natural ingredients.”
2020 was a fertile period for Vanilla Vida. The company raised $1.2 million in funding, finished a prototype and filed the metabolic manipulation patent.
The plan for this year is to build a production facility and begin a pilot programme with a customer in the US and Europe.
Better Juice: Series A in the works
Chief executive Eran Blachinsky founded Better Juice in 2018 to tackle obesity and diabetes by reducing the sugar content in natural sources – juice, honey, maple syrup, and even milk.
Three years earlier, the World Health Organization had issued guidelines to reduce sugar intake from adults and children, noting juice was one of the sugary products to cut down – orange juice typically contains 8 grams of sugar in 100 ml, for example.
The company has developed a unique bioconversion process. The system converts sucrose to dietary fibres FOS, short for fructose oligosaccharide. The technology also converts glucose to gluconic acid and fructose to sorbitol. Better Juice claims that its patented technology can reach up to 80% sugar reduction.
Gali Yarom, Better Juice co-founder, chief operating officer and vice-president of business development, argued the company is playing in a huge market, noting the fructose juice alone is worth $100 billion while the ingredients market is $500 billion.
“Our business model is like a printer and ink,” said Yarom. She explained that the company produces the immobilised enzyme with a shelf life of two months. The company fills the bioreactor with the immobilised enzyme – and the bioreactor is integrated into the factory line.
Better Juice has teamed up with equipment manufacturer GEA for the supply of the bioreactor. “Now we are raising funds, looking for $4 million, which will enable us to start real sales,” she added.
Blachinsky pointed out that the technology is patented and that Better Juice already has customers, including juice cooperatives and strategic partners like GEA.
Better Juice has validated its technology in semi-industrial pilots for half a year, reducing orange and apple juice sugars.
Date published: 2 March 2021