The amount of money going into food tech startups worldwide in 2021 was reportedly $39.3 billion. While the world of Silicon Valley and wealthy tech bros like Elon Musk often provokes side-eye in people working for sustainable food systems, it is important to know what companies funded by venture capitalists are doing to market, make, and distribute the food we eat. Dr. A. Breeze Harper writes that keeping up with a food tech news outlet offers her “a comprehensive—though unintentional—map that shows me the ‘gaps’ in systemic justice and how neoliberalism works.”
According to a Dealroom.co report, over the first few months of 2022 food delivery was the type of food tech company receiving the most investments from venture capitalists by far, at $4.6 billion. Online supermarkets were second at $1.5 billion during the same period, followed by alternative protein ($1.1 billion), and cloud kitchens ($0.9 billion).
What Is a Food Tech Startup?
The term “food tech startup“ usually refers to a young, unconventional business in the food industry that uses tools in new ways to change how food systems work. At The Spoon, food tech refers to “companies we think are doing the most interesting things changing the way we create, buy, store, cook and think about food.” The companies are typically located in distribution and retail, where goods and services are packaged and sold to make profits.
A startup is a company in the first stages of operations. Startups tend to be founded by individuals or small groups of people, who then seek money to fund their work, without a promise of immediate revenue. The exciting part of startups is that the people running them typically offer unique products and value innovation. Running a startup usually implies the involvement of investors taking high-stakes risks.
There are enough food tech startups to be able to segment them into groups. For example, market analysts who work for Pitchbook categorize food tech companies into five buckets: bio-engineered foods (such as alternative proteins and meal replacements), food suppliers (such as online grocers, ghost kitchens, and meal kits), food delivery platforms (delivery robots and apps and marketplaces), industrial and consumer tech (food waste and traceability, and kitchen tech and robotics), and discovery and review (including restaurant recommendations and review, personalized nutrition, and kitchen enablement and software).
25 Big Food Tech Startups in Online Groceries
How companies are grouped depends on who is making the list. A Dealroom.co list of online groceries omits some of the companies featured in Pitchbook’s ecosystem overview on grocery startups in food tech. Dealroom.co presents an overview of online grocers that includes additional categories like warehouse automation, meal kits, last-mile logistics, and restaurant kits, along with others listed below.
Worldwide, according to Dealroom.co, the total market for online grocery is about $2.1 trillion, compared to $0.6 trillion for restaurant food delivery. What had been seen as a luxury or convenience item before 2020 became more urgently required as people throughout the world sought to avoid crowded spaces during the still-ongoing COVID-19 pandemic.
Dealroom.co reports that in the last few months venture capitalists have retreated from funding online supermarkets and have instead favored pet food startups. While pet food came in at 11th out of 11 places in the first quarter of 2022, at $0.1 billion, the category saw the greatest increase in comparison to the previous year’s first-quarter investments. It may just be that after spending lots of time at home with companion animals during the pandemic, in part due to outsourcing their grocery trips to delivery apps, venture capitalists have started paying closer attention to the quality of their pets’ food.
The following list is made up of online grocery startups that were featured in Pitchbook’s 2021 Annual Foodtech Report and includes how they are categorized in Dealbook.co’s overview of the online groceries landscape.
1. Xingsheng Youxuan
Gopuff is an online grocery retailer.
Instacart is a personal shopping service.
Gorillas offers 10-minute delivery.
5. Nice Tuan
Pupumall is an online grocery retailer.
Picnic is an online grocery retailer.
Flink offers 10-minute delivery.
Getir is a 10-minute delivery service that was omitted from Dealroom.co’s overview.
10. El Super
El Super is a grocery retail marketplace that was omitted from Dealroom.co’s overview.
Oda is an online grocery retailer.
Blinkit is an online grocery retailer.
13. Misfits Market
Misfits Market is a farm-to-table/fresh food startup.
GrubMarket is a farm-to-table/fresh food startup.
Weee! is a community shopping startup.
Benlai.com is a marketplace and e-commerce platform that was omitted from Dealroom.co’s overview.
Zapp is a 10-minute delivery service.
Jokr offers 10-minute deliveries.
19. Good Eggs
Good Eggs is a farm-to-table/fresh food startup.
20. Imperfect Foods
Imperfect Foods, is a farm-to-table/fresh food startup.
21. Thrive Market
Thrive Market is a marketplace and e-commerce platform that was omitted from Dealroom.co’s overview.
Frubana is a marketplace and e-commerce platform that was omitted from Dealroom.co’s overview.
Foxtrot is a personal shopper startup.
Zepto is a 10-minute delivery startup.
Goldbelly is a marketplace and e-commerce platform that was omitted from Dealroom.co’s overview.
How to Start a Food Tech Startup
In a blog post for MassChallenge, Robbie Richards outlines seven steps that innovative entrepreneurs can take when trying to start a tech company. MassChallenge is a nonprofit organization that specializes in helping startups succeed. Startups that work with MassChallenge undergo a four-month period of curriculum, mentorship, and exhibition events to help them grow, get funding, and collaborate with others.
The following steps are meant for people who have already developed prototypes, or a basic idea for a product, and who have at least one other co-founder with whom they are working.
Build an MVP the Market Wants
MVP stands for a minimum viable product. Developing a product that fits your own personal needs is a good start, but you can also get feedback from others to make sure that your product has a “minimum set of features” to help users meet a specific goal. Richard offers key questions to help you define your users and how your product meets their needs: what is the overall idea, who are the customers, who are the end-users, why would they want it, and why are you building it?
Validate the App With Early Adopters
Richards writes that it’s important to start serving a “small, highly-targeted segment of your market to buy into the idea,” which can help you get immediate cash and expand the product to different types of users later. These customers, your early adopters, can help you develop the product by being able to give you feedback on what features are needed. Sales to early adopters also serve to validate the concept you are developing.
Iterate to Meet Product-Market Fit
Make changes quickly based on how people using your product are behaving: do they return to use it, for long periods of time, and do they report that they are satisfied with it? If there is something that does not seem to be working despite your best efforts, listen to the data you’re getting and change course. This may mean abandoning a hard-won feature or campaign.
Build a Skilled and Unified Founding Team
Richards recommends trying to do as much work with people using as little money as possible. He recommends equity, or payment-in-kind, as the basis of the compensation offer you make when recruiting a co-founder.
Get the Funding You Need to Grow
Once you’re ready to seek out funding, some common sources of finance for early-stage startups include crowdfunding, accelerators, and angel investors. Popular crowdfunding services include Kickstarter and IndieGogo. Angel investors are typically individuals who have worked as startup founders themselves and have “tons of cash” to invest in companies, often giving around $150,000 and looking for companies that are valued at about $3 million, according to Richards.
Develop and Practice an Agile Methodology
In the software developer community, “agile methodology” is a way to do work that fosters nonhierarchical collaboration and responds quickly to rapidly changing requirements. Richards promotes tenets of this practice such as working in two-week increments, and evaluating work at the end of each “sprint.” Evaluations encourage group members to discuss what worked well and what went wrong, in order to create a culture of constant improvement and learning.
Generate Funding and Scale Team
It’s best to have a great “product-market fit,” early adopters, and a practice of quickly adapting the product to meet user needs before going big on your market outreach, writes Richards.
Food Tech Ideas
There is much inspiration to be gained from food tech entrepreneurs around the world, especially as so many have social impact goals as part of their missions. The following companies and their founders are leading the way in heeding the perspectives of Black communities and low-income families.
- Journey Foods uses AI and software to help problems with nutrition, broken supply chains, and data management across the food system according to its website and Black Women in Food. CEO and Founder Riana Lynn heads the company, which has raised $5 million from investors. Lynn is partnering with historically Black colleges and universities to increase Black researchers’ access to data and data transparency for a more sustainable food system.
- Bento, led by Adam Dole and featured in Yes! Magazine, helps health insurance companies and community organizations connect food-insecure families with nutritious food from local restaurants and stores via text message.
- Algramo, established in 2013 by Chilean engineer José Manuel Moller, offers mobile vending machines to sell low-cost staple foods in poorer neighborhoods. According to Fortune’s Impact 20 report, “The dispensers offer bulk purchasing, with reusable containers that enable consumers to buy exactly the amount they want.” Learn more about Moller’s approach to social impact work on his Ashoka Fellow page.
Why Are Tech Startups Switching to Become Food Manufacturers?
Alternative protein is one of the largest sectors in the food tech market and is often seen as part of a more climate-friendly and animal-friendly food system, though much of this support remains speculative. Air Protein, led by Dr. Lisa Dyson, was featured by both Vegan Women Summit and Black Women in Food for its science-based approach to making animal-free protein.
What You Can Do
One thing you can do is to think critically about the latest inventions in food technology, whether that is a robot waiter, a super fast delivery service, a ghost kitchen, or a delicious meat-like vegan protein. Consider the following questions derived from Dr. A. Breeze Harper’s “Questions for foodie-tech companies.”
- How does this startup commit to creating a food system that seeks to dismantle systemic racism, whiteness, and poverty?
- How does this startup create transparency or conversations around the racism, xenophobia, and sexism currently build into the food system?
- How does this startup support a living wage for food workers?
- How does the startup use land at the expense of the working class and communities of color?
- How does this startup work to undo racial and gender power dynamics that restaurant workers must endure in their daily work?
- How does this startup counteract the Prison Industrial Complex, in which Black and Brown people are incarcerated en masse and coerced into near-enslavement to produce food commodities?
Finally, look for startups that are checking their privileges and using them to undo the oppressive practices that are rampant in the food industry.
Hemi is a writer, educator, and founder of Learning with Donkeys.