Congruent Ventures, the early stage investment firm focused on technologies and services designed to avert the current climate emergency, has raised $175 million in financing for its latest fund.
The firm, which now has $300 million in assets under management, is focused on investing in pre-seed, seed and Series A rounds and was founded by Abe Yokell and Joshua Posamentier, two longtime investors in the climate space with over twenty years of experience investing in the sector.
“With the dawn of a new administration dedicated to infrastructure [and] climate and a long-overdue influx of capital towards pressing global issues surrounding climate change, we cover the gamut with a portfolio of over three dozen companies working in transportation, energy transition, food and agriculture to sustainable production and consumption,” Yokell wrote in an email.
Companies in the portfolio include the mycelium meat producer Meati; Milk Run, a farm to table food marketplace; PicoMES, which develops software for efficient manufacturing; Parallel Systems, a developer of electrified, autonomous rail cars; Alloy Enterprises, which is an additive manufacturer for aluminum; Hippo Harvest, which provides autonomous greenhouse growing systems; and Amp Robotics, a provider of recycling robots to improve efficiencies among hard-pressed waste recycling organizations.
The firm counts some high profile limited partners like Microsoft’s Climate Innovation Fund, affiliates of Prelude Ventures; the Jeremy and Hannelore Grantham Environmental Turst and Surdna Foundation, along with UC Investments.
“Until very recently, there was a total dearth of early-stage capital focused on climate and sustainability,” said Joshua Posamentier, managing partner and co-founder, Congruent Ventures. “We invest at the earliest stages where we can help entrepreneurs avoid a myriad of pitfalls, help them build strong companies, raise additional capital, and as a result, tackle the world’s most pressing environmental problems in some of the world’s largest sectors.”
One third of Congruent’s companies are working directly with energy or civil infrastructure and could stand to gain tremendously from any infrastructure spending bill that could come from Washington. Beyond that, the firm’s limited partners include infrastructure investors with over $700 billion of assets under management that are all potential customers for the technologies developed by the firm’s portfolio companies, the firm said in a statement.
A clutch of the world’s largest consumer products and food companies are joining Budweiser’s parent company Anheuser-Busch InBev in backing an investment program to support early stage companies focused on making supply chains more sustainable.
The Earth Day-timed announcement comes as companies and consumers confront the failure of recycling programs to adequately address the problems associated with plastic waste — and broader issues around the contributions of consumer behavior and industrial production and distribution to the current climate emergency.
The AB InBev program, called the 100+ Accelerator, launched in 2018 with the goal to solve supply chain challenges in water stewardship, the circular economy, sustainable agriculture and climate action, the company said. These are problems that the alcohol manufacturer’s new partners — Colgate-Palmolive; Coca-Cola; and Unilever are also intimately familiar with.
Since the launch of the accelerator and investment program, AB InBev has backed 36 companies in 16 countries, according to a statement. Those startups have gone on to raise more than $200 million in follow on financing.
The accelerator program creates funding for pilot programs and offers opportunities for early stage companies to consult with executive management at the world’s top consumer brands.
Since the program’s launch, AB InBev has worked with startups to pilot returnable packaging programs; implement new cleaning technologies to reduce water and energy use in Colombian brewing operations; provide insurance to small farms in Africa and South America; collect more waste in Brazil; recycle electric vehicle batteries in China; and upcycle grains waste from the brewing process to create new, nutrient rich food sources.
As pressures from outside investors and regulators mount, companies are beginning to shift their attention to focus on ways to make their industrial processes more sustainable.
These kinds of collaborative initiatives among major corporations, which are long overdue, have the potential to make a significant contribution to reducing the environmental footprint of business, but it depends on the depth of the commitment and the speed at which these businesses are willing to deploy solutions beyond a few small pilot programs.
Applications for the latest cohort will be due by May 31, 2021.
Corporations are quickly waking up to the market potential of alternative proteins with the nation’s biggest consumer brands continuing to make investments and create partnerships with startup companies helping consumers transition to healthier and more environmentally sustainable diets.
As Earth Week draws to a close (thankfully) new partnerships announced over the past week show the potential for new technologies to transform old businesses.
Yesterday the New York-based ZX Ventures, the investment and innovation arm of AB InBev, said that it would be partnering with Clara Foods, a developer of protein production technologies including (but not limited to), brewing egg substitutes. That’s right, the makers of Budweiser are hatching a scheme to make other kinds of liquids that are less potable and more poachable.
In that case, the yolk would definitely be on you, future consumer.
“Since day one, Clara has been on a mission to accelerate the world’s transition to animal-free protein, starting with the egg. More than one trillion eggs are consumed globally every year and corporate commitments for cage-free aren’t enough,” said Arturo Elizondo, the chief executive and co-founder of Clara Foods. “We’re thrilled to be partnering with the world’s largest fermentation company to work together to enable a kinder, greener, and more delicious future. This partnership is a major step towards realizing our vision.”
Graph showing the increasing size of investments into alternative proteins in 2020. From 2019 to 2020 investments in alternative proteins soared from just over $1 billion to $3 billion led by investments in plant protein products. Image Credit: Good Food Institute
There are market-driven reasons for the partnership. Demand for high quality proteins is expected to jump up to 98% by 2050, according to research cited by the two companies.
“Meeting the increased demand for food requires breakthrough solutions built on collaboration and innovation that spans several industry domains – both old and new. The ancient and natural process of fermentation can be further harnessed to help meet future demands in our global food system,” said Patrick O’Riordan, founder & CEO at BioBrew, ZX Ventures’ new business line trying to apply large-scale fermentation and downstream processing expertise beyond beer. “We look forward to exploring the development of highly-functional, animal-free egg proteins with Clara Foods in a scalable, sustainable and economically viable manner.”
Formed from the same Seventh Day Adventist focus on plant-based diet and health as a core of spirituality that launched the Kellogg’s cereal empire, Post has long been a rival to the corn flake king with its grape nuts cereal and other grain-based breakfast offerings.
Now the company has led a $25 million investment in Hungry Planet, which aims to provide meat-based replacements for crab cakes, lamb burgers, chicken, pork, and beef. Additional investors included the Singapore-based environmentally sustainable holding company, Trirec.
Alternative proteins are a big business. Last year, companies developing technologies and businesses to commercialize alternative sources of protein raised over $3 billion, according to the industry tracker, the Good Food Institute.
“Over the past year, the alternative protein industry has demonstrated not only resilience but acceleration, raising significantly more investment capital in 2020 than in prior years,” said GFI director of corporate engagement Caroline Bushnell, in a statement. “These capital infusions and the funding still to come will facilitate much-needed R&D and capacity building to enable these companies to scale and reach more consumers with delicious, affordable, and accessible alternative protein products.”
It’s all part of a push to provide more plant-based alternatives to animal proteins in a bid to halt planetary deforestation and reduce the greenhouse gas emissions associated with animal husbandry.
“Humanity needs solutions that match the scale and urgency of our problems,” said Elizondo. “
Ocado, the UK online grocer that has been making strides reselling its technology to other grocery companies to help them build and run their own online ordering-and-delivery operations, is making an investment today into what it believes will be the next chapter of how that business will grow: it is taking a £10 million ($13.8 million) stake in Oxbotica, a UK startup that develops autonomous driving systems.
Ocado is treating this as a strategic investment to develop AI-powered, self-driving systems that will work across its operations, from vehicles within and around its packing warehouses through to the last-mile vehicles that deliver grocery orders to people’s homes. It says it expects the first products to come out of this deal — most likely in closed environments like warehouses rather the less structured prospect of open streets — to be online in two years.
“We are not constraining ourselves to work in any one use case,” said Alex Harvey, chief of advanced technology at Ocado, in an interview. But to roll out auotonomous systems everwhere, he added, “we realize there are areas where we will need regulatory compliance,” among other factors. The deal is non-exclusive, and both can work with other partners if they choose, the companies confirmed.
The investment is coming as an extension to Oxbotica’s Series B that it announced in January, bringing the total size of the round — which was led by bp ventures, the investing arm of oil and gas giant bp, and also included BGF, safety equipment maker Halma, pension fund HostPlus, IP Group, Tencent, Venture Science and funds advised by Doxa Partners — to over $60 million. Oxbotica has not disclosed valuation but Paul Newman, co-founder and CTO of Oxbotica, confirmed in an interview that the valuation went up with this latest investment.
The timing of the news is very interesting. It comes just one day (less than 24 hours in fact) after Walmart in the US took a stake in Cruise, another autonomous tech company, as part of recent $2.75B monster round.
Walmart, until February, owned one of Ocado’s big competitors in the UK, ASDA; and Ocado has made its first forays into the US, by way of its deal to power Kroger’s online grocery business, which went live this week, too. So it seems that competition between these two is heating up on the food front.
More generally, there has been a huge surge in the world of online grocery order and delivery services in the last year. Earlier movers like online-only Ocado, Tesco in the UK (which owns both physical stores and online networks), and Instacart in the US have seen record demand, but they have also been joined by a lot of competition from well-capitalized newer entrants also keen to seize that opportunity, and bringing different approaches (next-hour delivery, smaller baskets, specific products) to do so.
In Ocado’s home patch of Europe, other big names looking to extend outside of their home turfs include Oda (formerly Kolonial); Rohlik out of the Czech Republic (which in March bagged $230 million in funding); Everli out of Italy (formerly called Supermercato24, it raised $100 million); Picnic out of the Netherlands (which has yet to announce any recent funding but it feels like it’s only a matter of time given it too has publicly laid out international ambitions). Even Ocado has raised huge amounts of money to pursue its own international ambitions. And that’s before you consider the nearly dozens of next-hour, smaller bag grocery delivery plays.
A lot of these companies will have had a big year last year, not least because of the pandemic and how it drove many people to stay at home, and stay away from places where they might catch and spread the Covid-19 virus.
But now, the big question will be how that market will look in the future as peoples go back to “normal” life.
As we pointed out earlier this week, Ocado has already laid out how demand is lower, although still higher than pre-pandemic times. And indeed, the new-new normal (if we can call it that) may well see the competitive landscape tighten some more.
That could also be one reason why companies like Ocado are putting more money into working on what might be the next generation of services: one more efficient and run purely (or at least mostly) on technology.
The rationale of forking out big for autonomous tech, which is still largely untested and very, very expensive technology, to save money is a long-term play. Logistics today accounts for some 10% of the total cost of a grocery delivery operation. But that figure goes up when there is peak demand or anything that disrupts regularly scheduled services.
My guess is also that with all of the subsidized services that are flying about right now, where you see free deliveries or discounts on groceries to encourage new business — a result of the market getting so competitive — those logistics have bled into being an even bigger cost.
So it’s no surprise to see the biggest players in this space looking at ways that it might leverage advances in technology to cut those costs and speed up how those operations work, even if it’s just a promise of discounts in years, not weeks. Of course investors might see it otherwise if that doesn’t go to plan.
In addition to this collaboration with Oxbotica, Ocado said it will be looking to make more investments and/or partnerships as it grows and develops its autonomous vehicle capabilities. While this is the company’s first investment into Oxbotica, it has made a number of investments into other startups, and collaborated to work on the next stage of technology. This has included research to build a robotic arm — which robotic pickers is something it will be introducing soon — as well as the recent acquisition of two robotics companies, Kindred and Haddington, for $262 million; and investments in robotics startups Karakuri and Myrmex, and more,
Notably, Oxbotica and Ocado are not strangers. They started to work together on a delivery pilot back in 2017. You can see a video of how that delivery service looks here:
“This is an excellent opportunity for Oxbotica and Ocado to strengthen our partnership, sharing our vision for the future of autonomy,” said Newman, in a statement. “By combining both companies’ cutting-edge knowledge and resources, we hope to bring our Universal Autonomy vision to life and continue to solve some of the world’s most complex autonomy challenges.”
But as with all self-driving technology — incredibly complex and full of regulatory and safety hurdles — we are still fairly far from full commercial systems that actually remove people from the equation completely.
“For both regulatory and complexity reasons, Ocado expects that the development of vehicles that operate in low-speed urban areas or in restricted access areas, such as inside its CFC buildings or within its CFC yards, may become a reality sooner than fully-autonomous deliveries to consumers’ homes,” Ocado notes in its statement on the deal. “However, all aspects of autonomous vehicle development will be within the scope of this collaboration. Ocado expects to see the first prototypes of some early use cases for autonomous vehicles within two years.”
Newman noted that while on-street self-driving might still be some years away, it’s less of a moonshot concept today than it used to be, and that Oxbotica is on the road to it already. “You can get to the moon in stages,” he said.
Updated with interviews with both companies, and to correct that Walmart closed its deal to sell ASDA in February.
If the eight person team behind the new startup Hadrian has their way, they’ll have transformed the manufacturing industry within the next decade.
At least, that’s the goal for the new San Francisco-based startup, founded only last year, which has set its sights on building out a new model for advanced manufacturing to enable the satellite, space ship, and advanced energy technology companies to build the future they envision better and faster.
“We view our job as to provide the world’s most efficient space and defense component factory,” said Hadrian founder, Chris Power.
Initially, the company is building factories to make the parts that go on rocket ships, according to Power, but the business has implications for any company that needs bespoke components to make their equipment.
“Let me tell you how bad it is at the moment and what’s going to happen over the next 20 years. Right now everyone in space and defense, [including] SpaceX and Lockheed Martin, outsources their parts and manufacturing to small factories across the country. They’re super expensive, they’re unreliable and they’re completely invisible to the customers,” said Power. “This causes big problems with space and defense manufacturers in the design phase, because the lead time is so long and the iteration time is super long. Imagine running software and being able to iterate on your product once every 20 days? If you can imagine a Gantt chart of how to build a rocket, about 60% of that is buffer time… A lot of the delays in launches and stuff like that happen because parts got delivered three months ago. It’d be like running a McDonalds and realizing that your fries and burger providers could not tell you when the food would arrive.”
It’s hard to overstate the strategic importance of the parts suppliers to the operations of aerospace, defense, and advanced machining companies. As no less an authority on manufacturing than Elon Musk noted in a tweet, “The factory is the product.” It’s also hard to overstate the geopolitical importance of re-establishing the U.S. as a center of manufacturing excellence, according to Hadrian’s investors Lux Capital, Founders Fund, and Construct Capital. Which is one reason why they’re investing $9.5 million into the very early stage business.
“America made massive strategic mistakes in the early 90s which have left our national manufacturing ecosystem completely dilapidated,” said Founders Fund principal Delian Asparouhov. “The only way to get out of this disaster is to re-invent the most basic input into our aerospace and defense supply chains, machining metal parts quickly and with high tolerance. Right now, America’s most innovative company, SpaceX, relies on a network of near-retired machinists to produce space-worthy metal parts, and no one in technology is. focused on solving this.”
The factory is the product
— Elon Musk (@elonmusk) January 11, 2021
Power got to understand the problem at his previous company, Ento, which sold workforce management software to blue collar customers. It was there he realized the issue of. the aging workforce and the need for manufacturers to upgrade almost every aspect of their own technology stack. “I realized that the right way to bring technology to the industrial space is not to sell software to these companies, it’s to build an industrial business from scratch with software.”
Initially, Hadrian is focusing all of its efforts on the space industry, where the component manufacturing problem is especially acute, but the manufacturing capabilities the company is building out have broad relevance across any industry that requires highly engineered components.
“The demand for manufacturing from both the large SpaceX and Blue Origin all the way to this growing long tail of companies from Anduril to Relativity to Varda,” said Lux Capital co-founder Josh Wolfe. “Most of these guys are using mom and pop machine shops… [and] those shops are horribly inefficient. They’re not consistent, and they’re not reliable. Between the software automation, the hardware, you can cut down on inefficiency every step of the process… I like to think of value creation as waste reduction… so mundane things like quoting, scheduling, bidding, and planning all the way to the programming of the manufacturing… every one of those things takes hours to tens of hours to days and weeks, so if you can do that in minutes, it’s just a no-brainer. [Hadrian] will be the cutting edge choice for all of the new and explicitly dedicated and focused aerospace and defense companies.”
Power envisions a network of manufacturing facilities that can initially cover roughly 65% of all space and defense components, and will eventually take that number up to 95% of components. Already several of the biggest launch vehicle and satellite manufacturers are in talks with the company to produce hundreds of units for them, Power said. Some of those companies just happen to be in the Construct, Lux, and Founders Fund portfolio.
And the company’s founder sees this as a new way to revitalize American manufacturing jobs as well. “Manufacturing jobs in space and defense can easily be as high paying as a software engineering job at Google,” he said. In an ideal world, Hadrian would like to offer an onramp to high paying manufacturing careers in the 21st century in the same way that automakers provided good union jobs in the twentieth.
“We haven’t built any of this. If you look at the sheer number of people that we need to train and hire on our new technology and new systems, that people problem and that training problem is part of growing our business.”
A render of Axiom’s future commercial space station design.
Chili Piper, which has a sophisticated SaaS appointment scheduling platform for sales teams, has raised a $33 million B round led by Tiger Global. Existing investors Base10 Partners and Gradient Ventures (Google’s AI-focused VC) also participated. This brings the company’s total financing to $54 million. The company will use the capital raised to accelerate product development. The previous $18M A round was led by Base10 and Google’s Gradient Ventures 9 months ago.
It’s main competitor is Calendly, started 21/2 years previously, which recently achieved a $3Bn valuation.
Launched in 2016, Chili Piper’s software for B2B revenue teams is designed to convert leads into attended meetings. Sales teams can also use it to book demos, increase inbound conversion rates, eliminate manual lead routing, and streamline critical processes around meetings. It’s used by Intuit, Twilio, Forrester, Spotify, and Gong.
Chili Piper has a number of different tools for businesses to schedule and calendar accountments, but its key USP is in its use by ‘inbound SDR Sales Development Representatives (SDR)’, who are responsible for qualifying inbound sales leads. It’s particularly useful in scheduling calls when customers hit websites ask for a salesperson to call them back.
Nicolas Vandenberghe, CEO, and co-founder of Chili Piper said: “When we started we sold the house and decided to grow the company ourselves. So all the way until 2019 we bootstrapped. Tiger gave us a valuation that we expected to get at the end of this year, which will help us accelerate things much faster, so we couldn’t refuse it.”
Alina Vandenberghe, CPO, and Co-founder said: “We’re proud to have so many customers scheduling meetings and optimizing their calendars with Chili Piper’s Instant Booker.”
Since the pandemic hit, the husband-and-wife founded company has gone fully remote, with 93 employees in 81 cities and 21 countries.
John Curtius, Partner at Tiger Global said: “When we met Nicolas and Alina, we were fired up by their product vision and focus on customer happiness.”
TJ Nahigian, Managing Partner at Base10 Partners, added: “We originally invested in Chili Piper because we knew customers needed ways to add fire to how they connected with inbound leads. We’ve been absolutely blown away with the progress over the past year, 2020 has been a step-change for this company as business went remote.”
JustKitchen, a cloud kitchen startup, will start trading on the Toronto Stock Exchange (TSX) Venture Exchange on Thursday morning. It is doing a direct listing of its common shares, having already raised $8 million at a $30 million valuation.
The company says this makes it one of the first—if not the first—cloud kitchen company to go public in North America. While JustKitchen launched operations last year in Taiwan, it is incorporated in Canada, with plans to expand into Hong Kong, Singapore, the Philippines and the United States. TSX Venture is a board on the Toronto Stock Exchange for emerging companies, including startups, that can move to the main board once they reach certain thresholds depending on industry.
“It’s a really convenient way to get into the market and with the ghost kitchen industry in particular, it’s early stage and there’s a lot of runway,” co-founder and chief executive officer Jason Chen told TechCrunch. “We felt there really was a need to get going as quickly as we could and really get out into the market.”
Participants in JustKitchen’s IPO rounds included returning investor SparkLabs Taipei (JustKitchen took part in its accelerator program last year), investment institutions and retail clients from Toronto. More than half of JustKitchen’s issued and outstanding shares are owned by its executives, board directors and employees, Chen said.
One of the reasons JustKitchen decided to list on TSX Venture Exchange is Chen’s close ties to the Canadian capital markets, where he worked as an investment banker before moving to Taiwan to launch the startup. A couple of JustKitchen’s board members are also active in the Canadian capital markets, including Darren Devine, a member of TSX Venture Exchange’s Local Advisory Committee.
These factors made listing on the board a natural choice for JustKitchen, Chen told TechCrunch. Other reasons included ability to automatically graduate to the main TSX board once companies pass certain thresholds, including market cap and net profitability, and the ease of doing dual listings in other countries. Just Kitchen is also preparing to list its common shares on the OTCQB exchange in the U.S. and the Frankfurt Stock Exchange in Germany.
A security lapse at online grocery delivery startup Mercato exposed tens of thousands of customer orders, TechCrunch has learned.
A person with knowledge of the incident told TechCrunch that the incident happened in January after one of the company’s cloud storage buckets, hosted on Amazon’s cloud, was left open and unprotected.
The company fixed the data spill, but has not yet alerted its customers.
Mercato was founded in 2015 and helps over a thousand smaller grocers and specialty food stores get online for pickup or delivery, without having to sign up for delivery services like Instacart or Amazon Fresh. Mercato operates in Boston, Chicago, Los Angeles, and New York, where the company is headquartered.
TechCrunch obtained a copy of the exposed data and verified a portion of the records by matching names and addresses against known existing accounts and public records. The data set contained more than 70,000 orders dating between September 2015 and November 2019, and included customer names and email addresses, home addresses, and order details. Each record also had the user’s IP address of the device they used to place the order.
The data set also included the personal data and order details of company executives.
It’s not clear how the security lapse happened since storage buckets on Amazon’s cloud are private by default, or when the company learned of the exposure.
Companies are required to disclose data breaches or security lapses to state attorneys-general, but no notices have been published where they are required by law, such as California. The data set had more than 1,800 residents in California, more than three times the number needed to trigger mandatory disclosure under the state’s data breach notification laws.
It’s also not known if Mercato disclosed the incident to investors ahead of its $26 million Series A raise earlier this month. Velvet Sea Ventures, which led the round, did not respond to emails requesting comment.
In a statement, Mercato chief executive Bobby Brannigan confirmed the incident but declined to answer our questions, citing an ongoing investigation.
“We are conducting a complete audit using a third party and will be contacting the individuals who have been affected. We are confident that no credit card data was accessed because we do not store those details on our servers. We will continually inform all authoritative bodies and stakeholders, including investors, regarding the findings of our audit and any steps needed to remedy this situation,” said Brannigan.
Know something, say something. Send tips securely over Signal and WhatsApp to +1 646-755-8849. You can also send files or documents using our SecureDrop. Learn more.
After inking a deal to work together almost three years ago, U.S. supermarket chain Kroger and U.K. online grocer Ocado today took the wraps off the first major product of that deal. Kroger has launched a new Ocado-powered customer fulfillment center in Monroe, Ohio, outside of Cincinnati, a gigantic warehouse covering 375,000 square feet and thousands of products for packing and delivering Kroger orders from online shoppers.
Built with a giant grid along the floor, “the shed”, as Ocado calls its warehouses, will feature some 1,000 robots alongside 400 human employees to pick, sort and move items. It is expected to process as much as $700 million in sales annually, the sales of 20 brick-and-mortar stores.
Those orders, in turn, will be delivered in temperature-controlled Kroger Delivery vans, built on the model of Ocado’s vans in the U.S. and able to store up to 20 orders. These will also be run using Ocado software, mapping algorithms to optimize deliveries along the fastest and most fuel-efficient routes.
Image Credits: Kroger
Kroger and Ocado’s partnership was a long time in the making, but the focus on what has come out of it is probably at its keenest right now, given the huge boost online shopping has had in the past year. The COVID-19 pandemic, and the resulting push for more social distancing, has driven a lot of people to the internet to shop, opting for deliveries over physical store visits for some or all of their food and other weekly essentials.
That trend has also spelled more competition in the space, too: the likes of Amazon, Walmart, other traditional grocers getting their digital strategies in order and online players all are hoping for a piece of the market of consumers now ready to buy online.
That tide has also lifted Kroger’s boat. In a call today with journalists, Rodney McMullen, Kroger’s chairman and CEO, said that delivery had grown 150% for Kroger last year.
While some of that may well melt back into physical shopping as and when COVID-19 cases wane (fingers crossed), many in the industry believe that the genie has been let out of the bottle, so to speak: Many consumers introduced to shopping online will stay, at least in part, and so this is about building infrastructure to meet that new demand.
(And there is some data that backs that up: Ocado CEO and co-founder Tim Steiner noted that at Ocado, pre-pandemic the average order value for the company was £105 ($144). That grew to £180 last year, and is now at £120.)
Kroger, like many brick-and-mortar players, has been building out multiple fronts in its digital strategy. Alongside Ocado, the company has also been investing in technology to boost the efficiency of its in-store operations (for example, by working with companies like Shelf Engine), and it has a grocery delivery partnership with Instacart.
Kroger’s partnership with Instacart will remain in place, not least because it covers a much wider geography than the Ocado approach, which is live now in Cincinnati, and sounds like it will also expand to Florida. While Kroger today said that CFCs will vary in size and be built on the concept of “modules” (the Monroe facility is built on seven modules), this is still a capital intensive approach compared to the Instacart model, so might overall face a slower rollout and perhaps only make sense in Kroger’s denser markets.
“The two partnerships are critical to Kroger and our customers,” said Yael Cosset, Kroger’s CIO, in the call today. “We expect to work very closely in strategic partnership with Instacart and with Ocado.”
Ocado, an early player that started out in the U.K. back in 2000, is seen by many as the industry standard for how to build and run an online-only grocery business.
But rather than growing by taking its direct grocery business outside the U.K., the company has been expanding its reach by way of using the technology that it has built for itself and turning it into a product — a process that is still very much in development, with the company working now on robotic pickers and other autonomous systems, along with other technology to power and make its delivery service more efficient.
Ocado’s “AWS” strategy of turning tech that it has built for itself into a product to sell to others has born fruit: it now has partnerships to power online grocery services, and specifically fulfillment centers, in Japan (with Aeon), France (with Casino) and Canada (with Sobeys). That means the Kroger rollout is now a tested model, but it’s still a very notable move for the company to break into the U.S. while at the same time giving Kroger a much-needed bit of infrastructure to better compete with bigger players in the country like Walmart and Amazon.
In that regard, it will be interesting to see how and if Kroger leverages its much bigger Ocado-powered infrastructure for its other projects. The company is working with Mirakl to develop its own marketplace for third-party retailers, going head to head with similar offerings from — yes — Amazon and Walmart.
Meati, a company turning mycelium (the structural fibers of fungi) into healthier meat replacements for consumers, is prepping for a big summer rollout.
Co-founder Tyler Huggins expects to have the first samples of its whole-cut steak and chicken products in select restaurants around the country — along with their first commercial product, a jerky strip.
For Huggins, the product launch is another step on a long road toward broad commercial adoption of functional fungi foods as a better-for-you alternative to traditional meats.
“Use this as a conversation starter. About 2 ounces of this gives you 50% of your protein; 50% of your fiber; and half of your daily zinc. There really is nothing that can compare to this product in terms of nutritionals,” Huggins said.
And moving from meat to mushrooms is a better option for the planet.
Meati expects to turn on its pilot plant this summer and is joining a movement among mushroom fans that includes milk replacements, from Perfect Day, more meat replacements from Atlast, and leather substitutes from Ecovative and MycoWorks.
“We’re definitely all in this together,” said Huggins of the other mob of mycelium-based tech companies bringing products to market.
However, not all mycelium is created equally, Huggins said. Meati has what Huggins said was a unique way of growing its funguses (not a real word) that “keep it in its most happy state.” That means peak nutritional content and peak growth efficiency, according to the company.
For Huggins, whose parents own a bison ranch and who grew up in cattle country, the goal is not to replace a T-bone or a rib-eye, but the cuts of meat and chicken that find their ways into a burrito supreme or other quick-serve meat cuts.
Rendering of Meati mushroom meats in a Banh Mi. Image Credits: Meati
“Head to head with that kind of cut, we win,” Huggins said. “I’d rather pick a fight there now and buy ourselves some time. I don’t think we’re going to go super high end to start.”
That said, the company’s cap table of investors already includes some pretty heady culinary company. Acre Venture Partners (which counts Sam Kass — President Barack Obama’s senior policy advisor for nutrition policy, executive director for First Lady Michelle Obama’s Let’s Move! campaign, and an assistant chef in the White House — among its partnership) is an investor. So is Chicago’s fine dining temple, Alinea.
But Huggins wants Meati to be an everyday type of meat replacement product. “I want to make sure that people think this is an everyday protein,” Huggins said.
Meati thinks its future meat replacements will be cost competitive with conventional beef and chicken, but to whet consumers’ appetites, the company is starting with jerky.
“Meati’s delicious jerky,” said Huggins. “It provides this blank canvas. We’ll start with these beef-jerky-like flavors. But I want to come out of the gate and say that we’re mycelium jerky.”
The company currently has 30 people on staff led by Huggins and co-founder Justin Whiteley. The two men initially started working on Meati as a battery replacement. Based on their research (Huggins with mycelium and Whiteley with advanced batteries) the two men received a grant for a mycelium-based electrode for lithium-ion batteries.
“We were trying to tweak the chemical composition of the mycelium to make a better battery. What we found was that we were making something nutritious and edible,” said Huggins.
Also … the battery companies didn’t want it.
Now, backed by $28 million from Acre, Prelude Ventures, Congruent Ventures and Tao Capital, Meati is ready to go to market. The company also has access to debt capital to build out its vast network of mycelium growing facilities. It’s just raised a $18 million debt round from Trinity and Silicon Valley Bank.
“Two years ago … most companies in this space … there wasn’t this ability to take on debt to put steel in the ground,” said Huggins. “It’s an exciting time to be in food tech given that you can raise VC funding and there’s this ready available market for debt financing. You’ll start seeing faster and more rapid development because of it.”
Meati co-founders Tyler Huggins and Justin Whiteley. Image Credits: Meati
When Hampus Jakobsson, Heidi Lindvall, and Joel Larsson, all well-known players in the European venture ecosystem, began talking about their new firm Pale Blue Dot, they began by looking at the problems with venture capital.
For the three entrepreneurs and investors, whose resumes included co-founding companies and accelerators like The Astonishing Tribe (Jakobsson) and Fast Track Malmö (Lindvall and Larsson) and working as a venture partner at BlueYard Capital (Jakobsson again), the problems were clear.
Their first thesis was that all investment funds should be impact funds, and be taking into account ways to effect positive change; their second thesis was that since all funds should be impact funds, what would be their point of differentiation — that is, where could they provide the most impact.
The three young investors hit on climate change as the core mission and ran with it.
As it was closing on €53 million ($63.3 million) last year, the firm also made its first investments in Phytoform, a London headquartered company creating new crops using computational biology and synbio; Patch, a San Francisco-based carbon-offsetting platform that finances both traditional and frontier “carbon sequestration” methods; and 20tree.ai, an Amsterdam-based startup, using machine learning and satellite data to understand trees to lower the risk of forest fires and power outages.
Now they’ve raised another €34 million and seven more investments on their path to doing between 30 and 35 deals.
These investments primarily focus on Europe and include Veat, a European vegetarian prepared meal company; Madefrom, a still-in-stealth company angling to make everyday products more sustainable; HackYourCloset, a clothing rental company leveraging fast fashion to avoid landfilling clothes; Hier, a fresh food delivery service; Cirplus, a marketplace for recycled plastics trading; and Overstory, which aims to prevent wildfires by giving utilities a view into vegetation around their assets.
The team expects to be primarily focused on Europe, with a few opportunistic investments in the U.S., and intends to invest in companies that are looking to change systems rather than directly affect consumer behavior. For instance, a Pale Blue Dot investment likely wouldn’t include e-commerce filters for more sustainable shopping, but potentially could include investments in sustainable consumer products companies.
The size of the firm’s commitments will range up to €1 million and will look to commit to a lot of investments. That’s by design, said Jakobsson. “Climate is so many different fields that we didn’t want to do 50% of the fund in food or 50% of the fund in materials,” he said. Also, the founders know their skillsets, which are primarily helping early stage entrepreneurs scale and making the right connections to other investors that can add value.
“In every deal we’ve gotten in co-investors that add particular, amazing, value while we still try to be the shepherds and managers and sherpas,” Jakobsson said. “We’re the ones that are going to protect the founder from the hell-rain of investor opinions.”
Another point of differentiation for the firm are its limited partners. Jakobsson said they rejected capital from oil companies in favor of founders and investors from the tech community that could add value. These include Prima Materia, the investment vehicle for Spotify founder Daniel Ek; the founders of Supercell, Zendesk, TransferWise and DeliveryHero are also backing the firm. So too, is Albert Wenger, a managing partner at Union Square Ventures.
The goal, simply, is to be the best early stage climate fund in Europe.
“We want to be the European climate fund,” Lindvall said. “This is where we can make most of the difference.”
Hydrogen — the magical gas that Jules Verne predicted in 1874 would one day be used as fuel — has long struggled to get the attention it deserves. Discovered 400 years ago, its trajectory has seen it mostly mired in obscurity, punctuated by a few explosive moments, but never really fulfilling its potential.
Now in 2021, the world may be ready for hydrogen.
This gas is capturing the attention of governments and private sector players, fueled by new tech, global green energy legislation, post-pandemic “green recovery” schemes and the growing consensus that action must be taken to combat climate change.
Joan Ogden, professor emeritus at UC Davis, started researching hydrogen in 1985 — at the time considered “pretty fringy, crazy stuff.” She’s seen industries and governments inquisitively poke at hydrogen over the years, then move on. This new, more intense focus feels different, she said.
The funding activity in France is one illustration of what is happening throughout Europe and beyond. “Back in 2018, the hydrogen strategy in France was €100 million — a joke,” Sabrine Skiker, the EU policy manager for land transport at Hydrogen Europe, said in an interview with TechCrunch. “I mean, a joke compared to what we have now. Now we have a strategy that foresees €7.2 billion.”
The European Clean Hydrogen Alliance forecasts public and private sectors will invest €430 billion in hydrogen in the continent by 2030 in a massive push to meet emissions targets. Globally, the hydrogen generation industry is expected to grow to $201 billion by 2025 from $130 billion in 2020 at a CAGR of 9.2%, according to research from Markets and Markets published this year. This growth is expected to lead to advancements across multiple sectors including transportation, petroleum refining, steel manufacturing and fertilizer production. There are 228 large-scale hydrogen projects in various stages of development today — mostly in Europe, Asia and Australia.
When the word “hydrogen” is uttered today, the average non-insider’s mind likely gravitates toward transportation — cars, buses, maybe trains or 18-wheelers, all powered by the gas.
But hydrogen is and does a lot of things, and a better understanding of its other roles — and challenges within those roles — is necessary to its success in transportation.
Hydrogen is already being heavily used in petroleum refineries and by manufacturers of steel, chemicals, ammonia fertilizers and biofuels. It’s also blended into natural gas for delivery through pipelines.
Hydrogen is not an energy source, but an energy carrier — one with exceptional long-duration energy storage capabilities, which makes it a complement to weather-dependent energies like solar and wind. Storage is critical to the growth of renewable energy, and greater use of hydrogen in renewable energy storage can drive the cost of both down.
However, 95% of hydrogen produced is derived from fossil fuels — mostly through a process called steam-methane reforming (SMR). Little of it is produced via electrolysis, which uses electricity to split hydrogen and oxygen. Even less is created from renewable energy. Thus, not all hydrogen is created equal. Grey hydrogen is made from fossil fuels with emissions, and blue hydrogen is made from non-renewable sources whose carbon emissions are captured and sequestered or transformed. Green hydrogen is made from renewable energy.
The global fuel cell vehicle market is hit or miss. There are about 10,000 FCVs in the U.S., with most of them in California — and sales are stalling. Only 937 FCVs were sold in the entire country in 2020, less than half the number sold in 2019. California has 44 hydrogen refueling stations and about as many in the works, but a lack of refueling infrastructure outside of the state isn’t helping American adoption.
As expected, Southeast Asian super-app Grab is going public via a SPAC, or blank check company.
The combination, which TechCrunch discussed over the weekend, will value Grab on an equity basis at $39.6 billion and will provide around $4.5 billion in cash, $4.0 billion of which will come in the form of a private investment in public equity, or PIPE. Altimeter Capital is putting up $750 million in the PIPE — fitting, as Grab is merging with one of Alitmeter’s SPACs.
Grab, which provides ride-hailing, payments and food delivery, will trade under the ticker symbol “GRAB” on Nasdaq when the deal closes. The announcement comes a day after Uber told its investors it was seeing recovery in certain transactions, including ride-hailing and delivery.
Uber also told the investing public that it’s still on track to reach adjusted EBITDA profitability in Q4 2021. The American ride-hailing giant did a surprising amount of work clearing brush for the Grab deal. Extra Crunch examined Uber’s ramp towards profitability yesterday.
This morning, let’s talk through several key points from Grab’s SPAC investor deck. We’ll discuss growth, segment profitability, aggregate costs and COVID-19, among other factors. You can read along in the presentation here.
The impact on Grab’s operations from COVID-19 resembles what happened to Uber in that the company’s deliveries business had a stellar 2020, while its ride-hailing business did not.
From a high level, Grab’s gross merchandise volume (GMV) was essentially flat from 2019 to 2020, rising from $12.2 billion to $12.5 billion. However, the company did manage to greatly boost its adjusted net revenue over the same period, which rose from $1.0 billion to $1.6 billion.
The $9 trillion financial management firm Blackrock is collaborating with the $313 billion Singapore investment firm Temasek to back companies developing technologies and services to help create a zero emission economy by 2050.
The two mega-investment firms will invest an initial $600 million to launch Decarbonization Partners, and look to raise money from investors committing to achieving a net zero world and long-term sustainable finacnial returns. The two partners have set themselves a goal to raise $1 billion for their first fund, including capital from Temasek and BlackRock.
The partnership, coming during Earth month, is one of several big multi-billion dollar initiatives that are underway to prevent global climate change caused by greenhouse gas emissions.
Indeed, BlackRock is somewhat tardy to the party. Temasek, for its part, has already made a number of high-profile bets in the alternative meat market — namely in companies like Impossible Foods — and in alternative energy technology developers including Eavor, a geothermal company, and a $500 million bet on a renewable power developer in India.
Meanwhile, a coalition of billionaires led by Bill Gates are already on their second billion dollar investment vehicle through Breakthrough Energy, a multi-stage, multi-strategy initiative that includes a venture capital arm as well as other types of financing on the way.
“The world cannot meet its net zero ambitions without transformational innovation,” said Larry Fink, Chairman and CEO of BlackRock, in a statement. “For decarbonization solutions and technologies to transform our economy, they need to be scaled. To do that, they need patient, well-managed capital to support their vital goals. This partnership will help define climate solutions as a standalone asset class that is both essential to our collective mission and a historic investment opportunity created by the net zero transition.”
To get a sense of what Decarbonization Partners might back, companies should probably look to the Breakthrough Energy portfolio — the firms share similar interests in new sources of energy, technologies to distribute that energy, building and manufacturing technologies, and material science and process innovations.
It’s a big swing that the firms are taking, but the flood of capital coming into the sustainability sector is commensurate with both the size of the problem, and the potential opportunity in returns generated by solving it.
A report from Morgan Stanley estimated that solving climate change would be a $50 trillion problem, according to a 2019 report from Forbes.
“Bold, aggressive actions are needed to make the global net zero ambition a reality. Decarbonization Partners represents one of several steps we are taking to follow through on our commitment to halve the emissions from our portfolio by 2030, and ultimately move to net zero emissions by 2050,” said Dilhan Pillay, Chief Executive Officer of Temasek International. “Through collective efforts with like-minded partners, we will be able to create sustainable value for all of our stakeholders over the long term, and investors will have the opportunity to help deliver innovative solutions at scale to address climate challenges.”
Ride-hailing and delivery company Grab has announced plans to go public in the U.S. Based in Singapore, the company has evolved from a ride-hailing app to a Southeast Asian super app that offers several consumer services, including food delivery, financial services, such as an e-wallet so that you can send and receive money.
It operates in Singapore, Malaysia, Cambodia, Indonesia, Myanmar, Philippines, Thailand and Vietnam. According to Crunchbase, the company has raised over $10 billion, including from SoftBank’s Vision Fund.
In order to go public, Grab has chosen to merge with a SPAC named Altimeter Growth Corp. A SPAC is a publicly-traded blank-check company based in the U.S. Going public through this process should be much easier for Grab — especially because it’s a foreign company.
If the deal goes through, it would be the world’s largest SPAC merger. Grab would be listed on NASDAQ under the symbol ‘GRAB’.
A part of the announcement, Grab has shared some metrics and some big numbers. In 2020, the company managed to generate around $12.5 billion in gross merchandise value (GMV). The merger would value Grab at $39.6 billion and the company would keep $4.5 billion in cash.
The company thinks there’s still a lot of room to grow when it comes to food delivery and on-demand mobility in Southeast Asia. It expects to see the total addressable market jump from $52 billion to $180 billion by 2025.
“This is a milestone in our journey to open up access for everyone to benefit from the digital economy. This is even more critical as our region recovers from COVID-19. It was very challenging for us too, but it taught us immensely about the resiliency of our business,” Grab co-founder and CEO Anthony Tan said in the announcement.
“Our diversified superapp strategy helped our driver-partners pivot to deliveries, and enabled us to deliver growth while improving profitability. As we become a publicly-traded company, we’ll work even harder to create economic empowerment for our communities, because when Southeast Asia succeeds, Grab succeeds,” he added.
Altimeter has agreed to a three-year lockup period for its sponsor shares, which means that Altimeter should remain committed to the company for a while.
The office shut-down at the start of the Covid-19 pandemic last year spurred huge investment in digital transformation and a wave of tech companies helping with that, but there were some distinct losers in the shift, too — specifically those whose business models were predicated on serving the very offices that disappeared overnight. Today, one of the companies that had to make an immediate pivot to keep itself afloat is announcing a round of funding, after finding itself not just growing at a clip, but making a profit, as well.
SnackMagic, a build-your-own snack box service, has raised $15 million in a Series A round of funding led by Craft Ventures, with Luxor Capital also participating.
(Both investors have an interesting track record in the food-on-demand space: Most recently, Luxor co-led a $528 million round in Glovo in Spain, while Craft backs/has backed the likes of Cloud Kitchens, Postmates and many more).
The funding comes on the back of a strong year for the company, which hit a $20 million revenue run rate in eight months and turned profitable in December 2020.
Founder and CEO Shaunuk Amin said in an interview that the plan will be to use the funding both to continue growing SnackMagic’s existing business, as well as extend into other kinds of gifting categories. Currently, you can ship snacks anywhere in the world, but the customizable boxes — recipients are gifted an amount that they can spend, and they choose what they want in the box themselves from SnackMagic’s menu, or one that a business has created and branded as a subset of that — are only available in locations in North America, serviced by SnackMagic’s primary warehouse. Other locations are given options of pre-packed boxes of snacks right now, but the plan is to slowly extend its pick-and-mix model to more geographies, starting with the U.K.
Alongside this, the company plans to continue widening the categories of items that people can gift each other beyond chocolates, chips, hot sauces and other fun food items, into areas like alcohol, meal kits, and non-food items. There’s also scope for expanding to more use cases into areas like corporate gifting, marketing and consumer services, and analytics coming out of its sales.
Amin calls the data that SnackMagic is amassing about customer interest in different brands and products “the hidden gem” of the platform.
“It’s one of the most interesting things,” he said. Brands that want to add their items to the wider pool of products — which today numbers between 700 and 800 items — also get access to a dashboard where they monitor what’s selling, how much stock is left of their own items, and so on. “One thing that is very opaque [in the CPG world] is good data.”
For many of the bigger companies that lack their own direct sales channels, it’s a significantly richer data set than what they typically get from selling items in the average brick and mortar store, or from a bigger online retailer like Amazon. “All these bigger brands like Pepsi and Kellogg not only want to know this about their own products more but also about the brands they are trying to buy,” Amin said. Several of them, he added, have approached his company to partner and invest, so I guess we should watch this space.
SnackMagic’s success comes from a somewhat unintended, unlikely beginning, and it’s a testament to the power of compelling, yet extensible technology that can be scaled and repurposed if necessary. In its case, there is personalization technology, logistics management, product inventory and accounting, and lots of data analytics involved.
The company started out as Stadium, a lunch delivery service in New York City that was leveraging the fact that when co-workers ordered lunch or dinner together for the office — say around a team-building event or a late-night working session, or just for a regular work day — oftentimes they found that people all hankered for different things to eat.
In many cases, people typically make separate orders for the different items, but that also means if you are ordering to all eat together, things would not arrive at the same time; if it’s being expensed, it’s more complicated on that front too; and if you’re thinking about carbon footprints, it might also mean a lot less efficiency on that front too.
Stadium’s solution was a platform that provided access to multiple restaurants’ menus, and people could pick from all of them for a single order. The business had been operating for six years and was really starting to take off.
“We were quite well known in the city, and we had plans to expand, and we were on track for March 2020 being our best month ever,” Amin said. Then, Covid-19 hit. “There was no one left in the office,” he said. Revenue disappeared overnight, since the idea of delivering many items to one place instantly stopped being a need.
Amin said that they took a look at the platform they had built to pick many options (and many different costs, and the accounting that came with that) and thought about how to use that for a different end. It turned out that even with people working remotely, companies wanted to give props to their workers, either just to say hello and thanks, or around a specific team event, in the form of food and treats — all the more so since the supply of snacks you typically come across in so many office canteens and kitchens were no longer there for workers to tap.
It’s interesting, but perhaps also unsurprising, that one of the by-products of our new way of working has been the rise of more services that cater (no pun intended) to people working in more decentralised ways, and that companies exploring how to improve rewarding people in those environments are also seeing a bump.
Just yesterday, we wrote about a company called Alyce raising $30 million for its corporate gifting platform that is also based on personalization — using AI to help understand the interests of the recipient to make better choices of items that a person might want to receive.
Alyce is taking a somewhat different approach to SnackMagic: it’s not holding any products itself, and there is no warehouse but rather a platform that links up buyers with those providing products. And Alyce’s initial audience is different, too: instead of internal employees (the first, but not final, focus for SnackMagic) it is targeting corporate gifting, or presents that sales and marketing people might send to prospects or current clients as a please and thank you gesture.
But you can also see how and where the two might meet in the middle — and compete not just with each other, but the many other online retailers, Amazon and otherwise, plus the consumer goods companies themselves looking for ways of diversifying business by extending beyond the B2C channel.
“We don’t worry about Amazon. We just get better,” Amin said when I asked him about whether he worried that SnackMagic was too easy to replicate. “It might be tough anyway,” he added, since “others might have the snacks but picking and packing and doing individual customization is very different from regular e-commerce. It’s really more like scalable gifting.”
Investors are impressed with the quick turnaround and identification of a market opportunity, and how it quickly retooled its tech to make it fit for purpose.
“SnackMagic’s immediate success was due to an excellent combination of timing, innovative thinking and world-class execution,” said Bryan Rosenblatt, principal investor at Craft Ventures, in a statement. “As companies embrace the future of a flexible workplace, SnackMagic is not just a snack box delivery platform but a company culture builder.”
Corporate catering company Elior has acquired French startup Nestor for an undisclosed amount. Nestor originally started with a simple idea to differentiate itself from food delivery giants, such as Deliveroo, Uber Eats and others.
Every day, the startup offered a single menu for lunch. If you liked what was on the menu, you could order and get delivered 10 to 20 minutes later. By offering a single menu, a delivery person could deliver several clients in a single ride. Similarly, by managing its own kitchen, Nestor could improve its margins as it didn’t have to pay third-party restaurants.
Since I first covered Nestor in 2016, the company has been capital efficient and mostly focused on this unique product offering. Elior says that Nestor managed to reach 10,000 meals per week.
Over the past few months, Nestor has tried to launch new offers. For instance, companies can switch to Nestor for their canteens. The startup delivers meals in fridges directly. It reminds me of Foodles, another French startup focused on canteen-like services.
Nestor can also deliver individually packed lunches in case you are spending the day with some clients for a big meeting. Popchef has also pivoted to focus more on that segment.
Following the acquisition, Nestor is going to focus more and more on the B2B market. While Elior is working with big companies in glass towers, it has been quite hard to convince small and medium companies to open a canteen in the office.
The sales pitch could be summed up in two sentences. Nestor clients don’t need to have their own kitchen as everything is prepared in advance. And employees don’t have to browse Deliveroo at lunch time to find something that isn’t a burger or a pizza.
There’s an “uber for everything” these days and now there are “Ubers for personal chefs”. Just take a look at PopTop or 100 Pleats for instance. Now in London, there is Yhangry (which brands itself as the appropriately shouty YHANGRY). This is a “private chef parties at home” website, and no doubt an app at some point. The startup has now raised a $1.5 million seed round from a number of notable UK angels which also includes a few UK VCs for good measure, as well as ‘Made In Chelsea’ TV star Ollie Locke.
Founders Heinin Zhang and Siddhi Mittal created the startup before the pandemic, which lets people order a made-to-measure dinner party online. Although it trundled along until Covid, it had to pivot into virtual chef classes during lockdowns last year and this. The company is now poised to take advantage of London’s unlocking, which will see legal outdoor and indoor dining return.
The startup also speaks to the decentralization of experiences going on in the wake of the pandemic. In 2019 we were working out in gyms and going to restaurants. In 2021 we are working out at home and bringing the restaurant to us.
Normally booking private dinner parties involves a lot of hassle. The idea here is that Yhangry makes the whole affair as easy to order as an Uber Eats or Deliveroo.
Investors in the Seed round include Carmen Rico (Blossom Capital), Eileen Burbidge (Passion Capital), Orson Stadler (Antler) and Martin Mignot (Index Ventures), Made In Chelsea star Ollie Locke, plus fellow tech founders including Jack Tang (Urban), Adnan Ebrahim (MindLabs), Alex Fitzgerald (Cuckoo Internet), Georgina Kirby (Vinehealth) and Deepali Nangia (Alma Angels). Yhangry’s statement said all the investors are also keen customers. I bet they are.
Co-founder Mittal said in a statement: “By making private chef experiences more accessible and affordable, our customers regularly tell us they are finally able to catch up with friends at home… 70% of our customers have never had a private chef before and for them, the freedom and flexibility to curate their own evening is priceless.”
Yhangry now has 130 chefs on its books. Chefs have to pass a cooking trial and adhere to Covid rules. The funding will be used to double the size of the startup’s team.
The menus start at £17pp for six people. The price of the booking covers everything, including the cost of the fresh ingredients, but customers can add extras, such as wine etc. Since its launch in December 2019, the firm says it has served more than 7,000 Londoners.
Yhangry says it will enter key European markets, such as Paris, Berlin, Lisbon and Barcelona.
How will Yhangry survive post-Covid, with restaurants/bars opening up again?
Mittal said: “When restaurants were open between our launch and March 2020, we saw demand because people want to be able to spend time with their friends in a relaxed setting, and aren’t limited to the two-hour slot you get in a restaurant. Once places start to open up again, we believe Yhangry will follow this trend of at-home dining and socializing – not to mention for people who are not ready yet to go out to a busy pub or restaurant.”
Food delivery startups, and specifically those focused on grocery delivery, continue to reap super-sized rounds of funding in Europe, buoyed by a year of pandemic living that has led many consumers to shift to shopping online. Today, the latest of these is coming out of Norway.
Kolonial, a startup based out of Oslo that offers same-day or next-day delivery of food, meal kits and home essentials — its aim is to provide “a weekly shop” for prices that compete against those of traditional supermarkets — has raised €223 million ($265 million) in an equity round of funding. Along with that, the company — profitable as of last year — is rebranding to Oda and plans to use the money (and new name) to expand to more markets, starting first with Finland and then Germany in 2022.
The market for online grocery ordering and delivery is gearing up to be a very crowded one, with hundreds of millions of dollars being poured by investors into the fuel tanks of a range of startups — each originating out of different geographies, each with a slightly different approach. Oda believes it has the right mix to end up at the front of the pack.
“We have found ourselves in a unique position,” CEO and co-founder Karl Munthe-Kaas said in an interview with TechCrunch. “We have built a service targeting the mass market with instant deliveries and low prices, because if you want to capture the full basket for the family, you can’t be a premium service. We’ve done that, and we’re profitable.”
And now, it will have the backing of two e-commerce heavyweights for its next steps. SoftBank’s Vision Fund 2 and Prosus (the tech holdings of South Africa’s Naspers), are co-leading the round, with past backers Kinnevik and a strategic investor, Norwegian “soft discount” chain REMA, also participating.
Munthe-Kaas confirmed to TechCrunch in an interview that Oda is valued at €750 million ($900 million) post-money.
The funding is a big leap for Oda (the name is not officially going to come into effect until the end of this month, although the company is already describing itself with the new brand, so we’ll follow that lead). PitchBook data notes that before this round, Oda had only raised about $96 million, and its last valuation was estimated to be just $178 million in 2017.
The company has certainly come a long way. Founded in 2013 by ten friends, Kolonial originally seemed to have a more modest vision when it first started out: Kolonial in Norwegian doesn’t mean “colonial” (a connotation Munthe-Kaas nevertheless said the startup wanted to avoid, one big reason for the change), but “cornershop.” These days, Oda is focused more on competing against large supermarkets — its average order size is $120 — yet with a significantly more efficient cost base behind the scenes.
It’s also been helped by the current climate. Online grocery shopping has been growing and maturing for a while now, but the last year been a veritable hothouse in that process: Covid-19, shelter in place orders and a general desire for people to keep their distance all compelled many more consumers to try out online grocery shopping for the first time, and many have stuck with it.
“We have seen a significant inflection point with grocery over the last year with the market transitioning online, accelerated by Covid,” said Larry Illg, CEO of Prosus Food, in a statement. “Oda’s leadership and impressive growth in Norway paired with its ground-breaking technology and ambition to scale across Europe and beyond makes them an ideal partner to tackle the grocery opportunity over the coming years.”
Oda has over the years grown to become the sector leader in a category it arguably helped define in its home country. It was profitable last year on revenues of €200 million, and it currently controls some 70% of Norway’s online grocery ordering and delivery market based on its own particular approach to the model.
That model involves Oda building and controlling its own supply chains from producers to consumers (no partnerships with third y partphysical retailers), producing several of the products itself (such as baked goods) to order, and using centralized fulfillment centers to manage orders for large geographies.
“Centralized warehouses means 50 supermarkets in one location,” Munthe-Kaas said, adding that this also makes the business significantly greener, too.
Those fulfillment centers, meanwhile, are operated at “extreme efficiency”, in his words. Oda’s grocery item picking averages out at 212 units per hour — that is, the amount of items “picked” for orders in a week divided by the number of hours in a week. The next closest UPH number in the industry, Munthe-Kaas said, was Ocado in the UK at 170 UPH, and the norm, he added, was more like 100 UPH, with physical store picking (where customers select items from shelves themselves) averaging out at 70 UPH.
All of this translates to much more cost-effective operations, including more efficient ordering and stock rotation, which helps Oda make better margins on its sales overall. Munthe-Kaas declined to go into the details of how Oda manages to get such high UPH numbers — that’s competitive knowledge, he said — noting only that a lot of automation and data analytics goes into the process.
That will be music to the ears of SoftBank, which has had a complicated run in e-commerce in the last several years, backing a number of interesting juggernauts that have nonetheless found themselves unable to improve on challenging unit economics.
“Oda’s leading position in Norway is testament to the merits of its bespoke and data-driven approach in offering a personalised, holistic and reliable online grocery experience,” said Munish Varma, managing partner for SoftBank Investment Advisers, in a statement. “We believe that Oda’s customer-centric focus, market-leading automation technology and fulfillment efficiency are a winning combination, and position Oda for success in scaling internationally for the benefit of customers and suppliers alike.”
The big challenge for Oda going forward will be whether it can transplant its business model as it has been developed for Norway into further markets.
Oda will not only be looking for customer traction for its own business, but it will be doing so potentially against heavy competition from others also looking to expand outside their borders.
There are other online supermarket plays like Rohlik out of the Czech Republic (which in March bagged $230 million in funding); Everli out of Italy (formerly called Supermercato24, it also raised $100 million); Picnic out of the Netherlands (which has yet to announce any recent funding but it feels like it’s only a matter of time given it too has publicly laid out international ambitions); and Ocado in the UK (which also has raised huge amounts of money to pursue its own international ambitions).
And there is also the wave of companies that are building more fleet-of-foot approaches around smaller inventories and much faster turnaround times, the idea being that this can cater both to individuals and a different way of shopping — smaller and more often — even if you are a family.
Among these so-called “q-commerce” (quick commerce) players, covering just some of the most recent funding rounds, Glovo just last week raised $528 million; Gorillas in Berlin raised $290 million; Turkey’s Getir — also rapidly expanding across Europe — picked up $300 million on a $2.6 billion valuation as Sequoia took its first bite into the European food market; and reportedly Zapp in London has also closed $100 million in funding.
Deliveroo, which went public last week, is also now delivering groceries (in partnership with Sainsbury’s) alongside its restaurant delivery service.
These, ironically, are more cornershop replacements than Oda itself (formerly called Kolonia, or “cornershop” in Norwegian), and Munthe-Kaas said he sees them as “complementary” to what Oda does.
“You need to beat the physical stores on quality, selection and price and get it home delivered,” he said. “This is a margin business and the only way to optimize is to be completely relentless.”
But he also understands that this might ultimately need to be modified depending on the market. For example, while the company has not worked with other retailers in Norway — even the investment by REMA is not for distribution but for better economies of scale in procuring products that REMA and Oda will sell independently from each other — this might be a route that Oda chooses to take in other markets.
“We’re in discussions with several other retailers, wholesalers and producers,” he said. “It’s important to get sourcing terms and have upstream logistics, but there are many ways of achieving that. We are super open to making partnerships on that front, but we still think the way to win is to run the value chain.”
About a year after Beyond Meat debuted in China on Starbucks’s menu, the Californian plant-based protein company opened a production facility near Shanghai to tap the country’s supply chain resources and potentially reduce the carbon footprint of its products.
Situated in Jiaxing, a city 85 km from Shanghai, the plant is Beyond Meat’s first end-to-end manufacturing facility outside the U.S., the Nasdaq-listed company said in an announcement on Wednesday.
Over the past year, competition became steep in China’s alternative protein space with the foray of foreign players like Beyond Meat and Eat Just, as well as a slew of capital injections for domestic startups including Hey Maet and Starfield.
Beyond Meat seems undeterred by the rivalry. When asked by TechCrunch to comment on a story about China’s alternative protein scene, a representative of the company said “there are none that Beyond Meat considers their competitors.”
China not only has an enormous, unsaturated market for meat replacements; it’s also a major supplier of plant-based protein. Chinese meat substitute startups enjoy a cost advantage from the outset and don’t lack interest from investors who race to back consumer products that are more reflective of the tastes of the rising middle class.
Having some kind of manufacturing capacity in China is thus almost a prerequisite for any serious foreign player. Tesla has done it before to build Gigafactory in Shanghai to deliver cheaper electric vehicles. Localized production also helps companies advance their sustainability goals as it shortens the supply chain.
In Beyond Meat’s own words, the Jiaxing facility is “expected to significantly increase the speed and scale in which the company can produce and distribute its products within the region while also improving Beyond Meat’s cost structure and sustainability of operations.”
The American food-tech giant works hard on localization, selling in China both its flagship burger patties and an imitation minced pork product made specifically for the world’s largest consumer of pork. The soy- and rice-based minced pork could be used in a wide range of Chinese cuisines and is the result of a collaboration between the firm’s Shanghai and Los Angeles teams.
Besides production, the Jiaxing plant will also take on R&D responsibilities to invent new products for the region. Beyond Meat will also be unveiling its first owned manufacturing facility in Europe this year.
“We are committed to investing in China as a region for long-term growth,” said Ethan Brown, CEO and founder of Beyond Meat. “We believe this new manufacturing facility will be instrumental in advancing our pricing and sustainability metrics as we seek to provide Chinese consumers with delicious plant-based proteins that are good for both people and planet.”
Beyond Meat products can now be found in Starbucks, KFC, Alibaba’s Hema supermarket and other retail channels across major Chinese cities.