Five Seasons Ventures recently closed a fund raising process that has provided it with commitments in excess of €60m. Significantly, the VC has secured the financial backing of key industry players. Investors include the European Investment Fund, Swiss food giant Nestlé and asset management companies Fondo Italiano d’Investimento and Bpifrance.
The fund plan to focus on early-stage companies developing technological innovations in the food and agricultural sector in Europe. With a “particular interest” in Italy and France, the group hopes to provide capital to entrepreneurs working to solve the “key challenges” currently faced by the food sector.
Issues of interest span the growing demand for healthier foods and personalised nutrition, to shortening supply chains and alternative proteins.
Five Seasons co-founder Niccolò Manzoni, who attended the FoodNavigator Protein Vision conference in Amsterdam earlier this month, stressed that finding solutions to deliver sustainable production throughout the value chain are core to Five Season’s ambition.
“The initial investment themes for the fund include shifting diets focusing on companies that work on tech solutions for better food and nutrition; further transparency in the value chain in the journey from farm to fork; reducing wasted calories by addressing unused production and food waste at any stage; [and] increasing agricultural yield of production and transformation without additional pressure on land resources or the environment,” Manzoni told FoodNavigator.
“We are seeing consumers become more conscious about their nutrition, on everything from the reduction of salt, saturated fats and sugar, to personalised nutrition and the benefits of understanding our gut microbiota. Timing is everything and Five Seasons is looking for game-changing companies that have proven technology, early commercial traction, and are strategically attractive to food corporates.”
Talking tech
Five Seasons wants to invest in companies that have developed a technology-driven product or process. According to the group’s investment philosophy, such developments are likely to deliver faster returns and act as disruptors in the sector.
“We focus on high-technology because we believe it's the key ingredient allowing companies to scale quicker and grow faster. Technological advances are necessary for more disruptive innovation, as opposed to incremental innovation,” Manzoni explained.
There has been an influx of investment into the food and agri tech sector. According to the AgFunder AgriFood Tech Investing Reports, global investment in the space reached more than €8bn n 2017, a year-on-year increase of 29%.
However, Five Seasons believes its sector specific approach brings something different to the table, particularly in Europe. The fund aims to be the “leading” independent food tech VC group in the region. According to figures provided by Five Seasons, 2017 food tech financing in Europe reached €1.4bn – almost double the amount invested in 2016 but still trailing the finance levels available in markets like the US.
Backing winners
Five Seasons’ investment strategy feeds into some of the seismic trends that will shape the future of the food sector. In short, the industry will need to produce more food (that is also healthier) using fewer natural resources.
Five Seasons is working to identify early-stage start-ups with the potential to help deliver this objective.
The fund’s ability to achieve this relies on the background and expertise of its founding partners. Manzoni’s investment track record places him as one of the early backers of companies that are today defining the food tech sector - including Impossible Foods, Perfect Day, Beyond Meat, Clear Labs and Memphis Meats. Co-founder Ivan Farneti has an equally impressive performance history, having founded Doughty Hanson Technology Ventures and sat as a board member of Seedcamp.
Now that the fund has financing in place, it will begin work on identifying investment opportunities.
Manzoni explained: “Next on the agenda: select the best food and ag tech companies to invest in, and help them become successful companies.”
The group uses a variety of platforms to form connections with companies that would benefit from investment. “Being one of the very few VC funds focused on the sector, we get a lot on inbound from start-ups. However, we also regularly attend events as speakers. We work with incubators and accelerators as mentors. We are also keen to follow the work of the European Institute of Innovation & Technology, which we think is a great initiative for the European ecosystem,” Manzoni revealed.