Venture capitalists are hungry to invest in food startups

An array of food startups are seeing growing investment from Silicon Valley VC firms.
Written by Tyler Falk, Contributor

When you read articles, like this one, on the science of the junk food industry, its easy to become pessimistic about the food industry in the United States. But some venture capitalists and food startups are looking to shake up an industry where a company can make $3 billion a year selling Cheetos and Doritos. The New York Times reports:

In some cases, the goal is to connect restaurants with food purveyors, or to create on-demand delivery services from local farms, or ready-to-cook dinner kits. In others, the goal is to invent new foods, like creating cheese, meat and egg substitutes from plants. Since this is Silicon Valley money, though, the ultimate goal is often nothing short of grand: transforming the food industry.

In a recent report, CB Insights says that last year venture capital investment in food technology reached nearly $350 million. That's a 7.6 percent increase from 2011 and a major increase from less than $50 million in 2008. Plus, the number of investment deals shot up 37 percent from 2011 to 2012. That's only a fraction of the $30 billion spent by Silicon Valley investment firms annually -- and far less than the $3 billion a company like Frito-Lay brings in -- but it's definitely a growing sector for investors.

So who are some of these new companies? They vary in their services and missions. Hampton Creek Foods is trying to create new egg substitutes. ChowNow is an online restaurant ordering company. Unreal wants to transform candies into something healthier and Plated wants to transform your next dinner.

But these aren't just big ideas; there's big money backing them up.

Venture Capitalists Are Making Bigger Bets on Food Start-Ups [New York Times]

Photo: Plated

This post was originally published on Smartplanet.com

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