Food tech is booming in Europe and is growing exponentially. In 2020, €3 billion went into European food tech companies (State of European Tech Report, March 2021), and the pandemic has accelerated demand as consumers have shifted to grocery delivery. The industry has also been affected by the rise of direct-to-consumer food brands. Finally, the pandemic created a boom in interest in healthy food and nutrition to improve people's immunity to COVID-19.
So it’s perhaps understandable that European food tech VC Five Seasons Ventures has announced the final closing of a €180 million second fund. Their first fund was €77 million, so this next fund is a sizeable improvement and reflects what’s going on in food tech.
The new will continue making Series A and B investments into European food tech companies, with, says the company “an emphasis on fast-growing consumer-focused food with a quantifiable environmental or social impact.”
Five Seasons says it’s aiming to prove that food tech startups can grow as fast as "normal" tech startups, with its Fund I portfolio on track to reach a combined revenue of more than €350 million in 2021, it says. One such company, Air Up, has hit a €100 million revenue run rate in less than two years, says Five Seasons. Air-Up sells a reusable smart water bottle that “delivers flavor via retro-nasal scent”.
Ivan Farneti, co-founding partner of Five Seasons Ventures, said: “There’s no doubt that food tech is experiencing a boom in Europe right now. When we launched Five Seasons in 2018, we were the first VC to focus on food tech in Europe, and we believe we contributed to making this an attractive asset class. Fund II was quickly oversubscribed as more investors wanted to get exposed to European food tech, seeking high growth and impact.”
Five seasons has also backed Butternut Box, a direct-to-consumer fresh dog food company in Europe, and THIS, plant-based meat alternative. The VC’s team has also grown to nine, with the appointment of a head of Impact and Sustainable Investing.
Fund II has so far invested in female wellness supplements her1, and vly, a company using peas to provide a plant-based milk alternative filled with protein. It’s also invested in Barkyn and The Nu Company.
In total, Five Seasons Ventures has backed 14 companies across six European countries: Germany, France, Italy, Portugal, Switzerland and the U.K.
In an interview, Niccolo Manzoni, co-founding partner of Five Seasons Ventures, added: “If you look at the amount of capital that has gone into food tech ventures in the last two years it's grown from €1 billion to €3 billion just in Europe, and it's bound to continue growing because there are lots of companies that have raised good money and have grown really fast.”
“Secondly, it also has the Impact side,” he said. “Two of the most pressing issues the world is facing today are human health and climate change. And that's exactly the kind of companies we look for. If you look across our portfolio, for example, last year we saved about 2 million kilograms of food waste. The products that our companies sell are designed to improve health and well being… There's a huge amount of things you can do in food tech which you cannot do in SaaS, for example.”