Singapore-based ID Capital backs startups that build sustainable food solutions
In a world where foodtech is predominately defined by online delivery, Singapore-based boutique investment and consulting company ID Capital is helping startups build sustainable food solutions.
For 45-year-old Isabelle Decitre, the idea for ID Capital came about as a result of several trials and errors. Four years ago, Isabelle had moved back to Singapore, and having worked in the wines and spirits business as CMO of Hennessy, the company's interests in agriculture made her aware of the limitations of the current food system, which needed sustainable options for optimisation.
In the face of a growing population displaying evolving food patterns, dealing efficiently with food wastage would go a long way in mitigating scarcities. “Just thinking of the 25-30 percent food wasted across the supply chain, increasing obesity levels and malnourishment made me believe that technology would help enable disruption,” explains Isabelle.
However, Isabelle’s eureka moment came when she realised that the main challenge would be in scaling a fund like this. After checking out a number of investment sectors, she decided to focus on venture capital investment in the sustainable food solutions domain in the APAC region.
“I realised a number of investors and MNC players were willing to be active in this domain -- call it impact investment or corporate venture, depending on the case. But in a large and fragmented region, there were just no outlets to source relevant investment opportunities, and startups struggle to find venture capital investors.”
While doing her research, Isabelle found that for most Asian countries, it was one or the other missing element that held the sustainable food solutions domain back: while in India there are amazing initiatives in this domain, venture capital funding is scarce, but, on the other hand, in Singapore, where funding is available, this investment vertical has not caught on yet.
“Coming from the industry, albeit a different one, it was important for me to develop domain expertise and not just a shallow understanding of the agri-food system. The sector of agriculture and food technologies is both an area of personal interest and a sector that is ripe for disruption. That’s where I think I can make a difference,” Isabelle notes.
And the idea for Future Food Asia, a part of ID Capital, took shape. It is dedicated to fostering startup-driven innovations bringing more sustainability in the food system in the Asia Pacific region.
The pivotal moment came when the Economic Development Board of Singapore came on board, followed by agribusiness leader ADM, and health and nutrition company DSM.
ID Capital does deal-by-deal investments, typically in startups at pre-Series A and Series A stage startups in Asia. The focus is on those who are bringing disruptive innovations that serve to make the food system more sustainable.
The scope of interest embraces the entire food value chain, from agriculture and agricultural inputs, to ingredients and food processing. Generic food e-commerce startups would not be considered unless they came up with a kind of farm-to-fork proposition. The size of each investment is driven by the relevance of the opportunities the companies can be exposed to.
Isabelle notes that the company has been able to make direct investments as well as scout for innovation for a larger set and type of stakeholders. “We have a domain expertise in agritech and foodtech and a supporting network of experts, and we are the only entity covering Asia Pacific in this domain,” she adds.
The revenue model is based on grants from government agencies, sponsorship from industry players, and investors who want to get to know promising startups/technologies early in their development cycle.
The team launched the first edition of Future Food Asia Award last November, which will culminate in an award event this May. “We see this event as an annual rendezvous going forward. Whilst we are busy screening startup applications we are also discussing with various parties on the best acceleration model for this nascent vertical,” says Isabelle.
Isabelle believes that there are specificities in agritech and foodtech startups that make traditional incubators and accelerator less relevant. ID Capital is working on a couple of bi-country programmes in Asia and will start investments in companies soon.
The Harvard Business Review states there is an intrinsic difference in the way social entrepreneurs and commercial entrepreneurs think. The journal notes that when social entrepreneurs say they ‘work themselves out of a job’, they aren’t making a statement to sound cool. They are stating the obvious; they want to solve a fundamental issue or problem.
Currently, there are few funds that focus on social impact and businesses. However, funds like Unitus Seed Fund, GBFund and ASPADA Ventures do take note of unique businesses that aren’t necessarily like e-commerce or online businesses.
ID Capital is a small team of four dedicated to meeting the challenges to creating a better and more sustainable food system.
“We needed to approach this as a business to be able to scale it up and have some impact. There is often a lot of romance around the idea of working in a startup company, with startups and on innovation,” says Isabelle.