FoodTech in Israel: what makes the country a top startup destination?

FoodTech in Israel: what makes the country a top startup destination?

By
Louise Burfitt
December 14, 2021

With thanks to Amir Zaidman (The Kitchen Hub) and Ofek Ron (Plantish) for their inputs on this piece.

🇮🇱 What is it? 

  • 9.5 million people call this tiny state in western Asia or eastern Europe (depending on who you ask) home. And yet this small nation, Israel, punches far above its weight when it comes to food and agritech.  
  • Perhaps that’s not surprising when you consider that this nation on the shores of the Red Sea and the Mediterranean has never known genuine peace and is mostly home to hard-grafting first- and second-generation immigrants. 
  • But why food and agritech? Why now? From designer proteins to 3D meat, let’s find out the secret ingredients behind Israel’s foodtech success…

🤔 Tell me more…

  • While ‘food tech’ is a relatively new term, Israel has been making waves in related fields for at least thirty years, with companies like Enzymotec and Algatechnologies. That’s despite the fact it’s a young country, has no natural resources, and is politically volatile.
  • And beginning in the mid 2010s, Israel has gained a reputation as a leader in food and agritech, with a new wave of major companies sprouting up ahead of the foodtech boom including TIPA, Hinoman and Biomilk. So how did a country without natural resources and a history of unrest become a self-styled Startup Nation?

🤷‍♂️ Why?

  • Israel has been rocked by bouts of unrest for most of its history. One thing to come out of this is a dogged devil-may-care attitude among its mostly-immigrant population - leading to a sense of innovation, tenacity,  and that classic carpe-diem initiative common to both entrepreneurs and its citizens at large.
  • The state has also long been home to pioneering academic institutions that work hard on agri-foodtech, from Technion to the Hebrew University. The country has a strong, academic foundation based on science that aids the startup ecosystem, provides amazing talent and infrastructure, and produces plenty of novel ideas. 
  • And the same goes for the startups themselves: Israel has been an innovation hub since the 1990s. The country boasts so many startups it is second only to Silicon Valley. Accordingly, Israel comes near the top on patents per person, VC investments per capita and more - making it an attractive place for entrepreneurs and engineers alike. 
  • Amir Zaidman, from Israel’s The Kitchen FoodTech Hub, personally sees one primary factor driving the Israeli boom: ‘I think the most important one is the "call to action" we all feel, with regards to challenges of the existing global food system. Some will join or establish an NGO, others will advocate or change their life choices. Israelis do startups. With the entrepreneurial environment and culture in Israel, this is the obvious way of action. Add to that a strong sense of community and you have fertile ground for a simmering FoodTech scene.’ 

📈 The figures

  • Start Up Nation includes 259 enterprises tagged under the category ‘foodtech’ and a further 443 with the label ‘agtech’. 
  • It is also pretty impressive that Israel has nearly as many unicorns as the European Union given its population almost 50 times smaller.

🔍 How is it shaping up?

  • Israel is excelling in several areas, particularly alt protein and plant-based innovations. Between 2018 and 2020, funding for alt protein companies grew eightfold, from $14m to $114m
  • Aleph Farms, Future Meat Technologies, Redefine Meat and Meat. The End are just a few of the leading companies in the Israeli alternative meat sector. There’s even murmurings that Future Meat is soon to open a cultivated meat factory in the US, following a mega $300m funding round. 
  • Alternative dairy is also heating up with Imagindairy’s planned 2023 launch and recent $13m seed funding round. Remilk and Biomilk (now named WILK), which went public this year, are also leaders in this space.
  • In related developments, novel proteins are also big, big news in Israel right now. Whether it’s mycelium (Mush Foods), chickpeas (InnovoPro) or microalgae (Brevel), there’s a genuine wealth of startups in this space. 
  • TIPA leads the pack when it comes to packaging. See what we did there? 
  • Personalisation in nutrition is also a growing trend. DayTwo provides personalised nutrition based on gut microbiome analysis while AlgoCart offers personalised product recommendations to drive better health outcomes. Qurate.tech and Lumen are also developing in this space, with personalised recipes and a nutrition app. 
  • The alt sugar market, meanwhile, is yet another niche flourishing in Israel with low-sugar juices (Better Juice, BlueTree), sugar substitutes (BT Sweet) and even redesigned sugar crystals (DouxMatok) on the up. Meanwhile, Amai Proteins is working on sweet designer proteins to reduce sugar in foods.
  • Incubators and accelerators are helping to drive growth by supporting new startups and fostering collaboration and networking, as well as funding rounds. The Kitchen FoodTech Hub, EIT FAN accelerator, Fresh Start Incubator and Trendlines are central to the foodtech sphere in Israel. 

👀 Who:

🌾 Agritech 

🍲 Foodtech

📈 Publicly traded Israeli FoodTech startups 

  • Bio Milk (cultured milk and breastmilk)
  • Else Nutrition (plant-based alternatives to baby and toddler formula)
  • Flying Spark (sustainable protein made from fruit flies)
  • Impacx (smart packaging)
  • MeaTech (enabling structured meat products through cell ag and 3D printing)
  • Nextferm (fermented protein)
  • NG Solutions (kids’ nutrition)
  • SavorEat (robot chef that delivers customized plant-based meat alternatives)

🔎 Read: Israel's 50+ Unicorns, Soonicorns and Futurecorns

Redefine Meat

🥩 Case study: Redefine Meat

  • Redefine Meat™’s slogan is ‘New Meat, No Compromise’. The company has developed an industrial-grade, patented 3D printing process to mimic the texture of genuine meat. 
  • And not just any meat. Alongside burgers and mince, the company is experimenting with whole cuts like beef and lamb flank, both coming soon. That’s a big breakthrough, as whole-cut meat has typically been a major sticking point for the alt-meat market.
  • Founder Eshchar Ben-Shitrit grew up devouring meat, but parenthood changed him. Suddenly, he could no longer stomach the idea of eating an animal’s child. And in 2018, his company was born. 
  • By 2019, his fledgling team had closed a $6 million seed round to finalize the development of their proprietary alternative meat 3D printer. 
  • In 2020, the company launched its first 3D printed beef steak.
  • This was followed in 2021 by a $29m Series A round, bringing the company closer to its 2030 aim of becoming the greatest alt meat company worldwide with another huge round rumoured to be in the making. 
  • The pros of this alt meat are many: like most alt meat, it’s more sustainable, better for our health, cheaper to produce at scale than conventional meat. 
  • The company hasn’t disclosed which proteins it uses, but it’s thought to be a mix of soy and pea. Either way, insiders says its highly nutritious and natural. And Marco Pierre White has given it his seal of approval. 
  • In addition to launching products in the UK, Germany and the Netherlands imminently, the team also plans to sell their machines and ingredient packs to meat processing partners, allowing them to print their own products to sell on to retailers and restaurants.
  • Redefine Meat™ products are currently available in select restaurants in Israel. The company is committed to constantly expanding the availability of its products and soon they will be available in hotels and in catering services. 

🍭 Case study: DouxMatok

  • DouxMatok, meanwhile, is riding the alt-sugar trend and has developed a patented solution to reduce sugar in its products by 40%. How? By redesigning the sugar crystal itself.
  • The Israeli start-up has called its rebranded sugar Incredo and as it’s made with real cane sugar, the taste profile remains the same as real sugar in products it’s used in.
  • In blind tastings, two-thirds of consumers said they preferred the biscuits made with Incredo sugar to those made with the real thing.
  • DouxMatok’s sugar crystal works by allowing sugar to be delivered to the taste receptors in our bodies more efficiently. Our brains interpret this as a higher level of sugar in food. That means there’s no sacrificing that delicious sweet taste, but the health risks of consuming too much of the sweet stuff are reduced.
  • In 2020, the company partnered with Canadian sugar company Rogers & Lantic Sugar to produce and distribute its rebranded sugar product. 
  • DouxMatok’s sugar is already on shelves at the Israeli bakery chain Piece of Cake in the form of freshly baked cookies.
  • In 2021 the startup signed its first commercial partnership outside of Israel with Italian company HiFood.
DouxMatox

💸 What makes Israel attractive to FoodTech investors?

  • We chatted with Beni Nofech, one of Israel's leading investors (portfolio includes Mush Food, Plantish, Alfred's FoodTech, SuperMeat) based out of Tel-Aviv to find out.
  • "As a new-protein Foodtech investor I focus almost exclusively on Israeli startups because of two main reasons: A) Geography: Israel is a very small country, with the vast majority of our ecosystem just a short commute away - even in 2021 - being physically and culturally close to the companies is a HUGE plus - especially for investors who want to really be hands-on. B) Israel is already a Foodtech nation - we have a thriving, robust innovation ecosystem, which is pro-actively backed by our government, and trusted by global investors for decades now."
  • "We have leading Agritech, Biotech and Medtech industries over here which are all relevant for Foodtech, and already supported by world-renowned academic institutions which generate a constant flow of eager and skilled entrepreneurs and researchers, along with breakthrough academic research that often gets commercialized. In the short-to-medium run - I’m betting on Israeli foodtech to play a leading role in accelerating the global new protein industry."

🤷 What more could be done to drive the Israel FoodTech scene?

  • "Much more needs to be done in order for Israel to maintain its leading position in the Foodtech industry for the longer run" says Beni "as GFI Israel points out - 3 key areas of focus need to be addressed:- Reinforcing academia (more tech & more skilled people)- Setting up pilot-scale infrastructure to support scale-up and early-industrialization processes of younger startups- The establishment of clear and efficient new-food regulation guidelines to allow Israeli startups to develop and commercialise in Israel before being forced to set up shop elsewhere."

👍 The good

  • Israel is not a big place, geographically or demographically. That means it has a strong community of entrepreneurs in the space. And it also means most foodtech companies are situated in a small neighbourhood (Rehovot), facilitating collaboration between them. 
  • Its location also makes it attractive, says Plantish CEO Ofek Ron, because it is a convenient middle point between the USA and Asia.
  • Ofek also credits the culture as a strong driver of the foodtech growth "Israel has an entrepreneurial environment - people are accepting failure and are not afraid to talk about the hard stuff, people are happy to be a part of a risky thing when there is an award at the end of it, people love the action of startup life."
  • The Kitchen Hub’s VP of Business Development Amir Zaidman believes the country’s global outlook is an important factor in its success: ‘Due to the small local market, Israeli FoodTech startups, by definition, are "born global", considering the most attractive market for their product from day one. The most attractive market isn't necessarily the biggest. It can be the one with lower regulatory hurdles, a favorable culture or something else, but rest assured that all this would be considered as a part of the plan. I would say the attractiveness is a combination of high-quality human capital and a global approach.’

👎 The bad

  • Despite its identity as a Startup Nation, Israel still lacks production infrastructure, so many companies are forced to move their operations overseas when scaling up. 
  • Adding to the above, some of Israel's biggest success stories have also picked up and moved their headquarters stateside for a number of reasons - be that access to later stage capital or to be closer to their target market. See: Taranis, DayTwo, Ukko, BeeHero, Fabric and more.
  • The country’s downfall may be the lack of a skilled workforce - while bringing in staff from abroad is a quick fix, it won’t work in the long term. More food scientists and chemists are needed to support the industry as it matures, said Plantish’s Ron.
  • Amazingly, more could still be done to support foodtech in Israel. Zaidman, said, ‘There are hardly any FoodTech VCs in Israel and generalist VCs have only recently started looking seriously into the space. Seed money is invested mostly by incubators and private investors. Later rounds are led, for the most part, by non-Israeli VCs. This is surprising because Israel is an advanced VC market with well over a 100 local VCs and several billions in dry powder.’
  • And while alternative proteins and plant-based meats are big business in the country, the delivery, e-grocery and meal kit sector is small and underdeveloped. However, that does of course present a great new opportunity for entrepreneurs in the space. 

 💡 The bottom line

  • From alt proteins to novel sugars, personalised nutrition to microalgae, Israel is advancing food and agritech on many fronts. 
  • Now the country is at a pivotal moment, poised to mature as a FoodTech Nation - if it can acquire the talent it needs, make inroads in underproved fields and beef up its homegrown investment funds. But the middle-eastern state certainly already its homegrown title as a Startup Nation. 

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With thanks to Amir Zaidman (The Kitchen Hub) and Ofek Ron (Plantish) for their inputs on this piece.

🇮🇱 What is it? 

  • 9.5 million people call this tiny state in western Asia or eastern Europe (depending on who you ask) home. And yet this small nation, Israel, punches far above its weight when it comes to food and agritech.  
  • Perhaps that’s not surprising when you consider that this nation on the shores of the Red Sea and the Mediterranean has never known genuine peace and is mostly home to hard-grafting first- and second-generation immigrants. 
  • But why food and agritech? Why now? From designer proteins to 3D meat, let’s find out the secret ingredients behind Israel’s foodtech success…

🤔 Tell me more…

  • While ‘food tech’ is a relatively new term, Israel has been making waves in related fields for at least thirty years, with companies like Enzymotec and Algatechnologies. That’s despite the fact it’s a young country, has no natural resources, and is politically volatile.
  • And beginning in the mid 2010s, Israel has gained a reputation as a leader in food and agritech, with a new wave of major companies sprouting up ahead of the foodtech boom including TIPA, Hinoman and Biomilk. So how did a country without natural resources and a history of unrest become a self-styled Startup Nation?

🤷‍♂️ Why?

  • Israel has been rocked by bouts of unrest for most of its history. One thing to come out of this is a dogged devil-may-care attitude among its mostly-immigrant population - leading to a sense of innovation, tenacity,  and that classic carpe-diem initiative common to both entrepreneurs and its citizens at large.
  • The state has also long been home to pioneering academic institutions that work hard on agri-foodtech, from Technion to the Hebrew University. The country has a strong, academic foundation based on science that aids the startup ecosystem, provides amazing talent and infrastructure, and produces plenty of novel ideas. 
  • And the same goes for the startups themselves: Israel has been an innovation hub since the 1990s. The country boasts so many startups it is second only to Silicon Valley. Accordingly, Israel comes near the top on patents per person, VC investments per capita and more - making it an attractive place for entrepreneurs and engineers alike. 
  • Amir Zaidman, from Israel’s The Kitchen FoodTech Hub, personally sees one primary factor driving the Israeli boom: ‘I think the most important one is the "call to action" we all feel, with regards to challenges of the existing global food system. Some will join or establish an NGO, others will advocate or change their life choices. Israelis do startups. With the entrepreneurial environment and culture in Israel, this is the obvious way of action. Add to that a strong sense of community and you have fertile ground for a simmering FoodTech scene.’ 

📈 The figures

  • Start Up Nation includes 259 enterprises tagged under the category ‘foodtech’ and a further 443 with the label ‘agtech’. 
  • It is also pretty impressive that Israel has nearly as many unicorns as the European Union given its population almost 50 times smaller.

🔍 How is it shaping up?

  • Israel is excelling in several areas, particularly alt protein and plant-based innovations. Between 2018 and 2020, funding for alt protein companies grew eightfold, from $14m to $114m
  • Aleph Farms, Future Meat Technologies, Redefine Meat and Meat. The End are just a few of the leading companies in the Israeli alternative meat sector. There’s even murmurings that Future Meat is soon to open a cultivated meat factory in the US, following a mega $300m funding round. 
  • Alternative dairy is also heating up with Imagindairy’s planned 2023 launch and recent $13m seed funding round. Remilk and Biomilk (now named WILK), which went public this year, are also leaders in this space.
  • In related developments, novel proteins are also big, big news in Israel right now. Whether it’s mycelium (Mush Foods), chickpeas (InnovoPro) or microalgae (Brevel), there’s a genuine wealth of startups in this space. 
  • TIPA leads the pack when it comes to packaging. See what we did there? 
  • Personalisation in nutrition is also a growing trend. DayTwo provides personalised nutrition based on gut microbiome analysis while AlgoCart offers personalised product recommendations to drive better health outcomes. Qurate.tech and Lumen are also developing in this space, with personalised recipes and a nutrition app. 
  • The alt sugar market, meanwhile, is yet another niche flourishing in Israel with low-sugar juices (Better Juice, BlueTree), sugar substitutes (BT Sweet) and even redesigned sugar crystals (DouxMatok) on the up. Meanwhile, Amai Proteins is working on sweet designer proteins to reduce sugar in foods.
  • Incubators and accelerators are helping to drive growth by supporting new startups and fostering collaboration and networking, as well as funding rounds. The Kitchen FoodTech Hub, EIT FAN accelerator, Fresh Start Incubator and Trendlines are central to the foodtech sphere in Israel. 

👀 Who:

🌾 Agritech 

🍲 Foodtech

📈 Publicly traded Israeli FoodTech startups 

  • Bio Milk (cultured milk and breastmilk)
  • Else Nutrition (plant-based alternatives to baby and toddler formula)
  • Flying Spark (sustainable protein made from fruit flies)
  • Impacx (smart packaging)
  • MeaTech (enabling structured meat products through cell ag and 3D printing)
  • Nextferm (fermented protein)
  • NG Solutions (kids’ nutrition)
  • SavorEat (robot chef that delivers customized plant-based meat alternatives)

🔎 Read: Israel's 50+ Unicorns, Soonicorns and Futurecorns

Redefine Meat

🥩 Case study: Redefine Meat

  • Redefine Meat™’s slogan is ‘New Meat, No Compromise’. The company has developed an industrial-grade, patented 3D printing process to mimic the texture of genuine meat. 
  • And not just any meat. Alongside burgers and mince, the company is experimenting with whole cuts like beef and lamb flank, both coming soon. That’s a big breakthrough, as whole-cut meat has typically been a major sticking point for the alt-meat market.
  • Founder Eshchar Ben-Shitrit grew up devouring meat, but parenthood changed him. Suddenly, he could no longer stomach the idea of eating an animal’s child. And in 2018, his company was born. 
  • By 2019, his fledgling team had closed a $6 million seed round to finalize the development of their proprietary alternative meat 3D printer. 
  • In 2020, the company launched its first 3D printed beef steak.
  • This was followed in 2021 by a $29m Series A round, bringing the company closer to its 2030 aim of becoming the greatest alt meat company worldwide with another huge round rumoured to be in the making. 
  • The pros of this alt meat are many: like most alt meat, it’s more sustainable, better for our health, cheaper to produce at scale than conventional meat. 
  • The company hasn’t disclosed which proteins it uses, but it’s thought to be a mix of soy and pea. Either way, insiders says its highly nutritious and natural. And Marco Pierre White has given it his seal of approval. 
  • In addition to launching products in the UK, Germany and the Netherlands imminently, the team also plans to sell their machines and ingredient packs to meat processing partners, allowing them to print their own products to sell on to retailers and restaurants.
  • Redefine Meat™ products are currently available in select restaurants in Israel. The company is committed to constantly expanding the availability of its products and soon they will be available in hotels and in catering services. 

🍭 Case study: DouxMatok

  • DouxMatok, meanwhile, is riding the alt-sugar trend and has developed a patented solution to reduce sugar in its products by 40%. How? By redesigning the sugar crystal itself.
  • The Israeli start-up has called its rebranded sugar Incredo and as it’s made with real cane sugar, the taste profile remains the same as real sugar in products it’s used in.
  • In blind tastings, two-thirds of consumers said they preferred the biscuits made with Incredo sugar to those made with the real thing.
  • DouxMatok’s sugar crystal works by allowing sugar to be delivered to the taste receptors in our bodies more efficiently. Our brains interpret this as a higher level of sugar in food. That means there’s no sacrificing that delicious sweet taste, but the health risks of consuming too much of the sweet stuff are reduced.
  • In 2020, the company partnered with Canadian sugar company Rogers & Lantic Sugar to produce and distribute its rebranded sugar product. 
  • DouxMatok’s sugar is already on shelves at the Israeli bakery chain Piece of Cake in the form of freshly baked cookies.
  • In 2021 the startup signed its first commercial partnership outside of Israel with Italian company HiFood.
DouxMatox

💸 What makes Israel attractive to FoodTech investors?

  • We chatted with Beni Nofech, one of Israel's leading investors (portfolio includes Mush Food, Plantish, Alfred's FoodTech, SuperMeat) based out of Tel-Aviv to find out.
  • "As a new-protein Foodtech investor I focus almost exclusively on Israeli startups because of two main reasons: A) Geography: Israel is a very small country, with the vast majority of our ecosystem just a short commute away - even in 2021 - being physically and culturally close to the companies is a HUGE plus - especially for investors who want to really be hands-on. B) Israel is already a Foodtech nation - we have a thriving, robust innovation ecosystem, which is pro-actively backed by our government, and trusted by global investors for decades now."
  • "We have leading Agritech, Biotech and Medtech industries over here which are all relevant for Foodtech, and already supported by world-renowned academic institutions which generate a constant flow of eager and skilled entrepreneurs and researchers, along with breakthrough academic research that often gets commercialized. In the short-to-medium run - I’m betting on Israeli foodtech to play a leading role in accelerating the global new protein industry."

🤷 What more could be done to drive the Israel FoodTech scene?

  • "Much more needs to be done in order for Israel to maintain its leading position in the Foodtech industry for the longer run" says Beni "as GFI Israel points out - 3 key areas of focus need to be addressed:- Reinforcing academia (more tech & more skilled people)- Setting up pilot-scale infrastructure to support scale-up and early-industrialization processes of younger startups- The establishment of clear and efficient new-food regulation guidelines to allow Israeli startups to develop and commercialise in Israel before being forced to set up shop elsewhere."

👍 The good

  • Israel is not a big place, geographically or demographically. That means it has a strong community of entrepreneurs in the space. And it also means most foodtech companies are situated in a small neighbourhood (Rehovot), facilitating collaboration between them. 
  • Its location also makes it attractive, says Plantish CEO Ofek Ron, because it is a convenient middle point between the USA and Asia.
  • Ofek also credits the culture as a strong driver of the foodtech growth "Israel has an entrepreneurial environment - people are accepting failure and are not afraid to talk about the hard stuff, people are happy to be a part of a risky thing when there is an award at the end of it, people love the action of startup life."
  • The Kitchen Hub’s VP of Business Development Amir Zaidman believes the country’s global outlook is an important factor in its success: ‘Due to the small local market, Israeli FoodTech startups, by definition, are "born global", considering the most attractive market for their product from day one. The most attractive market isn't necessarily the biggest. It can be the one with lower regulatory hurdles, a favorable culture or something else, but rest assured that all this would be considered as a part of the plan. I would say the attractiveness is a combination of high-quality human capital and a global approach.’

👎 The bad

  • Despite its identity as a Startup Nation, Israel still lacks production infrastructure, so many companies are forced to move their operations overseas when scaling up. 
  • Adding to the above, some of Israel's biggest success stories have also picked up and moved their headquarters stateside for a number of reasons - be that access to later stage capital or to be closer to their target market. See: Taranis, DayTwo, Ukko, BeeHero, Fabric and more.
  • The country’s downfall may be the lack of a skilled workforce - while bringing in staff from abroad is a quick fix, it won’t work in the long term. More food scientists and chemists are needed to support the industry as it matures, said Plantish’s Ron.
  • Amazingly, more could still be done to support foodtech in Israel. Zaidman, said, ‘There are hardly any FoodTech VCs in Israel and generalist VCs have only recently started looking seriously into the space. Seed money is invested mostly by incubators and private investors. Later rounds are led, for the most part, by non-Israeli VCs. This is surprising because Israel is an advanced VC market with well over a 100 local VCs and several billions in dry powder.’
  • And while alternative proteins and plant-based meats are big business in the country, the delivery, e-grocery and meal kit sector is small and underdeveloped. However, that does of course present a great new opportunity for entrepreneurs in the space. 

 💡 The bottom line

  • From alt proteins to novel sugars, personalised nutrition to microalgae, Israel is advancing food and agritech on many fronts. 
  • Now the country is at a pivotal moment, poised to mature as a FoodTech Nation - if it can acquire the talent it needs, make inroads in underproved fields and beef up its homegrown investment funds. But the middle-eastern state certainly already its homegrown title as a Startup Nation. 

How did you like today's Trends?

Love it 😁 Meh 😐 Hate it 🙁

With thanks to Amir Zaidman (The Kitchen Hub) and Ofek Ron (Plantish) for their inputs on this piece.

🇮🇱 What is it? 

  • 9.5 million people call this tiny state in western Asia or eastern Europe (depending on who you ask) home. And yet this small nation, Israel, punches far above its weight when it comes to food and agritech.  
  • Perhaps that’s not surprising when you consider that this nation on the shores of the Red Sea and the Mediterranean has never known genuine peace and is mostly home to hard-grafting first- and second-generation immigrants. 
  • But why food and agritech? Why now? From designer proteins to 3D meat, let’s find out the secret ingredients behind Israel’s foodtech success…

🤔 Tell me more…

  • While ‘food tech’ is a relatively new term, Israel has been making waves in related fields for at least thirty years, with companies like Enzymotec and Algatechnologies. That’s despite the fact it’s a young country, has no natural resources, and is politically volatile.
  • And beginning in the mid 2010s, Israel has gained a reputation as a leader in food and agritech, with a new wave of major companies sprouting up ahead of the foodtech boom including TIPA, Hinoman and Biomilk. So how did a country without natural resources and a history of unrest become a self-styled Startup Nation?

🤷‍♂️ Why?

  • Israel has been rocked by bouts of unrest for most of its history. One thing to come out of this is a dogged devil-may-care attitude among its mostly-immigrant population - leading to a sense of innovation, tenacity,  and that classic carpe-diem initiative common to both entrepreneurs and its citizens at large.
  • The state has also long been home to pioneering academic institutions that work hard on agri-foodtech, from Technion to the Hebrew University. The country has a strong, academic foundation based on science that aids the startup ecosystem, provides amazing talent and infrastructure, and produces plenty of novel ideas. 
  • And the same goes for the startups themselves: Israel has been an innovation hub since the 1990s. The country boasts so many startups it is second only to Silicon Valley. Accordingly, Israel comes near the top on patents per person, VC investments per capita and more - making it an attractive place for entrepreneurs and engineers alike. 
  • Amir Zaidman, from Israel’s The Kitchen FoodTech Hub, personally sees one primary factor driving the Israeli boom: ‘I think the most important one is the "call to action" we all feel, with regards to challenges of the existing global food system. Some will join or establish an NGO, others will advocate or change their life choices. Israelis do startups. With the entrepreneurial environment and culture in Israel, this is the obvious way of action. Add to that a strong sense of community and you have fertile ground for a simmering FoodTech scene.’ 

📈 The figures

  • Start Up Nation includes 259 enterprises tagged under the category ‘foodtech’ and a further 443 with the label ‘agtech’. 
  • It is also pretty impressive that Israel has nearly as many unicorns as the European Union given its population almost 50 times smaller.

🔍 How is it shaping up?

  • Israel is excelling in several areas, particularly alt protein and plant-based innovations. Between 2018 and 2020, funding for alt protein companies grew eightfold, from $14m to $114m
  • Aleph Farms, Future Meat Technologies, Redefine Meat and Meat. The End are just a few of the leading companies in the Israeli alternative meat sector. There’s even murmurings that Future Meat is soon to open a cultivated meat factory in the US, following a mega $300m funding round. 
  • Alternative dairy is also heating up with Imagindairy’s planned 2023 launch and recent $13m seed funding round. Remilk and Biomilk (now named WILK), which went public this year, are also leaders in this space.
  • In related developments, novel proteins are also big, big news in Israel right now. Whether it’s mycelium (Mush Foods), chickpeas (InnovoPro) or microalgae (Brevel), there’s a genuine wealth of startups in this space. 
  • TIPA leads the pack when it comes to packaging. See what we did there? 
  • Personalisation in nutrition is also a growing trend. DayTwo provides personalised nutrition based on gut microbiome analysis while AlgoCart offers personalised product recommendations to drive better health outcomes. Qurate.tech and Lumen are also developing in this space, with personalised recipes and a nutrition app. 
  • The alt sugar market, meanwhile, is yet another niche flourishing in Israel with low-sugar juices (Better Juice, BlueTree), sugar substitutes (BT Sweet) and even redesigned sugar crystals (DouxMatok) on the up. Meanwhile, Amai Proteins is working on sweet designer proteins to reduce sugar in foods.
  • Incubators and accelerators are helping to drive growth by supporting new startups and fostering collaboration and networking, as well as funding rounds. The Kitchen FoodTech Hub, EIT FAN accelerator, Fresh Start Incubator and Trendlines are central to the foodtech sphere in Israel. 

👀 Who:

🌾 Agritech 

🍲 Foodtech

📈 Publicly traded Israeli FoodTech startups 

  • Bio Milk (cultured milk and breastmilk)
  • Else Nutrition (plant-based alternatives to baby and toddler formula)
  • Flying Spark (sustainable protein made from fruit flies)
  • Impacx (smart packaging)
  • MeaTech (enabling structured meat products through cell ag and 3D printing)
  • Nextferm (fermented protein)
  • NG Solutions (kids’ nutrition)
  • SavorEat (robot chef that delivers customized plant-based meat alternatives)

🔎 Read: Israel's 50+ Unicorns, Soonicorns and Futurecorns

Redefine Meat

🥩 Case study: Redefine Meat

  • Redefine Meat™’s slogan is ‘New Meat, No Compromise’. The company has developed an industrial-grade, patented 3D printing process to mimic the texture of genuine meat. 
  • And not just any meat. Alongside burgers and mince, the company is experimenting with whole cuts like beef and lamb flank, both coming soon. That’s a big breakthrough, as whole-cut meat has typically been a major sticking point for the alt-meat market.
  • Founder Eshchar Ben-Shitrit grew up devouring meat, but parenthood changed him. Suddenly, he could no longer stomach the idea of eating an animal’s child. And in 2018, his company was born. 
  • By 2019, his fledgling team had closed a $6 million seed round to finalize the development of their proprietary alternative meat 3D printer. 
  • In 2020, the company launched its first 3D printed beef steak.
  • This was followed in 2021 by a $29m Series A round, bringing the company closer to its 2030 aim of becoming the greatest alt meat company worldwide with another huge round rumoured to be in the making. 
  • The pros of this alt meat are many: like most alt meat, it’s more sustainable, better for our health, cheaper to produce at scale than conventional meat. 
  • The company hasn’t disclosed which proteins it uses, but it’s thought to be a mix of soy and pea. Either way, insiders says its highly nutritious and natural. And Marco Pierre White has given it his seal of approval. 
  • In addition to launching products in the UK, Germany and the Netherlands imminently, the team also plans to sell their machines and ingredient packs to meat processing partners, allowing them to print their own products to sell on to retailers and restaurants.
  • Redefine Meat™ products are currently available in select restaurants in Israel. The company is committed to constantly expanding the availability of its products and soon they will be available in hotels and in catering services. 

🍭 Case study: DouxMatok

  • DouxMatok, meanwhile, is riding the alt-sugar trend and has developed a patented solution to reduce sugar in its products by 40%. How? By redesigning the sugar crystal itself.
  • The Israeli start-up has called its rebranded sugar Incredo and as it’s made with real cane sugar, the taste profile remains the same as real sugar in products it’s used in.
  • In blind tastings, two-thirds of consumers said they preferred the biscuits made with Incredo sugar to those made with the real thing.
  • DouxMatok’s sugar crystal works by allowing sugar to be delivered to the taste receptors in our bodies more efficiently. Our brains interpret this as a higher level of sugar in food. That means there’s no sacrificing that delicious sweet taste, but the health risks of consuming too much of the sweet stuff are reduced.
  • In 2020, the company partnered with Canadian sugar company Rogers & Lantic Sugar to produce and distribute its rebranded sugar product. 
  • DouxMatok’s sugar is already on shelves at the Israeli bakery chain Piece of Cake in the form of freshly baked cookies.
  • In 2021 the startup signed its first commercial partnership outside of Israel with Italian company HiFood.
DouxMatox

💸 What makes Israel attractive to FoodTech investors?

  • We chatted with Beni Nofech, one of Israel's leading investors (portfolio includes Mush Food, Plantish, Alfred's FoodTech, SuperMeat) based out of Tel-Aviv to find out.
  • "As a new-protein Foodtech investor I focus almost exclusively on Israeli startups because of two main reasons: A) Geography: Israel is a very small country, with the vast majority of our ecosystem just a short commute away - even in 2021 - being physically and culturally close to the companies is a HUGE plus - especially for investors who want to really be hands-on. B) Israel is already a Foodtech nation - we have a thriving, robust innovation ecosystem, which is pro-actively backed by our government, and trusted by global investors for decades now."
  • "We have leading Agritech, Biotech and Medtech industries over here which are all relevant for Foodtech, and already supported by world-renowned academic institutions which generate a constant flow of eager and skilled entrepreneurs and researchers, along with breakthrough academic research that often gets commercialized. In the short-to-medium run - I’m betting on Israeli foodtech to play a leading role in accelerating the global new protein industry."

🤷 What more could be done to drive the Israel FoodTech scene?

  • "Much more needs to be done in order for Israel to maintain its leading position in the Foodtech industry for the longer run" says Beni "as GFI Israel points out - 3 key areas of focus need to be addressed:- Reinforcing academia (more tech & more skilled people)- Setting up pilot-scale infrastructure to support scale-up and early-industrialization processes of younger startups- The establishment of clear and efficient new-food regulation guidelines to allow Israeli startups to develop and commercialise in Israel before being forced to set up shop elsewhere."

👍 The good

  • Israel is not a big place, geographically or demographically. That means it has a strong community of entrepreneurs in the space. And it also means most foodtech companies are situated in a small neighbourhood (Rehovot), facilitating collaboration between them. 
  • Its location also makes it attractive, says Plantish CEO Ofek Ron, because it is a convenient middle point between the USA and Asia.
  • Ofek also credits the culture as a strong driver of the foodtech growth "Israel has an entrepreneurial environment - people are accepting failure and are not afraid to talk about the hard stuff, people are happy to be a part of a risky thing when there is an award at the end of it, people love the action of startup life."
  • The Kitchen Hub’s VP of Business Development Amir Zaidman believes the country’s global outlook is an important factor in its success: ‘Due to the small local market, Israeli FoodTech startups, by definition, are "born global", considering the most attractive market for their product from day one. The most attractive market isn't necessarily the biggest. It can be the one with lower regulatory hurdles, a favorable culture or something else, but rest assured that all this would be considered as a part of the plan. I would say the attractiveness is a combination of high-quality human capital and a global approach.’

👎 The bad

  • Despite its identity as a Startup Nation, Israel still lacks production infrastructure, so many companies are forced to move their operations overseas when scaling up. 
  • Adding to the above, some of Israel's biggest success stories have also picked up and moved their headquarters stateside for a number of reasons - be that access to later stage capital or to be closer to their target market. See: Taranis, DayTwo, Ukko, BeeHero, Fabric and more.
  • The country’s downfall may be the lack of a skilled workforce - while bringing in staff from abroad is a quick fix, it won’t work in the long term. More food scientists and chemists are needed to support the industry as it matures, said Plantish’s Ron.
  • Amazingly, more could still be done to support foodtech in Israel. Zaidman, said, ‘There are hardly any FoodTech VCs in Israel and generalist VCs have only recently started looking seriously into the space. Seed money is invested mostly by incubators and private investors. Later rounds are led, for the most part, by non-Israeli VCs. This is surprising because Israel is an advanced VC market with well over a 100 local VCs and several billions in dry powder.’
  • And while alternative proteins and plant-based meats are big business in the country, the delivery, e-grocery and meal kit sector is small and underdeveloped. However, that does of course present a great new opportunity for entrepreneurs in the space. 

 💡 The bottom line

  • From alt proteins to novel sugars, personalised nutrition to microalgae, Israel is advancing food and agritech on many fronts. 
  • Now the country is at a pivotal moment, poised to mature as a FoodTech Nation - if it can acquire the talent it needs, make inroads in underproved fields and beef up its homegrown investment funds. But the middle-eastern state certainly already its homegrown title as a Startup Nation. 

How did you like today's Trends?

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With thanks to Amir Zaidman (The Kitchen Hub) and Ofek Ron (Plantish) for their inputs on this piece.

🇮🇱 What is it? 

  • 9.5 million people call this tiny state in western Asia or eastern Europe (depending on who you ask) home. And yet this small nation, Israel, punches far above its weight when it comes to food and agritech.  
  • Perhaps that’s not surprising when you consider that this nation on the shores of the Red Sea and the Mediterranean has never known genuine peace and is mostly home to hard-grafting first- and second-generation immigrants. 
  • But why food and agritech? Why now? From designer proteins to 3D meat, let’s find out the secret ingredients behind Israel’s foodtech success…

🤔 Tell me more…

  • While ‘food tech’ is a relatively new term, Israel has been making waves in related fields for at least thirty years, with companies like Enzymotec and Algatechnologies. That’s despite the fact it’s a young country, has no natural resources, and is politically volatile.
  • And beginning in the mid 2010s, Israel has gained a reputation as a leader in food and agritech, with a new wave of major companies sprouting up ahead of the foodtech boom including TIPA, Hinoman and Biomilk. So how did a country without natural resources and a history of unrest become a self-styled Startup Nation?

🤷‍♂️ Why?

  • Israel has been rocked by bouts of unrest for most of its history. One thing to come out of this is a dogged devil-may-care attitude among its mostly-immigrant population - leading to a sense of innovation, tenacity,  and that classic carpe-diem initiative common to both entrepreneurs and its citizens at large.
  • The state has also long been home to pioneering academic institutions that work hard on agri-foodtech, from Technion to the Hebrew University. The country has a strong, academic foundation based on science that aids the startup ecosystem, provides amazing talent and infrastructure, and produces plenty of novel ideas. 
  • And the same goes for the startups themselves: Israel has been an innovation hub since the 1990s. The country boasts so many startups it is second only to Silicon Valley. Accordingly, Israel comes near the top on patents per person, VC investments per capita and more - making it an attractive place for entrepreneurs and engineers alike. 
  • Amir Zaidman, from Israel’s The Kitchen FoodTech Hub, personally sees one primary factor driving the Israeli boom: ‘I think the most important one is the "call to action" we all feel, with regards to challenges of the existing global food system. Some will join or establish an NGO, others will advocate or change their life choices. Israelis do startups. With the entrepreneurial environment and culture in Israel, this is the obvious way of action. Add to that a strong sense of community and you have fertile ground for a simmering FoodTech scene.’ 

📈 The figures

  • Start Up Nation includes 259 enterprises tagged under the category ‘foodtech’ and a further 443 with the label ‘agtech’. 
  • It is also pretty impressive that Israel has nearly as many unicorns as the European Union given its population almost 50 times smaller.

🔍 How is it shaping up?

  • Israel is excelling in several areas, particularly alt protein and plant-based innovations. Between 2018 and 2020, funding for alt protein companies grew eightfold, from $14m to $114m
  • Aleph Farms, Future Meat Technologies, Redefine Meat and Meat. The End are just a few of the leading companies in the Israeli alternative meat sector. There’s even murmurings that Future Meat is soon to open a cultivated meat factory in the US, following a mega $300m funding round. 
  • Alternative dairy is also heating up with Imagindairy’s planned 2023 launch and recent $13m seed funding round. Remilk and Biomilk (now named WILK), which went public this year, are also leaders in this space.
  • In related developments, novel proteins are also big, big news in Israel right now. Whether it’s mycelium (Mush Foods), chickpeas (InnovoPro) or microalgae (Brevel), there’s a genuine wealth of startups in this space. 
  • TIPA leads the pack when it comes to packaging. See what we did there? 
  • Personalisation in nutrition is also a growing trend. DayTwo provides personalised nutrition based on gut microbiome analysis while AlgoCart offers personalised product recommendations to drive better health outcomes. Qurate.tech and Lumen are also developing in this space, with personalised recipes and a nutrition app. 
  • The alt sugar market, meanwhile, is yet another niche flourishing in Israel with low-sugar juices (Better Juice, BlueTree), sugar substitutes (BT Sweet) and even redesigned sugar crystals (DouxMatok) on the up. Meanwhile, Amai Proteins is working on sweet designer proteins to reduce sugar in foods.
  • Incubators and accelerators are helping to drive growth by supporting new startups and fostering collaboration and networking, as well as funding rounds. The Kitchen FoodTech Hub, EIT FAN accelerator, Fresh Start Incubator and Trendlines are central to the foodtech sphere in Israel. 

👀 Who:

🌾 Agritech 

🍲 Foodtech

📈 Publicly traded Israeli FoodTech startups 

  • Bio Milk (cultured milk and breastmilk)
  • Else Nutrition (plant-based alternatives to baby and toddler formula)
  • Flying Spark (sustainable protein made from fruit flies)
  • Impacx (smart packaging)
  • MeaTech (enabling structured meat products through cell ag and 3D printing)
  • Nextferm (fermented protein)
  • NG Solutions (kids’ nutrition)
  • SavorEat (robot chef that delivers customized plant-based meat alternatives)

🔎 Read: Israel's 50+ Unicorns, Soonicorns and Futurecorns

Redefine Meat

🥩 Case study: Redefine Meat

  • Redefine Meat™’s slogan is ‘New Meat, No Compromise’. The company has developed an industrial-grade, patented 3D printing process to mimic the texture of genuine meat. 
  • And not just any meat. Alongside burgers and mince, the company is experimenting with whole cuts like beef and lamb flank, both coming soon. That’s a big breakthrough, as whole-cut meat has typically been a major sticking point for the alt-meat market.
  • Founder Eshchar Ben-Shitrit grew up devouring meat, but parenthood changed him. Suddenly, he could no longer stomach the idea of eating an animal’s child. And in 2018, his company was born. 
  • By 2019, his fledgling team had closed a $6 million seed round to finalize the development of their proprietary alternative meat 3D printer. 
  • In 2020, the company launched its first 3D printed beef steak.
  • This was followed in 2021 by a $29m Series A round, bringing the company closer to its 2030 aim of becoming the greatest alt meat company worldwide with another huge round rumoured to be in the making. 
  • The pros of this alt meat are many: like most alt meat, it’s more sustainable, better for our health, cheaper to produce at scale than conventional meat. 
  • The company hasn’t disclosed which proteins it uses, but it’s thought to be a mix of soy and pea. Either way, insiders says its highly nutritious and natural. And Marco Pierre White has given it his seal of approval. 
  • In addition to launching products in the UK, Germany and the Netherlands imminently, the team also plans to sell their machines and ingredient packs to meat processing partners, allowing them to print their own products to sell on to retailers and restaurants.
  • Redefine Meat™ products are currently available in select restaurants in Israel. The company is committed to constantly expanding the availability of its products and soon they will be available in hotels and in catering services. 

🍭 Case study: DouxMatok

  • DouxMatok, meanwhile, is riding the alt-sugar trend and has developed a patented solution to reduce sugar in its products by 40%. How? By redesigning the sugar crystal itself.
  • The Israeli start-up has called its rebranded sugar Incredo and as it’s made with real cane sugar, the taste profile remains the same as real sugar in products it’s used in.
  • In blind tastings, two-thirds of consumers said they preferred the biscuits made with Incredo sugar to those made with the real thing.
  • DouxMatok’s sugar crystal works by allowing sugar to be delivered to the taste receptors in our bodies more efficiently. Our brains interpret this as a higher level of sugar in food. That means there’s no sacrificing that delicious sweet taste, but the health risks of consuming too much of the sweet stuff are reduced.
  • In 2020, the company partnered with Canadian sugar company Rogers & Lantic Sugar to produce and distribute its rebranded sugar product. 
  • DouxMatok’s sugar is already on shelves at the Israeli bakery chain Piece of Cake in the form of freshly baked cookies.
  • In 2021 the startup signed its first commercial partnership outside of Israel with Italian company HiFood.
DouxMatox

💸 What makes Israel attractive to FoodTech investors?

  • We chatted with Beni Nofech, one of Israel's leading investors (portfolio includes Mush Food, Plantish, Alfred's FoodTech, SuperMeat) based out of Tel-Aviv to find out.
  • "As a new-protein Foodtech investor I focus almost exclusively on Israeli startups because of two main reasons: A) Geography: Israel is a very small country, with the vast majority of our ecosystem just a short commute away - even in 2021 - being physically and culturally close to the companies is a HUGE plus - especially for investors who want to really be hands-on. B) Israel is already a Foodtech nation - we have a thriving, robust innovation ecosystem, which is pro-actively backed by our government, and trusted by global investors for decades now."
  • "We have leading Agritech, Biotech and Medtech industries over here which are all relevant for Foodtech, and already supported by world-renowned academic institutions which generate a constant flow of eager and skilled entrepreneurs and researchers, along with breakthrough academic research that often gets commercialized. In the short-to-medium run - I’m betting on Israeli foodtech to play a leading role in accelerating the global new protein industry."

🤷 What more could be done to drive the Israel FoodTech scene?

  • "Much more needs to be done in order for Israel to maintain its leading position in the Foodtech industry for the longer run" says Beni "as GFI Israel points out - 3 key areas of focus need to be addressed:- Reinforcing academia (more tech & more skilled people)- Setting up pilot-scale infrastructure to support scale-up and early-industrialization processes of younger startups- The establishment of clear and efficient new-food regulation guidelines to allow Israeli startups to develop and commercialise in Israel before being forced to set up shop elsewhere."

👍 The good

  • Israel is not a big place, geographically or demographically. That means it has a strong community of entrepreneurs in the space. And it also means most foodtech companies are situated in a small neighbourhood (Rehovot), facilitating collaboration between them. 
  • Its location also makes it attractive, says Plantish CEO Ofek Ron, because it is a convenient middle point between the USA and Asia.
  • Ofek also credits the culture as a strong driver of the foodtech growth "Israel has an entrepreneurial environment - people are accepting failure and are not afraid to talk about the hard stuff, people are happy to be a part of a risky thing when there is an award at the end of it, people love the action of startup life."
  • The Kitchen Hub’s VP of Business Development Amir Zaidman believes the country’s global outlook is an important factor in its success: ‘Due to the small local market, Israeli FoodTech startups, by definition, are "born global", considering the most attractive market for their product from day one. The most attractive market isn't necessarily the biggest. It can be the one with lower regulatory hurdles, a favorable culture or something else, but rest assured that all this would be considered as a part of the plan. I would say the attractiveness is a combination of high-quality human capital and a global approach.’

👎 The bad

  • Despite its identity as a Startup Nation, Israel still lacks production infrastructure, so many companies are forced to move their operations overseas when scaling up. 
  • Adding to the above, some of Israel's biggest success stories have also picked up and moved their headquarters stateside for a number of reasons - be that access to later stage capital or to be closer to their target market. See: Taranis, DayTwo, Ukko, BeeHero, Fabric and more.
  • The country’s downfall may be the lack of a skilled workforce - while bringing in staff from abroad is a quick fix, it won’t work in the long term. More food scientists and chemists are needed to support the industry as it matures, said Plantish’s Ron.
  • Amazingly, more could still be done to support foodtech in Israel. Zaidman, said, ‘There are hardly any FoodTech VCs in Israel and generalist VCs have only recently started looking seriously into the space. Seed money is invested mostly by incubators and private investors. Later rounds are led, for the most part, by non-Israeli VCs. This is surprising because Israel is an advanced VC market with well over a 100 local VCs and several billions in dry powder.’
  • And while alternative proteins and plant-based meats are big business in the country, the delivery, e-grocery and meal kit sector is small and underdeveloped. However, that does of course present a great new opportunity for entrepreneurs in the space. 

 💡 The bottom line

  • From alt proteins to novel sugars, personalised nutrition to microalgae, Israel is advancing food and agritech on many fronts. 
  • Now the country is at a pivotal moment, poised to mature as a FoodTech Nation - if it can acquire the talent it needs, make inroads in underproved fields and beef up its homegrown investment funds. But the middle-eastern state certainly already its homegrown title as a Startup Nation. 

How did you like today's Trends?

Love it 😁 Meh 😐 Hate it 🙁

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