"In Silicon Valley, investors turn to food start-ups" by Jenna Wortham and Claire Cain Miller | New York Times, April 29, 2013
NEW YORK — Making big bets on food....
The venture capital firms helping to finance these businesses are some of the valley’s most prominent names....
And where do they get the loot? From pension funds and college endowments.
Celebrities from Hollywood (Matt Damon), pro football (Tom Brady), and the tech world more broadly (Bill Gates) have also joined in....
Oh, well, who could argue with it then?
Venture capitalists have strayed from pure technology to food before. Restaurant chains like Starbucks, P.F. Chang’s, Jamba Juice, and, more recently, the Melt, were backed by venture capital. And recipe apps and restaurant review sites like Yelp have long been popular.
But this newest wave of start-ups is seeking to use technology to change the way people buy food, and in some cases to invent entirely new foods. Investors are also eager to profit from the movement toward eating fewer animal products and more organic food. They face a contradiction, though, because that movement also shuns processed food and is decidedly low-tech.
So now the healthy food movement is being taken over by the same people who brought you "green consumerism." That, and the fact that this is being pushed in my corporate paper means I don't like the smell.
‘‘It’s not Franken-food,’’ Kaul of Khosla Ventures said. ‘‘We’re careful not to make it sound like some science experiment, but there is technology there.’’
But IS IT going to be GMO food?
Hampton Creek Foods, based in San Francisco, uses about a dozen plants, including peas, sorghum, and a type of bean, with properties similar to eggs, to make an egg substitute.
Tetrick, its founder, started the company after working on alleviating poverty in sub-Saharan Africa. He hired a protein chemist, a food scientist, a sales executive from Heinz, and a contestant from the television show ‘‘Top Chef.’’ Two large food companies are using the egg substitutes in cookies and mayonnaise, and he said he planned to sell them to consumers next month.
I don't eat eggs.
Related: Buffett Bloodied By Heinz
What's inside there?
Unreal, based in Boston, makes candy that the founders say has no artificial colors or flavors, preservatives, hydrogenated fats or genetically modified ingredients, with at least 25 percent less sugar than similar candy on the market and added protein and fiber. The candy is sold in stores including CVS and Target.
Still, food start-ups have their own challenges that are unfamiliar to tech entrepreneurs and investors, like a broken-down delivery truck or a bad oyster. These setbacks can be more difficult to recover from than a software malfunction.
In the early days of Plated, for instance, which sells ready-to-make dinner kits for recipes like Greek lamb burgers with cucumber salad, the founders sank $15,000 into building a customized refrigerated warehouse in Queens. Then they discovered that it would not cool lower than 70 degrees, unsuitable for food handling and preparation.
Are you sure they are not horse meat? Amazing how that scandal disappeared.
“We just had to walk away from that investment,’’ said Nick Taranto, one of the founders.
That's what I'm doing now.
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From what I understand they have an incredible cafeteria.
Maybe you want to play a game during lunch?
