Most people in Southeast Asia view the rise of food delivery platforms as a guilty pleasure. Yes, services like Grabfood, Lalafood, FoodPanda, and others are convenient, but they also enable us to indulge in treats that our stomachs (to say nothing of our wallets) may have likely ignored if it were not for the on-demand economy.

But food delivery platforms deserve more than just our dietary regret. The industry deserves recognition as but one pillar of an even larger industry: food tech. The field refers to the development of new products and services around food; a wide spectrum that spans delivery services all the way to the creation of new types of food as we know it, such as in the case of Beyond Meat, which produces plant-based meat substitutes that some say are indistinguishable from the real item.

Food, of course, has no market. We all eat food. That’s why it should come as no surprise that the food-tech industry is projected to grow to US$700 billion in just a decade. How can people in the startup and tech community get involved in this space beyond just satisfying their late-night cravings through a delivery platform? Fortunately for our diets, there are several key ways.

1. Foodtech as a digital transformation enabler

Most people discuss digital transformation as though it were some laborious task that every traditional business leader must undertake. On the other hand, the advent of food tech has given restaurants, eateries, and other small food businesses many ways to easily transform how they serve and connect with their customers.

Also Read: Foodtech in Singapore through the eyes of startups

Take the case of Booky in the Philippines. The lifestyle app and discovery platform allow users to enjoy discounts from restaurants and other services. Booky effectively becomes another digital storefront for restaurants, bringing them new business from the digitally-savvy consumers who are also likely to become loyal customers.

2. Food as a complement of fintech

Food is clearly the main draw in the fin techs drive to make digital payments a habit and a lifestyle. The benefits of bringing e-payments mainstream are not lost on the banking sector including regulators, now fintech’s biggest champions as it promotes the velocity of money and also financial inclusion of the unbanked in emerging economies.

And then there’s blockchain and cryptocurrencies that hold the greatest promise in terms of secure digital transactions in a more and more Internet-based world economy.

Blockchain too has banked on food to bring the important technology mainstream. The Singapore-based Pundi X launched the first blockchain-based Point of Sales Systems XPOS with its crypto-carrying XPASS and XWallet in restaurants and food festivals across Asia in 2018. The XPOS has been rolled out to stores in 25 countries around the world since, including a couple of Michelin Star restaurants that now accept all major cryptocurrencies.

3. Foodtech as a venture capital magnet

If the food-tech sector is projected to grow to USD$700 billion, you can bet that venture capital firms and other investors are doing what they can now to claim their piece of the pie. There is no shortage, in other words, of capital to be raised for founders launching in the food tech space. 

One of most high profile examples of this fact is evident in Uber founder Travis Kalanick, who raised US$400 million from Saudi Arabia’s sovereign wealth fund for CloudKitchens. The company creates shared kitchens for the exclusive rent of delivery-only restaurants. 

But venture capital in food tech is not limited to big gambles like kitchens for rent. There is an increasing number of food-tech funds dedicated to backing ventures in every niche of the sector. Investments into the food tech space reached the US$1 billion mark in 2015, compared to only USD$60 million in 2008, and reached an all-time high of 459 unique investments in 2017. To put it simply, if you’re a founder in search of a hot idea, you can get funding in food.

4. Foodtech as a smart investment

With the food tech industry on track to be worth USD$700bn in a decade, the popular online global trading platform eToro recently created a new portfolio to help people invest in this fast-growing sector.

The context: Manufacturers and suppliers investing billions of dollars in developing new food and services as the world grapples with multiple food security challenges, requiring more sustainable agricultural production. On the lifestyle front, there’s the move towards more plant-based diets and consumer demand for out of home dining options that are opening up opportunities for manufacturers, retailers and even technology firms.

eToro’s new food tech investment portfolio comprises a diverse range of companies working in the sector, from established brands like Danone (BN.PA), which invests its own capital in food tech disruptors, through to innovators like Beyond Meat (BYND), which quadrupled its stock value in three months following its IPO in May.

eToro’s mission, of course, is to allow ordinary folks to get a piece of the action in otherwise prohibitive global stock investments. The company’s popular copy trading platform allows entry of USD$200 to invest in global brands and companies. Meanwhile, investment in the specially curated portfolio for food tech starts at US$2000.

Also Read: Meet the 10 agritech, foodtech startups pitching for Future Food Asias US$100K grand prize

Small business owners in the food space can use it to digitally transform their businesses, founders can easily launch venture-backed startups in the food tech gold rush, and online traders can even invest into the entire sector as a whole through a food tech portfolio.

So while those in the tech community are often advised to follow their heart, it may be just as smart and forward-thinking to follow your stomach.

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Image Credit:  Robert Anasch

 

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