Climate change and population growth, along with the conflict in Europe’s breadbasket Ukraine and soaring energy prices, are creating the ideal storm in which famines become more likely.
At a time of crisis, the world is looking for solutions and Singapore’s US$298 billion investor is throwing its weigh behind foodtech and agtech to help feed the masses in a time of crop failure and supply chain disruption.
Temasek is particularly motivated by Singapore’s strategic interest in food self-sufficiency. The island city state has no space for conventional cereal cultivation and is overwhelmingly dependent on imports. Singapore itself has a vibrant agtech start-up ecosystem as the island nation’s government seeks to strengthen its food resilience and achieving its “30 by 30” goal – which is to produce 30% of its nutritional needs locally by 2030, up from less than 10% in 2020. Temasek’s investments in agritech has ranged from startups to public companies and included alternative proteins, vertical farming and biotech.
Global SWF research finds that Temasek leads all other sovereign investors combined in the search for technological solutions to these challenges. Temasek has directly invested up to US$300 million so far this year in venture capital in startups based in Singapore, the US and Indonesia. This month it led a US$65.6 million Series A funding round by Oatside, a Singapore-based oat milk startup looking to appeal to the Asian palate using Australian oats and producing a competitively priced product.
In April, Temasek joined with the Abu Dhabi Growth Fund to co-lead a US$400 million Series C round for US-based Upside Foods, the largest round in the cultivated meat industry to date. Upside Foods is using the funds to build a commercial production facility that can produce any species of meat in both ground and whole cut formats, with an initial focus on chicken. Cultivated meat, which cuts out the use of livestock, can ensure the provision of meat protein without the requirement of grain production. Such an advance on a commercial scale could reduce the requirement for grain, leading to reduced land use for animal feed and in turn water resources and land cultivation.
In Indonesia, Temasek backed a Series C funding round by eFishery in January, backing smart feeding solutions for shrimps and fish in order to improve protein availability for Southeast Asia’s most populous country.
Agtech is a notable focus of Temasek’s sustainability agenda, particularly in pursuit of the island nation’s strategic interest in improving food self-sufficiency. The Singaporean fund’s investments in agtech have ranged from startups to public companies and included alternative proteins, vertical farming and biotech. The investor is always on the lookout for the next big thing emerging from Singapore’s entrepreneurial milieu, including: seed funding in Singaporean plant-based food startup NextGen; backing Big Ideas Ventures’ New Protein Fund 1 as it strives to develop alternatives to meat; and a joint venture deal with Nanofilm Technologies to create Sydrogen Energy, which will market parts used in the production of fuel cells and electrolyser systems in hydrogen production.
Temasek has extended its portfolio into urban farming by forging a JV with Leaps by Bayer and by spending US$ 365 million in acquiring an 85% stake in Israel’s Rivulis Irrigation in 2020, which applies smart technology to agricultural systems. Other allocations included US-based Impossible Foods and Australian startup V2Food, both of which stand for ethical consumer choices.
The Singaporean investor is not alone in sovereign investment in agtech and foodtech with Middle Eastern funds particularly concerned with improving their yield in an arid region. In March, the Oman Investment Authority (OIA) backed a US$85 million Series E financing round by MycoTechnology, which is developing the capacities of its mushroom fermentation platform, with sights on expanding across key markets in Europe, Asia and the Middle East.
Arab funds have also backed Israeli startups presumably with a view to supporting the development of agtech in regions of low water availability. Last year, Abu Dhabi’s ADQ led a US$105 million Series B round in Aleph Farms, which is looking to commercialize the large-scale production of new types of animal protein.
Foodtech and agtech appear to be challenging biotech in venture capital market investments by sovereign funds, indicating that long-term investors – particularly in countries with limited land and water resources – are looking to food security as both a strategic investment opportunity and a potential source of investment yield.