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Alpha Foods raises $28 million for its vegetarian prepared foods

Alpha Foods, the vegetarian prepared food manufacturer, has raised $28 million in financing for its portfolio of vegetarian burritos, tamales, nuggets, pizzas, burgers, patties and sausages.

The Glendale, Calif.-based company was launched by Loren Wallis, the founder of the dairy substitute, Good Karma Foods, and Cole Orobetz, a former director with the agricultural debt lending firm Avrio Capital.

First launched in 2015, Alpha Foods previously raised $12 million in financing from investment firms like New Crop Capital and AccelFoods, whose other brands include Kite Hill, Good Catch, BRAMi and Evoke Healthy Foods.

As more Americans move to supplement their diets with plant-based products, companies like Alpha Foods have found willing investors for new food brands. The company’s new round was led by AccelFoods, with existing investors, including New Crop Capital, Green Monday Ventures and Blue Horizon, also participating.

Companies like Alpha compete with huge consumer packaged goods companies like Kellogg’s (through its Morningstar Farms line of vegetarian products) and Nestlé (through Sweet Earth Foods).

While the Morningstar Farms brand might seem a bit stale, the market has been reinvigorated through the marketing muscle and venture dollars supplied by companies like Beyond Meat and Impossible Foods, whose products have captured contracts from some of the world’s biggest fast food chains — including McDonald’s, KFC and Burger King.

Alpha Foods said it will use the latest money to launch new products, make new hires and expand its distribution channels nationally and internationally.

The company is already sold in well over 9,000 stores at chains including Wegmans, Walmart, Kroger and Publix.

“As more and more people actively seek out plant-based options, whether for their health or the environment, we are looking to expand our innovations within the category and bring easy to prepare products to a wider audience,” said Cole Orobetz, co-founder and president of Alpha Foods, in a statement.

The sale of pre-prepared plant-based meals reached $387 million in 2019, up 6% over the past year, according to data from the Good Food Institute.

“We are in the early days of plant-based consumption. As a portable, functional food business geared towards the newly emergent flexitarian consumer, the Alpha platform meets all of its customers’ snack and mealtime needs,” said AccelFoods Managing Partner Jordan Gaspar. “We couldn’t be prouder to lead this strong nexus of collaborative investors, who had the opportunity to organically build trust this past year allowing for an incredibly successful outcome in this financing.”

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How Bykea is winning Pakistan’s ride-hailing and delivery market

Increasingly, the streets of Karachi and Lahore are being flooded with men riding bikes and wearing green T-shirts, a writer friend recently told me. In a sense, these men represent the emergence of Pakistan’s tech startups.

India now has more than 25,000 startups and raised a record $14.5 billion last year, according to government figures. But not all Asian countries are as large as India or have such a thriving startup ecosystem. Long overdue, things are beginning to change in bordering Pakistan.

Bykea, a three-year-old ride-hailing and delivery service, today has more than 500,000 bikes registered on its platform. It operates in some of Pakistan’s most populated cities, such as Karachi, Lahore and Islamabad, Muneeb Maayr, Bykea founder and CEO, told TechCrunch.

Maayr is one of the most recognized startup founders in Pakistan, and previously worked for Rocket Internet, helping the giant run fashion e-commerce platform Daraz in the country. While leading Daraz, he expanded the platform to cater to categories beyond fashion; Daraz was later sold to Alibaba.

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Diet autopilot Thistle raises $5M for health food subscriptions

What if it was easier to eat salad than junk food? Most diet routines take a ton of time, whether you’re cooking from scratch, making a meal kit or seeking a nutritious restaurant. But on-demand prepared food delivery companies like Sprig that tried to eliminate that work have gone bankrupt from poor unit economics.

Thistle is a different type of food startup. It delivers thrice-weekly cooler bags customized with meat-optional, plant-based breakfasts, lunches, dinners, snacks, sides and juices. By batching deliveries in the less-congested early morning hours and optimizing routes to its subscribers, or by mailing weekly boxes beyond its own geographies, Thistle makes sure you already have your food the moment you’re hungry. Whether you heat them up or eat them straight out of the fridge, you’re actually dining faster than you could even place an Uber Eats order.

The food on Thistle’s constantly rotating menu is downright tasty. You might get a sunrise chia parfait for breakfast, a chicken tropical mango salad for lunch, a microwaveable bulgogi noodle bowl for dinner, with beet hummus and kale-cucumber juice for snacks. Thistle’s not cheap, with meals averaging about $14 each. But compared to competitors’ on-demand delivery markups and service fees, wasting ingredients from the grocer and the hours of cooking for yourself, it can be a good deal for busy people.

“We see Thistle as part of a movement to make health convenient rather than a high willpower chore,” CEO Ashwin Cheriyan tells me. What Peloton did to shave time off getting a great workout, Thistle does for eating a nourishing meal. It makes the right choice the easiest choice.

Thistle COO Shiri Avnery and CEO Ashwin Cheriyan with their daughter

The idea of a button you can push to make you healthier has attracted a new $5.65 million Series A round for Thistle led by its first institutional investor, PowerPlant Ventures . Bringing the startup to $15 million in funding, the cash will expand Thistle’s delivery domain. Dan Gluck of PowerPlant, which has also funded food break-outs like Beyond Meat, Thrive Market and Rebbl, will join the board.

Currently Thistle delivers in-person to the Bay Area, LA metro, San Diego and Sacramento while shipping to most of Washington, Oregon, Utah, Idaho, Nevada and Arizona. Thistle actually held off on raising more since launching in 2013 to make sure it hammered out unit economics to prevent an implosion. It’s also planning broader meal options, additional product lines and fresh distribution strategies like getting stocked in office smart kitchens or subsidized by wellness plans.

“The reasons that so many food delivery companies have failed likely fall into two buckets: one, a lack of focus on margins and unit economics, and two, premature geographic expansion before proving out the business model,” says Cheriyan. “Thistle makes money similar to how a well-run restaurant would make money — by having strong gross margins, efficient customer acquisition costs and solid customer retention / lifetime metrics. We currently deliver tens of thousands of meals on a weekly basis to customers on the West Coast and our annual average growth rate since launch has been 100%+.”

It’s nice that Thistle hasn’t gone out of business, because I’ve been eating its salads 6X a week for three years. It’s been the most efficient way for me to get healthier and lose weight after a half-decade of ordering takeout sandwiches and then feeling sluggish all day. I legitimately look forward to each one since they often have 20+ ingredients and only repeat every few months, so they’re never boring.

It has helped me keep my work-from-home lunches to about 20 minutes so I have more time for writing. Thistle is one of the few startups I consistently recommend to people. When asked how I lost 25lbs before my wedding, I point to Peloton cycling, Future remote personal training and Thistle salads — none of which require me to leave the house.

Cheriyan tells me, “We wanted the better-for-you and better-for-planet choice to be the default choice.”

Growing out of on-demand

Thistle has already pivoted past the business model burning tons of cash across the startup world. The company started as an on-demand cold-pressed juice delivery service, sending hipster glass bottles of watermelon and charcoal extract to doors around San Francisco. It was 2013, yoga was booming and people were paying crazily high prices for liquified lemongrass. Health made simple seemed like a sure bet to the founding team of Alap Shah, Naman Shah, Sheel Mohnot and Johnny Hwin, some of whom run Studio Management, a family office and startup incubator. [Disclosure: Hwin and Alap Shah are friends of mine, but didn’t pitch or discuss this article with me.]

Thistle eventually straightened things out with a shift to subscriptions and batched delivery under the leadership of the newly added co-founders, Cheriyan and his wife and COO Shiri Avnery. “I came from a family of physicians — both my parents, brother, and enough aunts, uncles, and cousins are doctors that they could start a small hospital,” Cheriyan, a former corporate attorney in M&A tells me. “A common point of frustration was about patients suffering from diet-related illnesses who were unable to make a lifestyle change because it was too hard.”

Avnery, a PhD in air pollution and climate change’s impact on agriculture, had become exasperated with the slow pace of policy change and the inaction of governments and corporations. The two quit their jobs, moved to San Francisco, and searched for a point of leverage for positively influencing people’s diets and interaction with the environment. They teamed up with the founders and launched Thistle v1.

A lack of experience in logistics led to the initial detour into on-demand. But rather than trying to fix the problem with VC money, Thistle stayed lean and discovered the opportunity nestled between Uber Eats and Blue Apron: sending people food they don’t have to eat now, but that takes low or no time to prepare when they’re peckish. Through its app, users can customize their meal plans, ban their allergens, pause deliveries and see what they’ll eat next.

A sample of Thistle 8 meal plans

The unit economics problem most heavily plagued the early on-demand food companies. Food / labor waste and inefficient deliveries were likely the biggest reasons why the economics were unsustainable without venture life support. We know this personally as Thistle started our delivery service as an on-demand company before quickly realizing that the unit economics couldn’t sustain a healthy business,” Cheriyan explains, regarding companies like Sprig, DoorDash and Grubhub. Beyond unsold food, “the margins very likely did not support ordering a $12-$15 single meal for immediate delivery when average hourly driver wages reached $18-20.”

Meal kits were supposed to make dining healthier and cheaper, but they proved too much of a chore and led customers to boxes of ingredients piling up unused. Munchery and Nomiku went out of business while giants like Blue Apron have incinerated hundreds of millions of dollars and seen their share prices sink.

“The meal kit companies fared a little better from a gross margin perspective (due to pre-orders and more efficient deliveries), but suffer most from an easy-to-copy business model. This led to a rise in copycats, and, as a result, heavily rising customer acquisition costs, low switching costs and poor retention,” Cheriyan tells me. “Fundamentally the meal kit companies face another challenge, which is that people have less and less time to cook and are increasingly looking for ready-to-eat options.”

Push-button health

A slower, steadier approach with less overhead, more convenience and fewer direct competitors has helped Thistle grow to 400 employees, from culinary to engineering to logistics.

Still, it’s vulnerable. It may still be too expensive for some markets and demographics. Logistics experts like Amazon and Whole Foods could try to barge into the market. Cloud kitchens without dining rooms are making restaurant food more affordable for delivery. And another startup could always take the gamble on raising a ton of cash and subsidizing prices to steal market share, especially where Thistle doesn’t operate yet.

Thistle could counter these threats by further eliminating delivery costs by selling through partners like office smart fridges where employees pay on the spot, or equipping gym lobbies with more than just Muscle Milk.

One opportunity we’re excited to test is attended and unattended retail — it would be great to be able to pick up Thistle products at your local grocery store, gym or coffee shop,” Cheriyan says. As for offices, “Today’s corporate lunchtime solutions often require a trade-off between health and convenience: either wait in line for 30+ minutes at your favorite salad spot for a healthy option, or opt into catered restaurant meals that leave you feeling sluggish and unproductive.” Thistle could help employers prevent the 3pm energy lull.

The startup’s focus on plant-forward meals also centers it in the path of another megatrend: the shift to environmentally conscious diets. Almost 60% of Americans are trying to eat less meat and 50% are eating meat-alternatives like Impossible Burgers. That stems both from interest in the humane treatment of animals and how 15% of green house emissions come from livestock. But 45% of Americans say they hate to cook. That’s why Thistle makes pre-made meals where meat and egg are optional, but the food is healthy and delicious without them.

In the age of Uber, we’ve acclimated to an effortless life. The new wave of “push-button health” startups like Thistle could finally take the hassle out of aligning your actions in the gym or kitchen with your intentions.

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Memphis Meats raised $161 million from SoftBank Group, Norwest and Temasek

Memphis Meats, a developer of technologies to manufacture meat, seafood and poultry from animal cells, has raised $161 million in financing from investors, including Softbank Group, Norwest and Temasek, the investment fund backed by the government of Singapore.

The investment brings the company’s total financing to $180 million. Previous investors include individual and institutional investors like Richard Branson, Bill Gates, Threshold Ventures, Cargill, Tyson Foods, Finistere, Future Ventures, Kimbal Musk, Fifty Years and CPT Capital.

Other companies, including Future Meat Technologies, Aleph Farms, Higher Steaks, Mosa Meat and Meatable, are pursuing meat grown from cell cultures as a replacement for animal husbandry, whose environmental impact is a large contributor to deforestation and climate change around the world.

Innovations in computational biology, bio-engineering and materials science are creating new opportunities for companies to develop and commercialize technologies that could replace traditional farming with new ways to produce foods that have a much lower carbon footprint and bring about an age of superabundance, according to investors.

The race is on to see who will be the first to market with a product.

“For the entire industry, an investment of this size strengthens confidence that this technology is here today rather than some far-off future endeavor. Once there is a “proof of concept” for cultivated meat — a commercially available product at a reasonable price point — this should accelerate interest and investment in the industry,” said Bruce Friedrich, the executive director of the Good Food Institute, in an email. “This is still an industry that has sprung up almost overnight and it’s important to keep a sense of perspective here. While the idea of cultivated meat has been percolating for close to a century, the very first prototype was only produced six years ago.”

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Soft Robotics raises $23 million from investors including industrial robot giant FANUC

Robotics startup company Soft Robotics has closed its Series B round of funding, raising $23 million led by Calibrate Ventures and Material Impact, and including participation from exiting investors including Honeywell, Yahama, Hyperplane and more. This round also brings in FANUC, the world’s largest maker of industrial robots and a recently announced strategic partner for Soft Robotics .

The company said in a press release announcing this latest round of funding that the round was oversubscribed, which suggests it isn’t looking to glut itself on capital investors, given that this $23 million follows a similarly sized $20 million round that closed in 2018 which it also referred to as “oversubscribed.” Prior to that, Soft Robotics had raised $5 million in a Series A round closed in 2015. It has plenty of large, global clients already, so it’s probably not hurting for revenue.

Soft Robotics is focused on developing robotic grippers that, as you might’ve guessed from the name, make use of soft material endpoints that can more easily grip a range of different objects without the kind of extremely specific and tolerance-allergic complex programming that’s required for most traditional industrial robotic claws.

With its 2018 funding raise, Soft Robotics said that it was expanding further into food and beverage, as well as doubling down on its presence in the retail and logistics industries. This round and its new partnership with FANUC (which involves a new integrated system that pairs its mGrip robotic gripper with a new Mini-P controller, all with simple integration to FANUC’s existing lineup of industrial robots) will give it strategic and functional access to what is the most influenentioal industrial robotics company in the world.

This round will specifically help Soft Robotics spend on growth, looking to increase its variability even further and work on expanding its food packaging and consumer goods applications, as well as diving into e-commerce and logistics – specifically to help automate and improve the returns process, a costly and ever-growing challenge as more retail moves online.

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Lucky coffee, unicorn stumbles and Sam Altman’s YC wager

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week we had TechCrunch’s Alex Wilhelm and Danny Crichton on hand to dig into the news, with Chris Gates on the dials and more news than we could possibly cram into 30 minutes. So we went a bit over; sorry about that.

We kicked off by running through a few short-forms to get things going, including:

  • Alex wanted to talk about his recent story on Lily AI’s $12.5 million Series A. Canaan led the round into the e-commerce-focused recommendation engine that has a cool take on what people care about.
  • Danny talked about the acquisition of Armis Security by Insight for $1.1 billion, the VC round for self-driving forklift startup Vecna and an outside-the-Valley round for Houston-based HighRadius.

Turning to longer cuts, the team dug into the latest from SoftBank, its Vision Fund and the successes and struggles of its enormous startup bets. Leading the news cycle this week were layoffs at Zume, a robotic pizza delivery venture that is no longer pursuing robotic pizza delivery. Now it’s working on sustainable packaging. Cool, but it’s going to be hard for the company to grow into its valuation while pivoting.

Other issues have come up — more here — that paint some cracks onto the Vision Fund’s sunny exterior. Don’t be too beguiled by the bad news, Danny says; venture funds run like J-Curves, and there are still winners in that particular portfolio.

After that, we turned to China, in particular its venture slowdown. The bubble, in Danny’s view, has burst. The story discussed is here, if you want to read it. The short version for the lazy is that not only has China’s venture scene slowed down dramatically, but startups — even those with ample capital raised — are dying by the hundred. But one highly caffeinated Chinese startup continues to find growth in the world’s greatest tea market.

Finally we hit on the Sam Altman wager and the latest from Sisense, which is now a unicorn. All that and we had some fun.

Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercastSpotify and all the casts.

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Just Spices, the German spice mix startup, raises €13M Series B

Just Spices, the German-founded spice mix brand, is disclosing €13 million in Series B funding. The round is led by Five Seasons Ventures and Coefficient Capital, with Bitburger Ventures also joining.

A direct to consumer play, Just Spices offers two main product lines: Spice Mixes and “IN MINUTES”.

The first consists of various spice blends, with new blends being developed based on the sales and customer feedback data the startup is amassing.

The second, launched in 2018, is recipe-driven, offering 27 “fix” meal preparations that sees Just Spices provide the recipe and spice mix needed to prepare a quick meal, with only a few additional fresh ingredients required to complete the dish. It appears to share some similarities with SimplyCook in the U.K.

“The need for innovative, fast and still balanced solutions in the food sector is greater than ever,” says Just Spices co-founder and CEO Florian Falk. “On the one hand, people have less time available so food has to be as uncomplicated as possible, but on the other, we still have wants and needs… With Just Spices, and especially with IN MINUTES, we offer a carefree alternative, which consumers can be confident is fast and tasty whilst still fitting into a conscious, healthy diet.”

As part of its customer acquisition strategy and to power a product development feedback loop, Just Spices says it has built a vibrant, active digital community of home cooks. More than 60% of its sales are generated online, and the company claims to be one of the most followed spices brands in Europe (on social media). And certainly the startup is investing in content, including operating its own in-house studio and producing podcasts.

“We want to become the world’s largest lifestyle spice brand,” adds Falk. “To achieve this, we have not only built a fantastic partnership network, we have brought together an amazing team. We want to bring the joy and fun of cooking to many more people.”

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Don’t wait – First ticket release of 2020 for 3rd Annual Winter Party at Galvanize

If you haven’t scored a ticket yet to our 3rd Annual Winter Party at Galvanize, now’s your chance. We just released another batch of tickets to the best Silicon Valley soiree. Shake off your post-holiday doldrums and join the movers and shakers of the startup community at Galvanize in San Francisco on February 7.

Last year, nearly 1,000 of you joined us for luscious libations, fantastic food, world-class networking and some crazy karaoke . No one does karaoke like TechCrunch does karaoke.

Tickets are limited — and we’re rolling them out in batches. Grab yours now ($85 a pop, right here). If you miss out, keep checking back for the next ticket release.

What’s on tap this year? Well, craft beer for one thing, and wine for another. Plus delicious apps (just eat them — no coding required), party games and activities, plenty of photo ops and giveaways. We even have a few surprises for you.

Between the food and the fun, be sure to check out a select few early-stage startups exhibiting their products. Interested in doing just that? You can buy demo tables here for $1,500 each — and the price includes four tickets to the party. Remember, we said a “select few,” so get yours before we sell out (only four tables left!).

Here’s the party 4-1-1.

  • When: Friday, February 7, 6:00 p.m. – 9:00 p.m.
  • Where: Galvanize, 44 Tehama St., San Francisco, CA 94105
  • Ticket price: $85
  • Demo tables: $1,500 (buy tickets and tables here)

You never know who you’ll meet at a TechCrunch party — potential investors, the perfect co-founder or maybe a coding wizard. But they have a history of being a place where startup magic happens.

Here’s a classic “but wait, there’s more” moment. We’ll also give away some awesome door prizes, like TC swag and tickets to Disrupt SF, our flagship event coming in September 2020.

Don’t miss the food, the fun, the community and the opportunity. Join us for the TechCrunch 3rd Annual Winter Party at Galvanize in San Francisco on February 7. We can’t wait to see you!

Is your company interested in sponsoring or exhibiting at the 3rd Annual Winter Party at Galvanize? Contact our sponsorship sales team by filling out this form.

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Weber’s new Smart Grilling Hub uses June tech to make everyone a grillmaster

Weber is deepening its partnership with smart cooking startup June, with a new product debuting at CES 2020 today that can turn any grill into a smart grill — and providing expert guidance and grilling advice to even novice home cooks.

The new Weber Connect Smart Grilling Hub includes a small device with ports for connecting wired thermometers that you can use to monitor the temperature of your meats or other foods as they cook. The Hub supports use of up to four temperature sensors at once, so you can monitor the temperature of different dishes all at the same time; you connect to the hub with your smartphone via Weber’s dedicated app to receive up-to-date info about the current internal temperature of whatever you’re cooking. The app will alert you when your meats reach the proper temperature for whatever level of doneness you’re shooting for.

The app also provides step-by-step cooking instructions, notifications for things like when it’s time to flip food if that’s part of the cooking process and tips and tricks culled from actual expert grillers about how best to cook your stuff. Weber also says it plans to add Alexa support to the Hub later in the year, as well as provide other new features via software updates.

Weber previously partnered with June on their forthcoming Weber SmokeFire pellet grill, the first pellet grill made by Weber, which also has smart cooking technology similar to what the Smart Grilling Hub provides, but built-in.

The Smart Grilling Hub will launch in more than 30 countries initially starting in “early 2020,” and will sell for $129.99 in the U.S.

CES 2020 coverage - TechCrunch

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Oceans of opportunity: surveying 2020’s seafaring startup potential

Space attracts a lot of attention as an area of frontier tech investment and entrepreneurship, but there’s another vast expanse that could actually be more addressable by the innovation economy — Earth’s oceans.

Seafaring startups aren’t attracting quite as much attention as their spacefaring cousins, but 2019 still saw a flurry of activity in this sector and 2020 could be an even big year for everything aquatic.

Sounding the depths of data collection

One big similarity between space tech and seafaring opportunities is that data collection represents a significant percent of the potential market. Data collection in and around Earth’s oceans has increased dramatically in recent years thanks to the availability, efficacy and cost of sensor technologies — in 2017, it was estimated that as much ocean data had been gathered in the past two years as in all of human history. But relatively speaking, that barely scratches the surface.

Ocean observation has largely been driven by scientific and research goals, which means there’s bound to be a pretty hard cap on available funding. But ocean data has value in all kinds of private’s sector pursuits, including the potential for autonomous commercial cargo transportation (more on that later), as well as predicting weather and climate conditions that impact shipping routes, agriculture and more.

Various methods exist for collecting data about Earth’s oceans, including space-based satellite observation. Startups like Terradepth, Saildrone and Promare have all proposed various autonomous seafaring data collection vehicle designs that could leverage robotics to bring ocean observation at scale closer to home. These firms are using technology that’s been made affordable for startup budgets through miniaturization and efficiency gains evolved through the progress of the smartphone and other computing industries.

This past year, Xprize awarded millions in prize money to teams that competed in the Ocean Discovery competition for autonomous ocean floor mapping, which is resulting in spin-out ventures that have a head start on success.

As in space, data collection and observation can take many forms, so we can expect to see many industry-specific approaches emerge to capitalize on what are surprisingly large market opportunities, even for seemingly narrow types of data. Continued efforts to refine and improve robotics technologies like sensing and vision should drive even more growth in autonomous ocean observation in 2020.

Autonomous logistics

Oceanfaring drones aren’t just about data collection, however; a huge portion of the global logistics market still relies on giant cargo vessels. The drive to automate container ships is nothing new, but it’s reaching a point where we’re actually starting to see autonomous cargo vehicles embark, including this Chinese cargo ship that set out from Guangdong at the end of this year and a ship called the Yara Birkeland has begun trials out of Rotterdam and expects to be operating fully autonomously by 2022.

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