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Apeel bites into another $250M funding round, at a $2B valuation, to accelerate fresh food supply chains
Apeel Sciences, a food system innovation company, is out to prevent food produced globally from ending up in the landfill, especially as pressures from the global pandemic affect the food supply chain.
The company just added $250 million in Series E funding, giving it a valuation of $2 billion, to speed up the availability of its longer-lasting produce in the U.S. (where approximately 40% of food is wasted), the U.K. and Europe.
Existing investor Temasek led the round and was joined by a group of new and existing investors, including Mirae Asset Global Investments, GIC, Viking Global Investors, Disruptive, Andreessen Horowitz, Tenere Capital, Sweetwater Private Equity, Tao Capital Partners, K3 Ventures, David Barber of Almanac Insights, Michael Ovitz of Creative Artists Agency, Anne Wojcicki of 23andMe, Susan Wojcicki of YouTube and Katy Perry.
With the new funding, Apeel has now raised over $635 million since the company was founded in 2012. Prior to this round, the company brought in $250 million in Series D funding in May 2020.
Santa Barbara-based Apeel developed a plant-based layer for the surface of fruits and vegetables that is tasteless and odorless and that keeps moisture in while letting oxygen out. It is those two factors in particular that lead to grocery produce lasting twice as long, James Rogers, CEO of Apeel, told TechCrunch.
Apeel installs its application at the supplier facilities where the produce is packed into boxes. In addition to that technology, the company acquired ImpactVision earlier this year to add another layer of quality by integrating imaging systems on individual pieces as they move through the supply chain to optimize routing so more produce that is grown is eaten.
“One in nine people are going hungry, and if three in nine pieces of produce are being thrown away, we can be better stewards of the food we are throwing away,” Rogers said. “This is a solvable problem, we just have to get the pieces to the right place at the right time.”
The company is not alone in tackling food waste. For example, Shelf Engine, Imperfect Foods, Mori and Phood Solutions are all working to improve the food supply chain and have attracted venture dollars to go after that mission.
Prior to the pandemic, the amount of food people were eating was growing each year, but that trend is reversed, Rogers explained. Consumers are more aware of the food they eat, they are shopping less frequently, buying more per visit and more online. At the same time, grocery stores are trying to sort through all of that.
“We can’t create these supply networks alone, we do it in concert with supply and retail partners,” he said. “Grocery stores are looking at the way shoppers want to buy things, while we look at how to partner to empower the supply chain. What started with longer-lasting fruits and vegetables, is becoming how we provide information to empower them to do it without adding to food waste.”
Since 2019, Apeel has prevented 42 million pieces of fruit from going to waste at retail locations; that includes up to 50% reduction in avocado food waste with corresponding sales growth. Those 42 million pieces of saved fruit also helped conserve nearly 4.7 billion liters of water, Rogers said.
Meanwhile, over the past year, Apeel has amassed a presence in eight countries, operating 30 supply networks and distributing produce to 40 retail partners, which then goes out to tens of thousands of stores around the world.
The new funding will accelerate the rollout of those systems, as well as co-create another 10 supply networks with retail and supply partnerships by the end of the year. Rogers also expects to use the funding to advance Apeel’s data and insights offerings and future acquisitions.
Thomas Park, president and head of alternative investments at Mirae Asset Global Investments, said his firm has been investing in environmental, social and governance-related companies for awhile, targeting companies that “make a huge impact globally and in a way that is easy for us to understand.”
The firm, which is part of Mirae Asset Financial Group, often partners with other investors on venture rounds, and in Apeel’s case with Temasek. It also invested with Temasek in Impossible Foods, leading its Series F round last year.
“When we saw them double-down on their investment, it gave us confidence to invest in Apeel and an opportunity to do so,” Park said. “Food waste is a global problem, and after listening to James, we definitely feel like Apeel is the next wave of how to attack these huge problems in an impactful way.”
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Druva raises $147M at a valuation north of $2B as the cloud rush continues
Druva, a software company that sells cloud data backup services, announced today that it has closed a $147 million round of capital. Caisse de dépôt et placement du Québec (CDPQ), a group that manages Quebec’s pension fund, led the round, which also saw participation from Neuberger Berman. Prior investors including Atreides Management and Viking Global Investors put capital into the deal, as well.
Druva last raised a $130 million round led by Viking in mid-2019 at around a $1 billion valuation. At the time TechCrunch commented that the company’s software-as-a-service (SaaS) backup service was tackling a large market. (TechCrunch also covered the company’s $51 million round back in 2016 and its $80 million raise from 2017.)
Since then SaaS has continued to grow at a rapid clip, including a strong 2020 spurred on by COVID-19 boosting digital transformation efforts at companies of all sizes. In that context, it’s not surprising to see Druva put together a new capital round.
A recent tie-up between Dell and Druva, first reported in January of this year, was formally announced earlier this month. The selection of Druva by Dell could help provide the unicorn with a customer base to sell into for some time. TechCrunch wrote about Druva earlier this year, during the reporting process the company said that it had “almost tripled its annual revenue in three years.”
Its new round did include some secondary shares, which Neuberger Berman managing director Raman Gambhir described as difficult to snag during a call with TechCrunch. He explained that some of the secondary sales were due to some prior funds reaching their end-of-life cycle. Druva CEO Jaspreet Singh stressed that his backers are working to do what’s best for the company instead of merely maximizing their returns during a joint interview.
Singh told TechCrunch that business at Druva is accelerating. Normally we’d note that that sounds like IPO fodder, especially as Druva passed the $100 million ARR threshold back in 2019. However, as the company has been making IPO noise for some time, it’s hard to predict when it might pull the trigger. Our coverage of the company’s 2016 round noted that the company could go public within a year. And our coverage of its 2019 investment included Singh telling TechCrunch that an IPO was 12 to 18 months away.
It probably is, now, but that’s beside the point. With refreshed accounts, a market moving in its direction, and some early investor relieved in its latest investment the company has quarters worth of time to play with. Still, Singh did stress that its new financing round did select investors that he said is building a long-term position; that’s the sort of verbiage that CEOs break out when they are building a pre-IPO cap table.
Gambhir told TechCrunch that his firm has already requested shares in Druva’s eventual IPO. Perhaps we’ll see Fidelity show up with a $50 million check in a few months.
Every startup that raises capital tells the media that they are going to use the funds to expand their staff, double down on their tech and, often, invest in their go-to-market (GTM) motion. Druva is no exception, but its CEO did tell TechCrunch that his company currently has over 200 open GTM positions. That’s quite a few. Presumably that spend will help the company keep its growth rate strong in percentage terms as it does, finally, look to list.
This is yet another growth round for a late-stage, enterprise-facing software company. But it’s also a round into a company that had to move its operations to the United States when it was founded, at the behest of its investors per Singh. And Druva has done some pretty neat cloud work, it told TechCrunch earlier this year, to ensure that it can defend software-like margins despite material storage loads.
It’s an S-1 that we’re looking forward to. Start the countdown.
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Ecovative sees a fungal future for fashion, food and foam packaging and has a fresh $60M to make it
Eben Bayer has spent the better part of 14 years proving out the power of the humble mushroom as the world’s truly functional food.
As the chief executive and founder of Ecovative Design, Bayer has made replacements for foam packaging, lamps and furniture, leather materials and even meats like bacon from mighty mushroom mycelia (they even grew a tiny home).
Now the company has $60 million in financing to create new applications for its mycelial products and to scale up existing business units.
The core of Ecovative Design’s business is in packaging. That’s where the company has been developing its tech the longest and where its replacements for Styrofoam packaging have had the most commercial traction.
But there’s far more to Ecovative’s mushrooms than that, and the company’s new investors — including Viking Global Investors, with support from Senator Investment Group, AiiM Partners, Trousdale Ventures and other undisclosed backers — want to see just how far the company can go.
Part of the money will be used to build out a discovery platform for new materials and new strains in an effort to make Ecovative the Gingko Bioworks of the mushroom business. Another chunk of change will be used to build out a larger production facility for its mushroom production.
The Gingko analogy may not be that much of a stretch. Using its platform for manufacturing and deep knowledge of fungi, Ecovative has already spun up a food company called Atlast, which raised $7 million to begin building a fake meat empire on the back of a mushroom-made bacon substitute.
A person in a lab coat stands with their back to several trays of Ecovative’s mushroom material growing in trays. Image Credits: Ecovative Design
And the company also has fashion on the brain. A licensing agreement between Ecovative and Bolt Threads helped power that massively funded startup’s push into manufacturing a leather replacement from mushrooms back in 2018.
The deal between the two ended in acrimony and litigation — and now Ecovative is going it alone, looking to be a provider of bulk leather replacements for anything from shoes to belts to buckskin jackets.
“It seems like there’s a need for somebody who could not be a branded supplier, but to be someone who can provide scalable mushroom leather,” said Bayer.
Other companies are working on trying to convince consumers to make the switch to mushrooms or other plant-based leather substitutes. Those are businesses like Mycoworks, which raised $45 million from a slew of celebrities last year to build out its own commercial-scale mycelial manufacturing business. Or Natural Fiber Welding, which is backed by none other than the omnipresent eco-conscious fashion accessory adorning the feet of almost every venture investor — Allbirds (or are Atoms the new thing? I can’t keep up…).
“The demand for new biomaterials in the fashion industry, such as mycelium, far outstrips the current supply. Ecovative is tackling this challenge head-on, committing to building a next-generation platform capable of producing mycelium at scale,” said Katrin Ley, managing director of Fashion for Good, in a statement.
While Ecovative makes small batches of products under brands like Atlast, Bayer wants his company to be more of a white-label material provider than a branded business making shoes, packaging and plant-based meat replacements.
The new financing comes on the heels of Ecovative’s partnership with U.K. packaging licensee Magical Mushroom Company, which recently announced the opening of four more facilities to supply the U.K. and EU markets with green packaging solutions, the company said.
“Mycelium is a unique material that outperforms other sustainable alternatives in industries as diverse as fashion and food,” said Evan Lodes, partner at Senator Investment Group, which first backed Ecovative back in 2019. “Ecovative pioneered the field of mycelium materials, and has invested in the research and development necessary to deliver it at the scale and cost necessary to make a significant impact.”
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Color raises $167 million funding at $1.5 billion valuation to expand ‘last mile’ of US health infrastructure
Healthcare startup Color has raised a sizable $167 million in Series D funding round, at a valuation of $1.5 billion post-money, the company announced today. This brings the total raised by Color to $278 million, with its latest large round intended to help it build on a record year of growth in 2020 with even more expansion to help put in place key health infrastructure systems across the U.S. — including those related to the “last mile” delivery of COVID-19 vaccines.
This latest investment into Color was led by General Catalyst, and by funds invested by T. Rowe Price, along with participation from Viking Global investors as well as others. Alongside the funding, the company is also bringing on a number of key senior executives, including Claire Vo (formerly of Optimizely) as chief product officer, Emily Reuter (formerly of Uber, where she played a key role in its IPO process) as VP of Strategy and Operations, and Ashley Chandler (formerly of Stripe) as VP of Marketing.
“I think with the [COVID-19] crisis, it’s really shone the light on that lack of infrastructure. We saw it multiple times, with lab testing, with antigen testing and now with vaccines,” Color CEO and co-founder Othman Laraki told me in an interview. “The model that we’ve been developing, that’s been working really well and we feel like this is the opportunity to really scale it in a very major way. I think literally what’s happening is the building of the public health infrastructure for the country that’s starting off from a technology-first model, as opposed to, what ends up happening in a lot of industries, which is you start off taking your existing logistics and assets, and add technology to them.”
Color’s 2020 was a record year for the company, thanks in part to partnerships like the one it formed with San Francisco to establish testing for healthcare workers and residents. Laraki told me they did about five-fold their prior year’s business, and while the company is already set up to grow on its own sustainably based on the revenue it pulls in from customers, its ambitions and plans for 2021 and beyond made this the right time to help it accelerate further with the addition of more capital.
Laraki described Color’s approach as one that is both cost-efficient for the company, and also significant cost-saving for the healthcare providers it works with. He likens their approach to the shift that happened in retail with the move to online sales — and the contribution of one industry heavyweight in particular.
“At some point, you build Amazon — a technology-first stack that’s optimized around access and scale,” Laraki said. “I think that’s literally what we’re seeing now with healthcare. What’s kind of getting catalyzed right now is we’ve been realizing it applies to the COVID crisis, but also, we started actually working on that for prevention and I think actually it’s going to be applying to a huge surface area in healthcare; basically all the aspects of health that are not acute care where you don’t need to show up in hospital.”
Ultimately, Color’s approach is to rethink healthcare delivery in order to “make it accessible at the edge directly in people’s lives,” with “low transaction costs,” in a way that’s “scalable, [and] doesn’t use a lot of clinical resourcing,” Laraki says. He notes that this is actually very possible once you reasses the problem without relying on a lot of accepted knowledge about the way things are done today, which result in a “heavy stack” versus what you actually need to deliver the desired outcomes.
Laraki doesn’t think the problem is easy to solve — on the contrary, he acknowledges that 2021 is likely to be even more difficult and challenging than 2020 in many ways for the healthcare industry, and we’ve already begun to see evidence of that in the many challenges already faced by vaccine distribution and delivery in its initial rollout. But he’s optimistic about Color’s ability to help address those challenges, and to build out a “last mile” delivery system for crucial care that expands accessibility, while also making sure things are done right.
“When you take a step back, doing COVID testing or COVID vaccinations … those are not complex procedures at all — they’re extremely simple procedures,” he said. “What’s hard is doing them massive scale and with a very low transaction cost to the individual and to the system. And that’s a very different tooling.”
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Agricultural biotech startup Boost Biomes adds a strategic investor in Japan’s Universal Materials Incubator
Boost Biomes, the Y Combinator-backed developer of microbiome-based bio-fungicides and bio-pesticides for agricultural applications, has added $2 million in funding and picked up a new strategic investor in Japan’s Universal Materials Incubator.
To date, Boost Biomes has raised more than $7 million in financing to support the development of new products like its bio-fungicide developed from the microorganisms that live in the soil in a symbiotic relationship with plants.
The work that Boost does is primarily on understanding the interactions between microbes and plants in the soil. “The goal is to be the discovery engine and develop new microbial products for use in food and agriculture,” said Boost chief executive and co-founder Jamie Bacher.
The commitment from Japan’s Universal Materials Incubator expands on a $5 million institutional round led by another strategic partner, Yara International, a global crop nutrition company, and venture investors like Viking Global Investors and Y Combinator.
Boost hopes to tackle issues in agriculture like spoilage, bacterial contamination and pathogen infestations, as well as addressing diseases that can affect plant health directly.
Boost is already working with an undisclosed biomanufacturing partner to develop its bio-fungicide.
“UMI’s decision to invest in Boost comes from our evaluation of their team, technology, and the associated market opportunities. We believe that Boost’s platform generates a unique data set that can be exploited for far superior products with many diverse microbiome applications in food and agriculture,” said Yota Hayama, an investor at UMI, in a statement. “These are critical areas to achieve food security and promote sustainable agriculture. We also expect Boost’s huge potential on other areas where microbiomes are utilized.”
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SaaS data protection provider Druva nabs $130M, now at a $1B+ valuation, acquiring CloudLanes
As businesses continue to move more of their computing and data to the cloud, one of the startups that has made a name for itself as a provider of cloud-based solutions to protect and manage those IT assets has raised a big round of funding to build its business.
Druva, which provides software-as-a-service-based data protection, backup and management solutions, has raised $130 million in a round of funding that CEO and founder Jaspreet Singh says takes the company “well past the $1 billion mark” in terms of its valuation.
Alongside this news, it’s making an acquisition to continue building out the storage part of its business (one of several product areas that it’s developing): it’s acquiring CloudLanes, a startup that was backed by Microsoft and others, for an undisclosed sum, in a deal that will likely be formally announced in early July.
The funding is being led by Viking Global Investors, the hedge fund and investment firm, with participation from two other new investors, Neuberger Berman and Atreides Capital, and existing investors Riverwood Capital, Tenaya Capital and Nexus Venture Partners (which were part of Druva’s last round of $80 million in 2017). The company, Singh said, is now nearly at a $100 million annual run rate. And although he would not disclose revenues, he said it’s now in a strong position to consider going public as its next step (or finally entertaining one of the many acquisition offers Singh admitted Druva gets).
“As we look at growth and the potential of what we are doing, the next obvious step is to look at public markets in the next 12 to 18 months,” he said in an interview.
The strong numbers (in terms of funding raised, valuation and performance) are a sign not just of Druva’s own business health, but of the opportunity it is tackling.
Spurred by a number of factors — the unfortunate rise of malicious hacking and data breaches, a massive wave of computing services that are creating mountains of data that can now be parsed for insights and a big move to cloud computing — the data protection industry is booming, with IDC predicting that it will collectively cost some $55 billion by 2020 to store and manage “copy data” (backups of the data), and that the data protection market will likely see revenues of $8 billion by 2020. Druva itself works with some 4,000 organizations today, with many in the mid-market in terms of size, with customers ranging across a number of verticals and including the likes of Build Group, American Cancer Society and Port of New Orleans — but as a measure of the opportunity, IDC notes that as of 2017 it had only about a 1% share (it doesn’t have more updated figures yet).
With a huge opportunity like this, it’s also an unsurprisingly crowded area in terms of competition. Singh points out that others looking to provide services in the same area include huge incumbents like CommVault and IBM, as well as newer entrants like Rubrik (itself on something of a fundraising tear in the last few years to capitalise on the same opportunity).
Singh notes that Druva stands out from these because it is the only one in the pack that started that remains an exclusively cloud-based, SaaS offering, meaning a company requires no hardware changes or appliance purchases in order to use it. While that’s an area that everyone is now moving into, his argument is that having started out here gives Druva a level of expertise and experience that cannot be matched by others — an important point when data protection is at stake.
The reality of today’s enterprise world is that there are a number of companies that are very far from being “in the cloud.” Despite the song and dance that we hear all the time about how cloud is the future, they are more often than not either relying entirely still on on-premises computing, or a hybrid solution. As Singh talks about it, this is almost irrelevant to what Druva is offering, and is in fact a segue to helping those companies come to trust and move more off premises, by giving them a strong example of how a cloud-based solution not only works, but can be less expensive and better than on-premise alternatives.
The CloudLanes acquisition fits in with this strategy, too: the company’s solution stack includes cloud storage that leverages on-premise data as a cache; ransomware protection; audit logs and more. “It will help us cover the gap between the data center and cloud more effectively,” Singh said.
This is also the belief that is propelling Druva to expanding into newer areas of business. Singh noted that business intelligence is going to be a big focus for the company, which makes sense: now that there is a lot of data being stored and managed by Druva, the next obvious move is to help parse it for insights. Security and making a wider move to secure endpoints are also areas that the company is considering, he said.
“We invest in companies based on a thorough assessment of their business models and fundamentals, the quality of their management teams, and cyclical and secular industry trends,” said Harish Belur, managing director, Riverwood Capital, in a statement. “Druva is doing something unique and special and, as a result, has grown at a phenomenal rate over recent years, all while keeping the trust and loyalty of its enterprise customers around the globe. We know this market is taking off and we continue to invest in Druva because we are sure it has the right product, executive team, and market execution to maintain leadership in the industry.”
I asked if companies like Amazon or Microsoft are friends, or frenemies, considering that they have a big part to play in cloud services. Singh said that so far, so good, since they are all more focused on infrastructure — or at least that’s where most of their strength has been up to now. Amazon, in particular, is a strong partner to the company he said, where Druva is often an early adopter of new tools of Amazon’s, and the AWS sales team regularly suggests Druva to customers for data protection and management services. Druva even happened to include a quote from the company in its news release:
“Druva is a leading Advanced Technology Partner in the AWS Partner Network,” said Mike Clayville, vice president Worldwide Commercial Sales and Business Development, Amazon Web Services, Inc., in a statement. “Druva’s solutions powered by AWS are changing the way data is managed and protected at thousands of companies globally. We’d like to congratulate Druva on its latest fund raise, and look forward to innovating with Druva to create new solutions that benefit our customers.”
Seems like that could be one to watch, as well, as both companies continue their cloud expansion, both independently and in competition with others.
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