Why 2021 Might be the Year That the Food-Health Connection Hit the Mainstream

We’re living through one of the broadest periods of innovation and disruption in the last 50 years. What digital technology and connectivity did for the software business and Web 1.0 two decades ago is now expanding into new, and potentially far more impactful, areas. This includes industries like agriculture, where genomics, soil science and other innovations are driving up yield and nutrition while driving down cost and harmful environmental impacts. It’s happening in healthcare as well, leveling the playing field for care and addressing chronic, life-altering conditions in new ways.

This disruption is having an outsized impact on iSelect and the companies we invest in simply because many of our portfolio companies operate in these industries. To put it modestly, many of them are responsible for driving these innovations forward.

That said, 2021 was an exciting year for us at iSelect with a number of notable exits, investments and commercialization moves at our portfolio companies. Below are just a few of the highlights.

Benson Hill Went Public

In May, crop genomics company Benson Hill, one of iSelect’s core portfolio companies, announced plans to go public via SPAC, a deal that was completed on September 30, 2021, valuing the company at around $1.35 billion. The more supported the company’s continued growth in the $140 billion plant-based meat segment and broader $5 trillion agri-food industry, offering a pure-play ESG investment opportunity tied to improving human health and driving decarbonization.

As iSelect Managing Partner described it: “This is simply the start of a transformation in Food and Health. We have been investing in this space for 7 years, long before others realized. It will take a little time for the public markets to fully grasp what we have seen in the private markets. We are just getting started. Benson is the cornerstone.”

iSelect Partnered with The Nature Conservancy

As part of its effort to “encourage cross-sector commitment to innovations that target the specific issue of soil health,” global nonprofit The Nature Conservancy (TNC) invested via iSelect in five of our portfolio companies including Growers Edge, Kula Bio, Pattern Ag, Stoney Creek Colors and SwarmFarm.

“Deteriorating soil health underpins many of the agricultural challenges facing us this century – from climate and biodiversity, to food security and fresh water,” said TNC’s Director of Agricultural Innovation Renée Vassilos. “No other sector impacts the ground beneath our feet to the extent agriculture currently does. The science of soil health solutions is becoming more evident every day, but the pace of market-driven innovations has so far lagged the need for action. By putting our money where our mouth is we’re optimistic about the potential of our portfolio companies to accelerate solutions to the soil health challenge.”

Bonumose Teamed Up with Hershey

Following an investment from The Hershey Company in early 2021, alternative sugar developer Bonumose announced plans in October to build a new $27M R&D and manufacturing facility near its Charlottesville, VA headquarters in partnership with the global chocolate giant.

Hershey said the move marks “an exciting next step in our BFY (aka Better For You) journey,” explaining that in addition to the Bonumose partnership its internal team is “focusing R&D capabilities on initiatives such as recipe development and technology as well as advocating to the FDA for labeling exemptions in order to help us make more BFY options a reality with the use of rare sugars.”

Kula Bio Closed a $50M Series A Round

Working on new technologies to remove nitrogen from the air and put it into the soil, Kula Bio’s Kula-N platform attracted the attention of Chris Sacca’s Lowercarbon Capital, which led their Series A round at a 4.2x value increase. Although it closed in 2022, the deal had been in the works since late 2021. Kula Bio’s technology also “energizes” the natural bacteria that produce this effect with a carbon-rich energy source that allows the bacteria to build up larger-than-normal stores of nutrients.

“Today, over 90% of fertilizer in use is still synthetic and a significant contributor to global greenhouse gas emissions and damage to local water supplies and land,” Bill Brady, founding CEO and director of Kula Bio, said in a statement. “Demand for our solution has been incredibly strong. We are committed to help farmers operate sustainably without sacrificing crop yield.”

Molecular Assemblies Joined a DOD Project for On-Demand DNA/RNA Vaccine Manufacturing

COVID-19 opened a lot of eyes to the importance of speed when it comes to medical treatments and vaccines, especially in response to a pandemic. That’s why Molecular Assemblies signed on to help the Department of Defense’s R&D arm (aka DARPA) develop a rapidly scalable and deployable mobile platform for vaccine development. Its enzymatic synthesis is a way to replace cumbersome chemical synthesis technology that requires hazardous chemicals and extensive post-synthesis processing. Molecular Assemblies is receiving $100,000 in grant money per month through February 2023 as part of the program.

Brightseed Partnered with Ocean Spray

Of all the partnerships that Brightseed announced last year, its work with Ocean Spray might be the most exciting because it leverages Brightseed’s artificial intelligence to “unlock new compounds inside the cranberry, powering next-generation health innovation in the superfruit’s healthy product line.” Eventually, this might lead to a comprehensive nutritional profile of the cranberry and unlock potential health benefits from its previous unknown bioactive compounds.

Said Katy Galle, Senior Vice President of Research & Development at Ocean Spray Cranberries: “Similar to how different grapes produce different wine varietals, each cranberry strain can be extraordinarily diverse in their phytochemical composition, resulting in different colors, flavor nuances, size, and a trove of health-promoting bioactive compounds. Our agreement with Brightseed puts us on a path to profiling our cranberry varieties and understanding their health potential like never before. The insights from this agreement will support us as we continue to innovate healthy products for our consumers, in addition to informing how we grow, separate, and treat our cranberries to optimize for target health benefits and sustainability.”

Consideration

With 2021 well underway and with public markets still strong, we think it is an important time to highlight some of the key private market, venture investment themes that iSelect fund has identified for the year. We believe technologies transforming the Agriculture, Food and Wellness markets will flourish, with a focus on four areas: technologies that enable better food choices to drive better health outcomes, technologies that drive better, more profitable farm operations, technologies that drive the Consumerization of Healthcare, and biome-based treatment technologies. At iSelect, we invest for impact AND performance. We offer qualified investors access to emerging growth companies through our national venture capital strategy. Our unique structure allows our investors to continue to invest in these companies as they develop.

Timing

Why is now the right time for venture? The answer is that now is not explicitly the right time. Venture is something we need in our economy at all times. Now is not better than any other particular time. The question is, why ever stop? When we look at the challenges we’re facing in food and healthcare the reality is there is someone, somewhere who has an insight about how to build a product that will solve those problems. And if they put the right resources to it, they will succeed. As long as we need new technology to make life better or make our lives more enjoyable, we need venture capital to help fuel those entrepreneurs.

What is iSelect as a product?

iSelect is a very unique product, but when you break it into its parts it’s fairly easy to understand. On the front end we’re a traditional venture capital fund. We have a diligence process. We have an investment process. We have categories of industries where we have focus and real expertise, and we invest in companies in those areas that meet requirements for the fund. On the back end we’re unique in that we don’t raise a large amount of capital at one time and deploy it over the life of our fund. Each deal that we bring onto the fund, our investors have to prove and determine to invest in that deal. We have to constantly prove our diligence standards. It’s accessible, transparent and easy for investors to come in and see our comprehensive process.

What is the ideal iSelect company?

We are looking for founders that are passionate and we want the problem they’re trying to solve to be big, real, and painful. We want the solution to be revolutionary and we want our capital to be able to help them solve that problem. We want to know that they have customers involved and that the solution they’ve come up with actually meets those customers’ and market needs. And we want the team to be capital efficient with the money they’re spending.

What does the ideal iSelect company look like?

We’re looking for a company that has an opportunity to have a 10x return to our investment or greater in a period of three to seven years. What excites us at iSelect are companies that are solving big problems. We want companies that are going to be the Monsantos of the future. Not just in the size and the scope, but the impact they have on people’s lives. We want to create positive impacts on people’s lives, so we invest in areas like agricultural production and areas like producing healthy foods for our kids. They are problems that impact real people’s lives on a daily basis. That’s what we’re trying to do at iSelect. We’re trying to solve the big problems out there. Find ways to bring capital to the entrepreneurs who are the real heroes out there getting up every morning, beating away at these things that are problems that you and me and everyone else faces in their everyday lives.

What is iSelect?

iSelect is a venture capital firm. What that means is we look at hundreds and hundreds of different companies and we apply tough diligence standards to each of them, looking at whether the team has a good plan for growing the business, whether the team is qualified and credible, and more. We do that to resolve the few who provide the best opportunities for investors. And then iSelect takes that smaller set of investments and goes to investors who are interested in venture capital and provides a way for them to invest in these companies, either individually or all at once. We co-invest alongside other venture capitalists. We source transactions through to an exit where the company would become public or get bought. And we manage that whole investment process on behalf of our investors.