October 28, 2020

By Lynda Kiernan, Global AgInvesting Media 

Apeel Sciences has raised another $30 million in new funding from the International Finance Corporation (IFC), Temasek, and Astanor Ventures. 

Together with the $250 in capital the company raised in May of this year, this round brings total funding for the company for  just the past six-month period to $280 million. 

Founded in Santa Barbara, California, in 2012 by James Rogers, a Ph.D. graduate of the University of California, Santa Barbara, with a grant from the Bill & Melinda Gates Foundation, Apeel Sciences’ technology  was originally developed to address post-harvest food loss being experienced in developing countries due to a lack of refrigeration.

Noted as a World Economic Forum Technology Pioneer, a CNBC Disruptor 50, and recognized as one of TIME Magazine’s Best Inventions and among Fast Company’s World Changing Ideas, Apeel Sciences has developed a method for extracting molecules from organic agricultural waste and byproducts – such as grape skins that remain after wine production processing or banana peels, leaves, or stems left over after harvesting – to create undetectable edible barriers derived from natural plant extracts. 

These barriers significantly slow the process of decay of fresh produce, making each piece of fruit its own microclimate and extending shelf life without refrigeration, a controlled atmosphere, or preservatives.

“It’s a misconception that people go hungry because we don’t grow enough food,” said James Rogers, founder and CEO, Apeel. The issue is the intermittency of supply and an inability to convert perishable assets into economic value.”

Working with the knowledge that spoilage is caused by oxidation and water loss, the coating, which can be easily washed away with water, protects fruit and vegetables through controlling the rate at which water and gasses enter, or are released by produce. This effectively makes obsolete the use of gas, wax, or other techniques currently used in the industry in the attempt to keep produce fresher longer.

The company stated that it will use the funds newly-raised along with its technology to help smallholder farmers in emerging markets – those that face the greatest effects of food insecurity and food waste – to extend the shelf life of their crops, and gain the ability to reach new markets.

The funding also will drive the company in reaching its goal of gaining access to new markets, including the U.S. and Germany.

“The harsh reality is that it is nearly impossible today for most smallholder farmers to get their produce to a marketplace that will pay for it before it spoils,” said Rogers. “Apeel was founded on the belief that we can improve food security around the world by using technology to create opportunities for those who have limited or no access to the global food system.”

Rogers continued, “The new funding from IFC, Temasek, and Astanor will enable us to not only give smallholder farmers more time to market their fresh produce, but also greater access to higher-value markets previously out of reach because of inevitable perishability.”

Growing something valuable is only beneficial if smallholders can get their valuable crops to market. Supporting agribusiness and agtech innovation in emerging markets is a key priority for IFC, the combines investments and advisory services to address high demand and escalating food prices in a sustainable and socially inclusive way.

Smallholders that manage up to five hectares produce more than half of the world’s fruit supply, but agricultural workers account for 65 percent of all poor working adults, and many smallholders are subject to abject poverty and hunger.

And while fresh fruits and vegetable production offer greater potential for return compared to staple crops, without refrigeration, the bulk of what smallholders produce can only reach local markets, where supply often outstrips demand, leading to significant food waste, food insecurity, and systemic poverty. 

Together with IFC, Apeel’s new smallholder programs will lead to the creation of Apeel-powered supply chains in sub-Saharan Africa, Mexico, Central and South America, and Southeast Asia that use Apeel’s technology to improve domestic supply chains and reduce food loss without refrigeration. The removal of the need for refrigeration will then enable smallholder farmers to access new market opportunities that were previously prohibitive due to a lack of cold infrastructure or rapid transport.

“Innovative technologies can change the course of development in emerging markets and save livelihoods, economies, and in this case, food,” said Stephanie von Friedeburg, interim managing director and executive vice president, and COO, IFC.

“We are excited to partner with Apeel to invest in a game-changing technology that can limit food waste by half, enhance sustainability, and mitigate climate change,” added von Friedeburg. “By joining our forces and expertise, we will also help local farmers, distributors, and retailers preserve produce and expand exports to markets that were previously too far to reach.”

Improving conditions for smallholder farmers has been a core mission for Apeel since its inception.

After being awarded $100,000 from the Bill and Melinda Gates Foundation in 2012, the foundation used Apeels’ Edipeel product to more than double the shelf life of cassava root – a widely produced crop across Africa and a main source of calories. Once harvested, cassava must be eaten or processed within 48 hours before it rapidly spoils – a fact that has limited African smallholder farmers from being able to commercialize their crops. This ability to extend the life of cassava and enabling commercialization has the potential to lift the market value of the crop by $1 billion in Nigeria alone.

Today, produce with Apeel’s technology is available nationwide in the U.S., Germany, and across Europe where it has reduced food waste by 50 percent on U.S. and EU retail shelves, while also extending shelf life of foods in the home environment where food loss is up to three times higher than at the retail level.

Now with this new funding and partnership with IFC, Apeel stated that it is one step closer to realizing a more participatory food system that provides economic opportunities for smallholder farmers.

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.