October 31, 2016

The first food-focused venture capital fund and accelerator has been launched in China.

Founded by Matilda Ho, Shanghai-based Bits x Bites will invest in food tech startups situated along the entire food value chain from field to fork in order to address the specific challenges faced in China’s food system.

Over the past three decades, China has rapidly undergone a significant shift from being largely rural and agrarian to a more urban and market-engaged society. This rather jolting change has brought food production away from fragmented small holders and into the realm of commercially scaled industrial agricultural production. And although this has resulted in a rising of the standard of living in the country, it has also created a system fraught with challenges to be addressed including food safety, environmental contamination, and standards of animal husbandry.

While attending business school in the U.S., Matilda Ho experienced a new relationship to food, becoming more food conscious and more aware of the importance of sustainability and the connection between food production and the environment.

“I started to develop more and more knowledge and experiences in all the challenges in [China’s] food supply chain,” Ho told Tech in Asia. “That’s how I realized that this is something that I really want to tackle.”

Ho noted that China’s consumers are willing to pay more for higher quality, safe, and sustainably produced food, however the country’s food and beverage companies have not kept pace with consumer sentiment, often becoming mired in food safety scandals, increasing consumer mistrust.

“There are more and more entrepreneurs aware of [China’s food system] challenges, but they don’t have enough capital, experiences, or the mentor network to help them succeed and grow rapidly,” Ho told Tech in Asia.

As a means to a solution, Bits x Bites has identified four areas for investment focus – agriculture, food production, distribution and retail, and learning and sharing. The firm’s intensive 120-day accelerator program, which will begin its first class in February 2017, will offer free co-working space for up to six months, free use of its kitchen lab and shop facilities, and mentorship by a curated team of experts and advisors including leaders from Italy’s food hub, Future Food Institute, as well as engineers, startup founders, and product designers according to Food and Drink International. The program will also offer access to farms, logistics, and wholesale and retail partners, and could possibly follow up with Pre-A and Series A funding.

The firm will be accepting applications from startups involved in a wide range of applications from urban farming to online supermarkets and e-commerce ventures, to alternative protein producers like cricket flour manufacturers. However, it will also be accepting application from food tech companies that are beyond the needs of an accelerator program and are purely seeking venture capital funding.

“Those type of startups need a platform, a community, and the access to help them grow,” said Matilda. “That’s why we founded Bits x Bites.”

~Lynda Kiernan