March 22, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Founded in 1926, Tnuva is the largest food brand in Israel with the country’s largest distribution network for chilled and frozen products, a 15 percent share of the overall food market, and a 50 percent share of the dairy market in the country, generating revenue of over $2 billion. It sells approximately four million products per day representing a wide range of dairy, meat, eggs, fish, frozen vegetables, pastries, and frozen and chilled foods. It also is the Israeli leader in the field of alternative dairy and protein products. 

However, Tnuva is also a groundbreaker in regard to food tech. In September 2019, the company was a member of a global consortium including Finistere, venture investor OurCrowd, and leading Israeli beverage company Tempo Beverages, which officially launched their NIS 1 billion (US$280 million) “Fresh Start” FoodTech Incubator.

As its next move to reinforce its role as a food tech pioneer, Tnuva announced it is launching a new food tech venture fund called Tnuva NEXT. Focusing on cultured meat, alternative proteins, customized nutrition solutions, plant-based substitutes, and fermentation and smart food processes, the fund, which will be led by Yaakov Chen, Tnuva Deputy CEO and CFO, and Shay Cohen, Tnuva’s chief innovation officer, is expected to make up to three investments per year in incubator startups, Seed, or Series A rounds. 

Haim Gavrieli, chairman of Tnuva, noted that the launch of Tnuva NEXT is part of a larger strategic plan for the company, saying, “Tnuva’s investment fund realizes the company’s strategy of investing in growing fields like foodtech, while identifying opportunities and creating innovative processes, including financial partnerships and cooperation, all part of the company’s preparation for initial public offering.”

Joining What Exists

In September 2019, Tnuva was part of a consortium consisting of agrifood investor Finistere, venture investor OurCrowd, and leading Israeli beverage company Tempo Beverages which officially launched the NIS 1 billion (US$280 million) “Fresh Start” FoodTech Incubator. 

When it was launched, the group stated that the fund will focus on investment opportunities along the entire food and beverage supply chains, with a particular focus on milk and protein substitutes; improving nutritional value and personalized nutrition; innovative raw materials; smart food packaging, cannabis; and IoT, AI, and Big Data.

Over the course of eight years (to 2028) the partners intend to provide know-how, international connections, and financial framework for more than 40 startups with NIS 200 million (US$56.6 million) in direct operational costs, and will take the lead on attracting and fostering follow-on investments estimated at NIS 800 million (US$226.6 million), which will be backed by the consortium partners, venture capital funds, and global companies.

Another major announcement was made in January of this year, when Tnuva Group and Pluristem Therapeutics announced their collaboration to develop, manufacture, and commercialize cultured cell-based food products. 

This endeavor was launched with the incorporation of a new company – NewCo – in which Tnuva will invest $7.5 million at a pre-money valuation of $40 million, with the option to invest an additional $7.5 million over the first 12-month period following the closing.

“We chose to collaborate with Pluristem because we believe it owns one of the most advanced cell production technologies in the world,” said Gavrieli at the time. “We expect the collaboration between the companies to revolutionize the cultured food industry and develop the next generation of alternative proteins.”

Commenting on Tnuva’s diverse food tech initiatives, Eyal Malis, CEO of Tnuva Group, said, “Tnuva conducts its many innovative processes in a number of platforms: investment in startups, the tech incubator, joint research with academic partners, joint projects with the Innovation Authority, beta site programs, joint developments with partner companies, and more.”

Data from Startup Nation Central shows just how strong the food tech ecosystem is in Israel, where companies in the space raised $640 million last year, more than the combined total from the previous five years, making Tnuva’s expansionary evolution from food giant to include food tech investor a savvy one.

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com. 

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