China's Bits x Bites hits first close on second food tech fund

LPs include Temasek Holdings, Heritas Capital Management, and Henry Soesanto, CEO of Philippines-based food giant Monde Nissin, which owns UK vegetarian meat company Quorn. They were joined by a number of conglomerates and family offices with interests in food and bioscience across China and Southeast Asia.

Bits x Bites, which bills itself as China’s only agrifood technology VC, raised an undisclosed sum for its first fund in 2017 from a single unnamed LP. That vehicle has been fully deployed across 14 investments, with check sizes ranging from $1-3 million. Fund II is expected to make larger investments, including seed to Series B rounds in new companies and follow-on rounds in existing portfolio assets. China is the core target geography.

“China has built a vast digital ecosystem with impressive e-grocery and food delivery penetration, and these downstream platforms have been driving food and retail investment in China,” Matilda Ho, a general partner at Bits x Bites, said in a statement.

“However, without investment in upstream innovation, we won’t see meaningful improvement in farm production efficiency to sustain the rapidly growing food demand. And without biotech and ingredient innovation midstream, food products will fall short of consumers’ expectations in nutrition, clean label, taste, value, and transparency. These opportunities are what brought Bits x Bites and our LPs together.”

The new fund made at least three investments to date, including China’s Mojia Biotech, an essential nutrients maker that claims its bio-manufacturing system increases yield and limits pollution associated with conventional chemical synthesis. Follow-on capital has been provided to existing portfolio companies InnovoPro, an Israeli chickpea protein concentrate maker, and Tropic Biosciences, a UK start-up focused on crop gene editing.

Deal targeting is expected to otherwise encompass a range of China-relevant food supply chain categories such as precision agriculture, crop and animal health, protein alternatives, and artificial intelligence for farm automation. Previous activity has also demonstrated an interest in cell-cultured meat with participation in early-stage rounds for US-based Wild Earth and Israel’s Future Meat Technologies. Soesanto is also an investor in Future Meat.

Recent fundraising traction in this space includes Hong Kong and US-based Lever VC reaching a first close of $23 million on its debut food tech fund, which plans to raise $50 million for a global mandate that focuses strongly on China. Separately, Lever’s China Alternative Protein Fund has raised RMB40 million ($6 million) as of June and remains open.

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• Topics
• Greater China
• Fundraising
• Venture
• Cleantech
• China
• Temasek Holdings
• Food
• Agriculture