For Claudine Ying and Mimi Lau, partners of Hong Kong-based CGV Ventures, investing in the future of food security spans fermented oil, AI weeding technology, and more.
On her family’s farm in Australia, Claudine Ying grows avocados and over 30 types of fruit. Learning about soil, water and land quality inspired her to launch a venture capital firm with a mission to “help farmers first.”
“It was agriculture first, then food,” says Ying, partner at CGV Ventures, from her office in Hong Kong. “As you learn more and you have more insights, you realize these are things that we can’t really take for granted.”
Investing in agriculture may seem out of left field for the eldest daughter of billionaire Michael Ying, former chairman of Hong Kong-listed fashion retailer Esprit, but she says it was a natural progression from a shared “family hobby” of farming. In 2020, the former educator launched CGV alongside Mimi Lau, a former Goldman Sachs treasurer and executive director who now serves as partner of the fund. As an arm of the Ying family office, CGV invests in early-stage startups building technology for the food and agriculture industries, known as foodtech and agtech, respectively.
So far, CGV’s portfolio spans ten companies, with nine headquartered in the United States and one in Hong Kong. Its investments include San Francisco-based Brightseed, an honoree of last year’s Forbes AI 50 list that raised a $68 million Series B funding round last May led by Singaporean state fund Temasek, and alternative oils startup Zero Acre Farms, backed by billionaire Richard Branson’s Virgin Group, Collaborative Fund and Hollywood actor Robert Downey Jr.’s Footprint Coalition. CGV declined to reveal its assets under management (AUM) or annual returns.
It’s a growing fund, says Ying, and finding an “anchor point” among potential investments involved considerable trial and error. Sifting through hundreds of “innovative but crazy” ideas helped refine their search criteria for upstream and midstream solutions along the food supply chain. As they look towards a five to seven-year time horizon for their investments, CGV evaluates whether the science behind startups’ products has been derisked, the solution is a “must-have,” and the founder has the experience and ability to execute.
Still, there’s no fixed recipe for tapping cutting-edge foodtech and agtech companies, Ying says. At present, they are country-agnostic, having met with entrepreneurs from China, Brazil, Europe, Israel and more. She’s sampled products from prospective portfolio companies to gauge their market readiness – for one, before backing Zero Acre Farms, both Ying and Lau cooked with the company’s all-purpose fermented oils and were impressed by the results. “I’ve got a kid that’s really allergic to all kinds of stuff, so we pretty much can only use olive oil and avocado oil,” adds Ying. “This (Zero Acre Farms) cultivated oil is a game changer for us.”
One highlight of CGV’s portfolio is Farmwise, an agtech startup that builds AI-powered automated weeding machines. Their sensors help give tractors “eyes,” which can identify unwanted plants. To learn more about the startup’s operations, Lau knelt down in fields in Salinas, California – often known as the “salad bowl” of the world – and was impressed by Farmwise’s tech to instantly distinguish between helpful and unhelpful sprouts, often difficult to discern with the human eye. CGV backed Farmwise in 2022, the year it closed an oversubscribed Series B funding round of $45 million to further its expansion across U.S. farms.
“We’ve gone through and met many founders, a lot of whom we didn’t invest in, but they all wowed us with their passion,” says Lau, of Farmwise. “They have chosen to pursue something that is very uncertain…because employing technology into agriculture is not easy.”
Looking ahead, the pair says they are eyeing investments in Asia, starting with Hong Kong. CGV’s sole investment in Hong Kong is plant-based meat startup Good Food Technologies, which raised $1.5 million in a seed round led by Gobi Partners last March.
Among “booming Asian countries” like Singapore and China, severe food security risks outweigh climate concerns in driving interest in alternative proteins, according to Mirte Gosker, managing director of alternative protein think tank Good Food Institute APAC. “Building a more secure, sustainable, and just food system is not merely a choice in Asia…it’s a necessity,” says Gosker. “Conventional animal agriculture is ill-equipped to handle the escalating pressures of skyrocketing protein demand, land and water scarcity, and threats of viral outbreaks.”
With over 8 billion people in the world, global food systems will need to provide for an estimated 9.7 billion people by 2050, according to UN estimates. Geopolitical factors over the past year have also taken a toll on food security, as Russia’s invasion of Ukraine – with both countries comprising one of the world’s “breadbasket regions” – impacted exports of sunflower oil and wheat.
Supply chain woes also played a role in declining funding for agtech and foodtech startups over the past year, amid an ongoing drought in VC activity. In 2022, global funding in agtech and foodtech startups plummeted by 44% from the year prior to $29.6 billion, per a Marchfrom agtech VC AgFunder and Singaporean state-owned investment firm Temasek. In 2021, high tech valuations contributed to a record-breaking $51.7 billion in agtech and foodtech funding that year.
In the years to come, a key area in need of change is education, says Ying. Entrepreneurs and innovation in foodtech and agtech are needed, but students may not be drawn to the field. “We don’t ever see a world where it’s just tech, or just robots,” says Ying. “You need to cultivate still a younger audience, or younger talent pool, to maintain in agriculture the passion for innovation and quality.”
Education comes naturally to Ying, whose first venture in entrepreneurship involved teaching. In 2014, she launched Bebegarten Education Center, an early education center in Hong Kong, and sold it to English education group Monkey Tree in 2018. Ying graduated from the University of Hong Kong with a degree in education, and has previously worked on her family’s non-profit organization Yanai Foundation, which offers educational and medical assistance to youth in mainland China.
Investing in foodtech and agtech is a matter of survival, according to the partners – as Ying points out, agriculture and food security are “first principles” for our future.
“We all have to eat,” says Ying. “And we can’t keep having images of the past where [farming] is laborious, under the sun. There’s a bit of that, but it’s meaningful and can be really good economics.”
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