The State of FoodTech
June 2014 Executive Summary
From 2012 to date there has A significant pipeline of open been a new wave of investments innovation opportunities in innovative companies related has been generated, with to the food industry. An increased the potential to structure number of transactions was acquisitions, commercial deals coupled with the involvement of and partnership between big the major players of the venture industry players and startups. capital industry. P101 is positioned at the Startups operating in the food forefront of the food tech market tech area are revolutionizing and could act as a key player the way food is produced, in the innovation process: the distributed and consumed, and fund has invested in relevant are revitalizing an entire industry startups in this sector and it is with new business models and continuously scouting the market customer experiences. for new teams and technologies. Food Startups are hitting the headlines
Just Eat IPO Values It At $2.44BN, Company First To Test LSE’s New Tech-Friendly Market TECHCRUNCH - Posted Apr 3, 2014 by Mike Butcher (@mikebutcher)
Exclusive: Blue Apron raising new funds at $500 million FORTUNE - By Erin Griffith Posted April 7, 2014 3:36 PM ET
Tamburi Investment Partners Invests 120 Million Euro in Eataly PAMBIANCONEWS - Tuesday 11 March 2014
The food industry is transforming itself through open innovation, digital technology and new customer experiences | 3
Confidential Information
Market overview: Food & Beverage funding scenario
60 Total 50 Food & Beverage funding 40 Q1 2012 - Q1 2014* 30
20
10
Number of exits Number of 0 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1
M&A • $1.38 Bn invested (VC, PE, Corp VC, Angel) in 2013, mostly US data (Food & Beverage) • 397 deals; +37,4% yearly growth IPO (Food & Beverage) • Q1 2014 was the best quarter in term of number of deals
| 5 * Source: CB Insights
Confidential Information Market overview: Food & Beverage M&A
60 Total 50 Food & Beverage M&A deals 40 Q1 2012 - Q1 2014* 30
20
10
Number of exits Number of 0 2012 Q2 2012 Q3 2012 Q4 2013 Q1 2013 Q2 2013 Q3 2013 Q4 2014 Q1
M&A • 197 exits last year (Food & Beverage) • +55% yearly growth IPO (Food & Beverage) • Q1 2014 was the best quarter in term of number of exits
| 6 * Source: CB Insights
Confidential Information Market overview: Food Tech & Media
$2.0 Total Food Tech $1.6 & Media VC $1.5 148 $1.2 investments $1.0 $0.9 and M&A deals $0.6 2012 – 2013* US $0.5 136 Total in investmenting in billions in investmenting Total investments Number of
2012 2013
Food Tech/Media Food Tech & Media investments higher Investment ($B) than Food & Beverage
Food Tech/Media Investment ($B) • 2013: $1.6 Bn invested in in Food Tech with 148 deals (Adjusted) • 2012: $1.2 Bn invested with 132 deals Food Tech/Media • Average deal size from $4.6 M to $5.6 M Investment Deals • Excluding the Media component, $930 M invested in 2013 and $560 M for 2012 | 7 * Source: Rosenheim Advisors
Confidential Information 360° change: Ordering, delivery, analytics, media, social
Each area of the food experience is disrupted by digital technology
Publishers
Grocery / CPG Coupon Distributors
Mobile / Online Ordering Next Gen Restaurant Ordering / Payments Restaurant Coupons Restaurant Reviews and Deals and Search
Recipes and Cooking Digital Content Mobile / Online Communities Ordering (B2B)
Grocery / CPG Coupon Aggregators
Personalized Restaurant Loyalty Restaurant Discovery Rewards Vertical Ad Networks * Source: Rosenheim Advisors Rosenheim Source: * Grocery / CPG Mobile Coupons
Recipe Box Product Guides Grocery / CPG Online / Offline Restaurant Marketing | 8 and Search and Discovery Loyalty Rewards Commerce Communities Reservations / Analytics
Confidential Information Open innovation: leveraging lean startups
“Everyone eats, everyone is online; what the hell we waiting for?” Dave McClure – 500 Startups
Space for disruption: • New layers in the food experience: local, social, mobile, metadata, ecommerce, digital payments, analytics, retail • Inefficiencies still exist: personalized & health choices, logistics & routing, waiting time, social layer, recommendations. • New startups are lean, fast & experiment at low cost
Open innovation is key to corporate success: • Example: Google has acquired 91 startups since 2010
Open innovation trhough food startups: • Startup acquisitions bring high-potential innovation at low cost | 9
Confidential Information Food Startups: Areas of innovation
• Recipes and Cooking Communities • Recipe Box and Search • Publishers • Digital Content • Vertical ad Networks • Product Guides and Discovery • Grocery CPG: Coupon Distributors, Coupon Aggregators, Mobile Coupons, Loyalty Rewards • Mobile / Online: Ordering, B2B transactions • Food Ecommerce • Food Delivery • Product Deals / Offers • Restaurant Review and Search • Personalized Restaurant Discovery • Reservations, Ordering, Payments • Restaurant Marketing / Analytics
| 10 * P101 elaboration on data from Rosenheim Advisors
Confidential Information Trends in the new food tech startups
Grocery delivery integrated with recipe discovery and cooking-related educational material
Pick up spots delivery options (beyond home delivery), weekly featured food
Focus on health, nutrition, lifestyle and women consumers
New verticals: tools for restaurants, office catering, school catering, lunchboxes
Video for food lovers, cooking lessons and other rich media content
Global repositories beyond restaurants: recipes, chefs, kitchenware | 11
Confidential Information We are not in the 90s
Dotcom companies …times Have changed: failed because of flawed BuT • Robust business models business models and wrong • Smarter investors cost structures • Lean approach: experiment, fail fast, learn • Drop in start-up launch & development costs
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Confidential Information The customer experience
Examples from the Italian ecosystem
I Plan I buy
I cook I share
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Confidential Information Example of a “hot spot”: the food delivery area
During the first 4 months of 2014: $177 M VC investments in the food delivery area
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Confidential Information Food delivery hits 5-year high
200 25
150 20
100 15 10 50 5 Million USD deals Number of 0 0
2009 Q22009 Q32009 Q42010 Q12010 Q22010 Q32010 Q42011 Q12011 Q22011 Q32011 Q42012 Q12012 Q22012 Q32012 Q42013 Q12013 Q22013 Q32013 Q42014 Q1
Funding (food delivery) Q1 2013 -Q1 2014:
Deals (food delivery) • Food delivery startups funding up 51% • 4 out of 5 of Food delivery VC deals take place outside Silicon Valley • European example (Berlin): Delivery Hero raised $300 M overall
| 15 * Source: CB Insights
Confidential Information Food Tech investments topology
Advertising, Communities Restaurant Mass Restaurant Ecommerce Grocery marketing & media services market Order & delivery & analytics & delivery Marketplaces
Media Physical & digital & delivery content focus focus
| 16 Niche focus
Confidential Information Investors in food tech companies
Example:
JustEat raised funding from top investors such as Greylock and Index. IPO in April 2014
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Confidential Information Food Tech & Media investments 2013 - Selected
CompanY $M CompanY $M CompanY $M CompanY $M Olo 5.0 Chewse 1.0 Tastemade 10 MyCheck 4.2 Abe’s Market 5.0 Eatclub 5.0 Punch 3 Tabbedout 7.75 ChowNow 3.0 FarmersWeb 1.0 Glam Media 25 MouthFoods 1.5 LocalResponse 1.5 LoyalBlocks 9.0 Blue Apron 5 Index 7 EatStreet 2.0 Swipely 12.0 Dryinc 0.9 Yub 12 Blu Apron 3.0 Marqeta 14.0 MyFitnessPal 18 Postmates N/A Kitchensurfing 1.0 Foodpanda 20.0 Aisle50 2.6 TouchBistro 4.5 ClubW 3.1 Panna 1.3 Clutch 5.3 Qloo 3 Moment Feed 1.8 EMN8 51.5 DoorDash 2.4 Sprig 1.2 Perkville 0.5 Revel Systems 10.1 Leaf 20 Zomato 37 Food 52 2.0 E La Carte 13.5 Goldbely 3 ShapeUp 7.5 500friends 5.0 MyWebGrocer 154.0 HelloFresh 7.5 Delivery Club 8 Tastemade 5.3 Belly 12.1 GoodEggs 8.5 The Orange Chef 1.2 Relay Foods 8.2 Naked Wines 10 Zipments 2.25 MomentFeed 5.5 HealthyOut 1.2 Gratafy 1.45 Mogl 1.1 Freight Farms 1.2 Plated 1.4 Delectable 2 IfOnly 12 Gousto 2 SavingStar 9.1 GrubHub N/A Real Food Works 1.5 PowerSupply N/A Kitchensurfing* 3.5 Restorando 13.3 Butter Systems N/A Daily Secret 1.25
Excluding $154 M MyWeb Grocer growth deal, Foursquare $35 M deal and Yelp’s $288.9 M new stock offering. Excluding angel investments and deals below $500k | 18 * Two deals in the same period
Confidential Information Food Tech & Media investments 2014 (January-June)
CompanY $M CompanY $M CompanY $M GetYourGuide 4.5 Dash 1.2 Meican 10 BrightFarms 4.9 Granular 4.2 PunchTab 6.5 Yiftee 2.1 Postmates 16 Blue Apron 50 Food Genius 1 iFood 2 DeliveryHero 85 Drizly 2.25 Tapingo 10.5 AgLocal 1.3 Venga 1 Foodpanda 20 ezCater 3 Farmlogs 4 Noom 7 NatureBox 18 Main Street Hub 14 Kitchensurfing 15 Munchery 28 Culinary Agents 0.5 Ricebook 7 Drync 2.1 Delivery Hero 88 Spring 10 Spoonrocket 11 Planted 5 TouchBistro 1.5 EatStreet 6
Excluding angel investments and deals below $500k
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Confidential Information Food Tech & Media M&A 2013 - Selected
Buyer Target Value ($M) Buyer Target Value ($M) Yahoo Alike N/A GoDaddy Locu 70 Pinterest Punchfork N/A Groupon Plumfare N/A Pinterest Livestar N/A Zero Point Zero FoodRepublic N/A TripAdvisor Tiny Post N/A Groupon Sidetour N/A Twitter Spindle N/A Food52 RealTime Farms N/A OpenTable JustChalo 11 Anderson Press Caskers N/A OpenTable Foodspotting 10 First Data Corp Perka 30 DeliveryHero Hungryhouse N/A eBay Shutl N/A DeliveryHero EatitNow N/A 8Coupons Clipless N/A PMB Pushpins 10-15 (est.) AgSquared Local Dirt N/A Fancy Samplrs N/A UnderArmour Map My Fitness N/A Jawbone MassiveHealth N/A VoxMedia Curbed Network 20-30 (est.) Coupons.com KitchMe N/A GoodEggs LolaBee Harvest N/A Target Cooking.com N/A Coupons.com Yub 30 Target Chefs Catalog N/A Cookpad Althecooks N/A Seamless (merger) GrubHub N/A OpenTable Quickue 11 EMN8 Snapfinger N/A Lifelock Lemon 42.6 Harvest Mark ShopWell Solutions N/A Square Evenly N/A | 20
Confidential Information Food Tech & Media M&A 2014 (January-June) - Selected
Buyer Target Value ($M) MacMillan Publishers Cookstr N/A Leapset Punchfork N/A Walmart Yumprint N/A Kroger You Technology N/A Datalogix Spire Marketing N/A MyWebGrocer Buy4Now N/A OpenTable NessComputing 17.3 XO Group Gojee N/A Mobivity SmartReceipt 3 JustEat Meal2Go N/A Blue Bottle Cofee Tonx N/A Priceline OpenTable 2600
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Confidential Information Why acquire? A
Example:
Walmart acquired Yumprint in Q1 2014 to improve its grocery delivery strategy
Yumprint analyses recipes, nutritional information and consumer preferences The website also matches ingredients with advertisements and prepares shopping lists
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Confidential Information Why acquire? B
Typical buyers needs in food tech acquisitions:
• New sales & distribution channels • Integration with databases and APIs • Access to younger population • Access to mobile & social layers • Geographical expansion • Expansion to new product categories • Content acquisition • Talent acquisition
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Confidential Information Significant IPOs in 2014
In Q1 2014 tech companies saw robust M&A activity and exit potential. Food tech startups reached successful IPOs
Just Eat: valued at $2.4 BN
GrubHub: valued at $2.7 BN
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Confidential Information Growing Ecosystem: Incubators
Lean food startups now growing in vertical incubators VC funds such as Accel Partners are supporting the process
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Confidential Information Growing Ecosystem: Events
Tailored events are structuring the ecosystem and building knowledge about go-to-market and growth
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Confidential Information Big players join the race: delivery
Big retailers and ecommerce websites are increasingly involved in same- day grocery delivery
• “Fresh service”: Started in 2007 in Seattle • Recently expanded to Los Angeles • 500k available items • Now expanding to San Francisco and other 20 locations, including non-US
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Confidential Information Big players join the race: consumer giants release APIs
Ingredients and other food datasets are increasingly available trhough new APIs
Examples:
A Kraft Application B Nestlè GoScan app Programming Interface | 28
Confidential Information More innovation A Food 3D Printig
New desktop 3D printers shape food as their “ink”
| 29
Confidential Information More innovation B Drone delivery
“30 min delivery service” trough unmanned aerial vehicles
Program confirmed by Bezos in the 2013 letter to shareholders 6th generation of drones developed at Amazon | 30
Confidential Information More innovation C Big Data & Food Tech
Data science is overtly applied by several food startups and big tech players
Example: recipes & ingredients
Companies Recipe sourcing models
Food bloggers
Social networks
Semantic tech
All industry players Databases | 31
Confidential Information Italian food startups are growing
E-commerce & delivery
Restaurant services
Social food
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Confidential Information How to leverage the market
Internal innovation:
• Explore the new layers generated by digital technology. • Each process in the food experience could be leaner, smarter and more efficient
Open innovation:
• Look for M&A opportunities: the new wave of food startups is generating smart and scalable solutions • Key factors are low development costs, access to new demographics, innovative processes and new sales & distribution channels
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Confidential Information P101 as Innovation Hub
Powering the Italian Ecosystem:
• P101 is a venture capital fund focused on digital technology
• The firm is positioned at the frontier of the market and screens hundreds of entrepreneurial projects per year
• The fund is empowered by a network of incubators, research institutions, investing partners and entrepreneurs
• P101 invests in innovative companies with a significant portfolio allocation in food tech & media startups
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Confidential Information Disclaimer
The attached information is not intended suggestion or solicitation of public savings and is exclusively addressed to the recipient specified above (the “Recipient”). All the data in the present document are for information only and Programma 101 will not be liable for any action the Recipient may decide to take in total independence and autonomy. The information included in this document is subject to the risks and uncertainties of the Internet, Media and Telecoms markets. All forecasts reflect market parameters, assumptions and other fundamentals that may be subject to change and therefore affect future results. The Recipient declares to have specific experience in the field of investments in financial instruments and to be properly advised by qualified consultants in the valuations of their investments. The information in this document is Confidential and must be treated as such.
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Confidential Information - www.p101.it [email protected]