Temasek invests in China fund aimed at developing agrifood technology

Singapore

TEMASEK Holdings is making a further push into the agrifood space, with its participation in the US$30 million first close of a new fund to develop agrifood technology in China.

The Singapore state investment firm is one of the limited partners (LPs) of the fund, launched by Chinese venture capital firm Bits x Bites. Other LPs included Singapore-based private equity firm Heritas Capital Management, which focuses on health and related food tech, a spokesperson for Bits x Bites told The Business Times (BT) on Tuesday.

Also participating was Henry Soesanto, the chief executive officer of Monde Nissin, a Philippines-based food company that also owns UK meat-substitute product Quorn. Other investors in the first close included food conglomerates and family offices in China and South-east Asia. "These LPs' industrial footprint spreads across food and biosciences," the spokesperson said.

Bits x Bites expects a final closing of the new US$70 million fund in the coming months.

Temasek has been chomping away at the agrifood scene of late, throwing its heft behind firms such as US plant-based meat company Impossible Foods. BT reported in late 2019 that over the past five years, Temasek forked out over US$5 billion in the agrifood sector alone, with about a third involving early-stage investments.

Its managing director of agribusiness, Anuj Maheshwari, told BT at the time that the protein industry was growing at 2 to 3 per cent every year, and any solution with alternative proteins targeting that "will have a very big addressable market". He added: "We also feel that the solutions coming out of there will eventually achieve parity and be cheaper than animal-based proteins. That's something we want to keep on putting more capital behind."

Bits x Bites backs technology that seeks to build a more resilient and sustainable food-supply chain, with a focus on the Chinese market. It is managed by general partners Matilda Ho and Joseph Zhou.

By investing in early-stage Chinese and international founders - those in up to their Series B rounds - Bits x Bites hopes to advance bioscience, data science and processing technology to tackle challenges along the food-supply chain. This ranges from precision agriculture, crop and animal health, to protein alternatives and nutrition.

The new fund has also invested in its first portfolio company, Mojia Bio, a Chinese bio-industrial firm that produces essential nutrients, the spokesperson said. Its proprietary bio-manufacturing process increases yield while limiting by-product and environmental pollution from conventional chemical synthesis.

The new fund has also deployed capital in follow-on investments in Bits x Bites' previous portfolio companies. They include UK biotech startup Tropic Biosciences, which develops high-performance varieties of tropical crops, as well as Israeli chickpea-protein concentrate company InnovoPro.

Tropic Biosciences in June raised US$28.5 million in a Series B round led by Temasek, with participation from Bits x Bites and other investors.

Aside from the latest injection, Temasek has also put money into other funds and accelerators, such as the New Protein Fund set up by Big Idea Ventures, focusing on plant-based products and new protein alternatives. The New Protein Fund's first investment was in Singapore-based Shiok Meats, which is developing lab-grown seafood and meat.

In China, "nothing else is more urgent" today than growing self sufficiency and sustainability in food production", said Bits x Bites founder and managing director, Ms Ho. The drive comes amid the outbreak of African swine fever, which as hit pork production; the Covid-19 pandemic is also disrupting global supply chains and trade ties are still uncertain, she said.

Ms Ho noted that process innovations may include a discovery platform for novel agricultural inputs, bio-manufacturing of high-demand functional ingredients, or machine learning for farm automation. Such innovations help to raise the food system's productivity and improve the nutrition and safety of food products.