Africa has long struggled with food insecurity, and those struggles have been exacerbated by soaring fertilizer prices coupled with more consistent extreme weather conditions as a result of climate change — two issues that are unlikely to let up anytime soon.
Fortunately, new innovations in food technology could provide a respite to Africa’s food insecurity dilemmas, and investors are betting big that these innovations could provide an opportunity to help feed a lot of hungry people while enabling them to make a lot of money in the process.
At least, this is what some of the data indicates, according to AgFunder, which is a venture capital firm investing in new technologies that are actively transforming the world’s food and agriculture systems.
In its most recent report on food tech investing in Africa, AgFunder found that investments in food tech in Africa increased by more than 160% from 2020 to 2021, with African food tech companies collectively raising over $1 billion since 2017.
Here are some key highlights from the report:
- 119 agrifoodtech companies in Africa raised funding in 2021.
- Deal count has risen consistently in Africa over the past five years, growing from 51 deals in 2017 to 99 deals in 2020 to 150 deals in 2021.
- Agrifoodtech in Africa continues to be a very early-stage market, with 80% of deals being seed stage.
- African agrifoodtech startups raised about $400 million in H1 2022.
- Some companies that raised in 2021 have already inked bigger rounds in 2022.
There are a number of different agriculture and food technology companies that have been successful in raising capital in Africa, but one I’m particularly bullish on is Mogale Meat Company, which is making cell-based meat accessible to the African market.
If you’re unfamiliar, cell-based meat (also called cultivated meat or cultured meat) is meat that is produced by cultivating the cells of animals and actually “growing” the meat products in labs.
This meat is essentially derived from the same source of cells that ultimately become meat in animals — the same cells that comprise conventional meat from animals also comprise cell-culture meat, with muscle cells, fat, and connective tissue adding flavor.
Now, cultivated meat is not just an “interesting idea.” This stuff is actually being grown, tasted, tested, and even sold to consumers. This IS happening, and we are witnessing history in the making.
That being said, we are absolutely at the earliest stages here too.
It is unlikely that cultivated meat will provide any meaningful contribution to global meat supplies before 2030. But this is also the time when we’re seeing the smart money staking their claim because this is the stage where they get the most bang for their buck.
And if you don’t believe it, check out this list of some of the biggest investors in the cultured meat (and dairy) space thus far:
- Tyson Foods — market cap: $31.5 billion
- ADM — market cap: $44.94 billion
- Cargill — $134.4 billion in revenue (FY 2021)
- Ingredion — market cap: $6 billion
- Yum! Brands — market cap: $34.17 billion
- JBS Foods — market cap: $13.49 billion
- Nestle — market cap: $333.5 billion
- Coca-Cola — market cap: $275.36 billion
- Givaudan — market cap: $31.86 billion
- Temasek Holdings — net portfolio value: $291.79 billion
- Baillie Gifford Global Investment Management — $454.9 billion in assets under management
- Bill Gates — net worth: $110.4 billion
- Richard Branson — net worth: $4.2 billion
- Elon Musk — net worth: $271.2 billion
- Kimbal Musk — net worth: $700 million
- Jeff Bezos — net worth: $161 billion
- Marc Benioff — net worth: $7.6 billion
- Peter Thiel — net worth: $4.9 billion
- Eduardo Saverin — net worth: $9.1 billion
- John Mackey — net worth: $75 million
- Sergey Brin — net worth: $95.3 billion
For the sake of full transparency, I’m also investing in the cultured meat space and will continue to do so for the foreseeable future.
And one company I’m keen to invest in is Mogale Meat Company.
Now, while Mogale Meat is not publicly traded, you can get some exposure to the company through CULT Food Science (OTCBB: CULTF), which operates as a sort of publicly traded venture capital fund with an exclusive focus on cultivated meat, cultured dairy, and cell-based foods.
CULT Food Science recently took a position in Mogale Meat and provided its basic rationale for making the investment:
The Horn of Africa is experiencing its worst drought in more than 40 years, and more than 18 million people face severe hunger in countries throughout the continent, including Ethiopia, Somalia, and Kenya. As Mogale Meat develops and grows as a venture, its mission becomes clearer as to why it must prioritize the production of cell-based meat in a [continent] that is not only struggling with climate change but also severe hunger. Cellular agriculture significantly reduces water and land usage by up to 92% in the production of food compared to traditional methods.
While food insecurity issues are not monopolized by Africa, the Mother Continent is the most vulnerable to the rising pressures of climate change. This is undoubtedly a crisis of epic proportions but also a massive opportunity for investors seeking to do well by doing good.
You can read more about CULT Food Science here.
And you can read more about Mogale Meat Company here.