Funds: Linfa Ventures aims to raise 80 million
Gaiani: "The food of the future is a high-tech challenge"
Riello Investimenti Partners, an independent asset management company, has decided to focus on innovation in the agri-food sector, launching a specific fund, Linfa Ventures, which aims to raise at least 80 million Euros from qualified and institutional investors, with an initial closing planned for approximately 40 million Euros by the end of 2021. Resources that will be invested in late stage and growth companies, ie startups with a successful business model but which need capital and management to accelerate growth. Linfa Ventures is an initiative created in partnership by Marco Gaiani and Nicola Riello. The first is a long-time manager of the food and consumer goods sectors, with experience in Procter & Gamble and Ferrero, and subsequently entrepreneur in catering and business angel and co-founder of start-ups, including "Seeds & Chips" . Gaiani explained to EFA News which technologies the new fund looks at with more attention.
Efa: What prompted you and Riello Investimenti to invest in foodtech and agritech?
Gaiani: The many opportunities on the market. First of all, these are two extremely large and important sectors for the growth of the world economy. In Italy the agri-food sector represents 15% of the GDP. Furthermore, in Italian food there are not only the many excellences in terms of products. Certainly these are much more famous, but there are also many Italian companies that have greatly innovated their production processes. Witness the number of patents filed by companies in the sector, which has nothing to envy to what has been done in other manufacturing sectors. Finally, we found a situation of structural underinvestment. In the period 2011-2021, Italy ranks fourth among the top ten in the world for the number of new startups and agrifoodtech scaleups, but only tenth for the volume of capital contributed to them. A striking gap, to overcome which we intend to contribute.
Efa: Can you give some examples of technological innovation in the food sector that deserve more attention?
Gaiani: In addition to all the technologies, such as the blockchain, that allow better product traceability, there are all those that allow to reduce the environmental impact of the productions, thus improving sustainability. For example, disused industrial warehouses, and also shopping centers that e-commerce has put out of business: abandoned structures that deteriorate over time, but which can be used for hydroponic cultivation, for example. I am part of the jury of "WPP Innovators" an award for the best startups, and in this year's nominations we had four start-ups that developed business models related to hydroponic cultivation, in various forms that included artificial intelligence and different levels of automation. This technology would allow the recovery of these abandoned spaces and would greatly increase the supply of fruit and vegetables immediately close to urban centers, with an immediate impact on the sustainability of crops.
Efa: Another example?
Gaiani: 25% of all fish caught in the world is used to produce animal feed. There are companies that are developing alternative insect-derived foods, which can replace fish as a source of protein in feed. Another example is the production of single-use packaging, responsible for 80% of plastic waste dumped at sea. We are following the development of various start-ups that study alternative packaging solutions, developed starting from food production waste.
Efa: Are there any startups in Italy that are moving towards the practical application of these technologies?
Gaiani: All the examples I just gave you refer to startups that are already operational. In this regard, I would like to emphasize that there are not only startups commonly understood, that is, ideas developed by some young people and gradually financed by several categories of investors. There are also innovations born within small but already established companies, which are then “budded” into vehicles that open up the capital to the intervention of external investors. And given the strong inflow of capital that has been seen in the last year, especially in the last six months, there is reason to hope for a sustained development of agrifoodtech. Other categories of high-potential technologies are those in which it is possible to use sensors, or drones, or artificial intelligence to monitor production and optimize the amount of production inputs. Let's talk about the so-called precision agriculture.
Efa: What is more crucial for the competitiveness of Italian food on world markets, sustainability or traceability?
Gaiani: If traceability is an important opportunity for Italian food to have a competitive advantage, that of sustainability is a challenge that cannot be ignored. It is like a motorway tollbooth, an obligatory passage. Given the growing sensitivity to the problem of climate change, soon a company will no longer be able to stay on the market without being eco-sustainable. This is even more true for agri-food companies, by their nature more exposed than others to climate change, both as victims and as responsible.
EFA News - European Food Agency