The Qatar Investment Authority’s leading role in the $200 million funding round for plant-based egg and cultured meat provider Eat Just reflects sovereign wealth funds’ deepening engagement with agtech.
QIA-backed Hassad Food’s previous land acquisitions were the starting point cited by Global SWF managing director Diego Lopez in February, when describing the evolution toward the more diversified exposure now sought by many funds.
Javier Capape Aguilar, director of IE University’s Sovereign Wealth Research Institute, told Agri Investor that “many things are happening, especially with foodtech.”
Aguilar said SWFs’ approaches to burgeoning industries, such as artificial intelligence and biotech, provide an indication of how involvement with foodtech could develop in the years ahead. State-linked investors often encourage and support regional headquarters, research centers or joint ventures with existing national companies, he explained. Aguilar cited how SWF investments into companies including Uber and WeWork have included provisions to ensure widespread use within the funds’ home countries.
“We have seen this kind of learning process,” said Aguilar. “It wouldn’t be surprising if we also track this in [the foodtech market], because it’s very clear for them there is a food security need. If they are able to not only learn, but also apply that technology using domestic resources, they will try to do that.”
That process is already well underway in vertical farming in the Middle East.
Meraas Holdings, which is backed by the emir of Dubai, was among investors in a 2017 round for Newark, New Jersey-headquartered AeroFarms. The latter was also among four companies to receive R&D-focused funding last year from the Abu Dhabi Investment Office to support construction of an 8,200-square meter facility in Abu Dhabi.
AeroFarms’ founder David Rosenberg told Agri Investor that longstanding food security concerns in the Middle East appear to be a clearer focus since the onset of the pandemic, and that diplomatic developments have contributed a note of optimism.
“The political landscape is changing,” he said. “I have a lot of admiration for the UAE’s leadership in the Abraham Accords and peace with Israel. You see the dynamic of moderate Islam spreading across the region.
“I want to be part of positive change. I want to vote with my wallet, vote with my feet and go to places to really support areas that are moving in the right direction. I’m proud to be part of that change and to help support the region.”
Population growth and resource scarcity collide perhaps most meaningfully in the Middle East, where food – even when grown under LED lights or in a lab – is no less political than anywhere else.
Qatar’s response to a blockade imposed by its neighbors between mid-2017 and January stands as a key example of how hundreds of millions of investment can translate into rapid progress toward self-sufficiency in food.
Foodtech start-ups and the firms backing them can earnestly frame their missions as global and apolitical. However, the states investing to scale their innovations in areas such as plant-based protein, vertical farming and cultured meat clearly have a need and a desire to be among the first to reap their benefits.
Whether and how those states will look to use those future benefits is, at this point, anybody’s guess.
Opsraie’s Dwight Anderson has said how the potential for closed doors and conflicts of interest are important considerations when weighing whether to accept the considerable resources being offered by strategic investors.
In partnering with state-linked capital on opposite sides of a still-simmering political dispute between Qatar and other Gulf Arab states, AeroFarms and Eat Just have integrated their technologies directly into one of the regions where it can have the greatest impact.
As the pair and others continue to build and sustain necessary cross-border connections, a clear-eyed understanding that politics and the state-linked nature of their capital could shape the development and commercialization pathways open to their products will surely be an asset.