In its second agtech investment in two weeks, Maersk Growth, a venture vehicle run by the global shipping firm, has invested $2.4 million in a seed-stage financing round for food-focused blockchain provider Ripe Technology.
Established last year, Ripe Technology’s platform allows growers, labs, distributors and retailers to contribute information to a shared distributed database that facilitates traceability throughout the supply chain. The company says the data its offerings produce help its users identify food producers capable of meeting very specific requirements in terms of origin, quality, flavor and other factors.
The system requires farmers to enter information into the distributed database through the use of handheld devices. It is currently being tested in pilot projects involving tomato growers in New Hampshire and Sweetgreen, a salad-focused restaurant chain.
“Having access to Maersk’s global reach, rich history and enthusiasm in our work has truly been humbling,” Ripe founder and chief executive Raja Ramachandaran said.
Last week, Maersk Growth completed its first agtech investment – participating in a Finistere Ventures-led $6.5 million Series A financing round for TeleSense, which offers a combination of hardware and software designed to monitor the temperature and humidity of stored commodities.
Not ‘just a bag of money’
Maersk Growth venture partner Peter Jorgensen told Agri Investor the unit was introduced to Ripe through an accelerator run by Rabobank and Techstars. He said it was joined in the seed investment round by Relish Works, a start-up incubator connected with 115-year-old family-owned foodservice provider Gordon Food Service.
“We are also new in this [venture capital investing] and like to have co-investors because you get that validation,” Jorgensen explained. “To get a validation from an industry player is worth more to us than somebody coming in with just a bag of money.”
Ripe’s food-specific approach to blockchain fits well with Maersk Growth, which focuses on businesses that can help introduce more data into supply-chain operations, as part of the parent shipping company’s efforts to evolve into an end-to-end logistics provider, Jorgensen said.
He explained that Maersk has already established a joint venture with Microsoft called TradeLens, which is designed to apply blockchain technology to shipping documents. In the future, Jorgensen said, Maersk may look to combine the two companies, adding that the whole market remains too new to say much about the venture’s future beyond this.
Over time, said Jorgensen, the wide variety of investor activity currently focused on blockchain is likely to result in some degree of consolidation around a platform that could end up focusing on something different. In the meantime, he said, blockchain remains the best avenue to begin developing necessary platforms specific to distinct industries – in this case, food.
Such a system can be particularly useful in the sector by helping prove to consumers that a product is genuinely organic, in the instance of a food recall or in providing consumers with the sense of authenticity that is increasingly important in how food is marketed, said Jorgensen.
“We don’t think consumers are going to pay more for this, necessarily, but if you can’t provide it, you will be deselected” he added.
For Ripe, partnering Maersk allows the company to access a potential customer base of the global shipping giant’s wide-ranging group of clients, Jorgensen said, adding that he had already helped the company enlist the largest dairy and meat exporters in Denmark as users.
“We would like to invest in companies that have some customer validation, through hopefully a few paying customers, then some pilots. We can help them scale and onboard a few more customers quicker,” said Jorgensen.