Santa Monica, California-based Pontifax AgTech has joined a group of investors in providing a $19.5 million funding round for FoodLogiQ, a provider of food traceability software.
Durham, North Carolina-headquartered FoodLogiQ’s software is designed specifically to help food retailers, restaurant chains, manufacturers, growers and marketers manage food safety compliance and food quality and recall incidents. The company was established in 2006 and counts Whole Foods, Subway and Chipotle among its existing customers.
The funding round announced Thursday sees Pontifax join Nicola Wealth Management, Tyson Ventures, Greenhouse Capital and others in providing growth capital. FoodLogiQ wrote that the capital will be used to accelerate product enhancements, support research and development efforts and expand sales and marketing efforts.
FoodLogiQ marketing officer Katy Jones told Agri Investor that continuing implementation of the Food Safety Modernization Act has helped support demand for the company’s software.
After initial guidance on the regulations was released in fall of 2015, Jones said that compliance deadlines started with large operations and moved on to food manufacturers and growers with fewer and fewer employees. Though restaurants are not directly regulated by FSMA, Jones explained, their suppliers are and FoodLogiQ customers have reported that the software has also helped in managing supplier relationships and determining weak links in their supply chains.
Pontifax managing partner Phil Erlanger told Agri Investor that the firm views food safety and traceability as a compelling macro investment theme propelled by consumer preferences, regulation and an increasingly globalized food supply chain.
“We see documentation of the full, vertically-integrated process of growing and delivering food to end customers as being something that is just starting and a very clear, dynamic sector where we see huge growth opportunities,” Erlanger said.
Last February, Los Angles-headquartered private equity firm Diversis Capital acquired Arrowstream, a Chicago-based provider of software for managing delivery and supply logistics.
Pontifax surpassed its initial target of $100 million before closing its debut fund on $105 million in October. In January, it participated in a $9.5 million funding round for Inocucor, a biological crop input supplier.