Apeel Sciences, a food system innovation company, is out to prevent food produced globally from ending up in the landfill, especially as pressures from the global pandemic affect the food supply chain.
The company just added $250 million in Series E funding, giving it a valuation of $2 billion, to speed up the availability of its longer-lasting produce in the U.S. (where approximately 40% of food is wasted), the U.K. and Europe.
Existing investor Temasek led the round and was joined by a group of new and existing investors, including Mirae Asset Global Investments, GIC, Viking Global Investors, Disruptive, Andreessen Horowitz, Tenere Capital, Sweetwater Private Equity, Tao Capital Partners, K3 Ventures, David Barber of Almanac Insights, Michael Ovitz of Creative Artists Agency, Anne Wojcicki of 23andMe, Susan Wojcicki of YouTube and Katy Perry.
With the new funding, Apeel has now raised over $635 million since the company was founded in 2012. Prior to this round, the company brought in $250 million in Series D funding in May 2020.
Santa Barbara-based Apeel developed a plant-based layer for the surface of fruits and vegetables that is tasteless and odorless and that keeps moisture in while letting oxygen out. It is those two factors in particular that lead to grocery produce lasting twice as long, James Rogers, CEO of Apeel, told TechCrunch.
Apeel installs its application at the supplier facilities where the produce is packed into boxes. In addition to that technology, the company acquired ImpactVision earlier this year to add another layer of quality by integrating imaging systems on individual pieces as they move through the supply chain to optimize routing so more produce that is grown is eaten.
“One in nine people are going hungry, and if three in nine pieces of produce are being thrown away, we can be better stewards of the food we are throwing away,” Rogers said. “This is a solvable problem, we just have to get the pieces to the right place at the right time.”
The company is not alone in tackling food waste. For example, Shelf Engine, Imperfect Foods, Mori and Phood Solutions are all working to improve the food supply chain and have attracted venture dollars to go after that mission.
Prior to the pandemic, the amount of food people were eating was growing each year, but that trend is reversed, Rogers explained. Consumers are more aware of the food they eat, they are shopping less frequently, buying more per visit and more online. At the same time, grocery stores are trying to sort through all of that.
“We can’t create these supply networks alone, we do it in concert with supply and retail partners,” he said. “Grocery stores are looking at the way shoppers want to buy things, while we look at how to partner to empower the supply chain. What started with longer-lasting fruits and vegetables, is becoming how we provide information to empower them to do it without adding to food waste.”
Since 2019, Apeel has prevented 42 million pieces of fruit from going to waste at retail locations; that includes up to 50% reduction in avocado food waste with corresponding sales growth. Those 42 million pieces of saved fruit also helped conserve nearly 4.7 billion liters of water, Rogers said.
Meanwhile, over the past year, Apeel has amassed a presence in eight countries, operating 30 supply networks and distributing produce to 40 retail partners, which then goes out to tens of thousands of stores around the world.
The new funding will accelerate the rollout of those systems, as well as co-create another 10 supply networks with retail and supply partnerships by the end of the year. Rogers also expects to use the funding to advance Apeel’s data and insights offerings and future acquisitions.
Thomas Park, president and head of alternative investments at Mirae Asset Global Investments, said his firm has been investing in environmental, social and governance-related companies for awhile, targeting companies that “make a huge impact globally and in a way that is easy for us to understand.”
The firm, which is part of Mirae Asset Financial Group, often partners with other investors on venture rounds, and in Apeel’s case with Temasek. It also invested with Temasek in Impossible Foods, leading its Series F round last year.
“When we saw them double-down on their investment, it gave us confidence to invest in Apeel and an opportunity to do so,” Park said. “Food waste is a global problem, and after listening to James, we definitely feel like Apeel is the next wave of how to attack these huge problems in an impactful way.”