FoodLogiQ Raises $19.5 Million in Funding from Tyson Ventures, Pontifax AgTech and other VCs
FoodLogiQ LLC, which develops supply-chain software to track food safety, raised $19.5 million in a new funding round that included investments by Tyson Foods Inc. subsidiary Tyson Ventures and sensor-manufacturer Testo Inc.
The Durham, N.C.-based company’s platform allows a food company’s suppliers to provide details about the processes or pesticides used in farming, when and how products were shipped, audit filings and other factors a company wants to keep on file.
The new backing, which was led by Renewal Funds and includes backing from Greenhouse Capital and Pontifax AgTech, comes as venture-capital investors are seeding a new crop of technology companies that aim to bring transparency to food industries as consumers and regulators are applying closer scrutiny to food supply chains.
The software developers are aiding the industry with a problem known as food traceability—the ability to track a product from farm to wholesaler, manufacturer, packager, distributor and finally to a retailer or restaurant. Having electronic records of every point in the supply chain where food is handled allows suppliers to trace incidents such as contamination or to verify the quality or authenticity of food sources.
That’s become an imperative for food companies as consumers are demanding more transparency about the origins of their food and also in light of new Food and Drug Administration rules, finalized in 2016, requiring U.S. food manufacturers to set detailed plans to prevent foodborne illness.
But many food companies still track their suppliers in spreadsheets and other outdated systems. Technology firms are seeking to change that.
“Technology very much facilitates managing the volume of records that have to be kept today because of FSMA,” the FDA’s Food Safety Modernization Act, said David Acheson, president of food-safety consultancy The Acheson Group. “For companies that are doing this electronically it’s much more efficient, safer and less economically burdensome.”
FoodLogiQ Chief Executive Dean Wiltse said the new financing will go toward software improvements, research and marketing to reach new customers around the world.
The software firm’s restaurant customers include Buffalo Wild Wings, Chipotle Mexican Grill Inc., CKE Restaurants and Panda Restaurant Group. It also works with food manufacturers Hain-Celestial and Seal the Seasons, Amazon.com Inc. grocery chain Whole Foods and hundreds of growers, co-packers and produce marketers. Last month, Testo announced it was working with FoodLogiQ to integrate Testo’s temperature-monitoring sensors with FoodLogiQ’s tracking software, adding more detail to information on the food supply chain.
“The industry, to generalize, is archaic and behind,” Mr. Wiltse said. “Over the next several years I think you will see big changes in the food industry, it will become digitized and we will know more and more about the food we eat.”
According to a 2015 report by research firm MarketsandMarkets, the food-traceability technology market is expected to grow 9% annually, reaching $14 billion globally by 2019.
Last October, San Francisco based traceability startup SafeTraces raised $6.5 million in a Series A round of funding. Connecticut-based Ancera raised $8.9 million in 2016.