The Good Kitchen, launched last year as Europe’s first accelerator program for social startup businesses tackling food insecurity and food poverty issues, has selected its first five enterprises from an initial intake of more than 100 applicants.
The accelerator program offers low-interest loans up to a maximum of €75,000 ($84,000) per business, alongside social investment, business support, access to key markets and mentorship.
London-based The Good Kitchen selected its first five ‘winners’ on the basis that they each offer “highly scalable and sustainable solutions that can reshape our food system and help everyone, everywhere, eat an adequate, healthy and sustainable diet.”
The successful five startups are Bump Mark, a Uk startup developing food freshness checker; Cultivando Futuro, a Colombian agro-commerce platform for smallholder farmers; Entocycle, a UK animal feed developer growing insects with ‘up-cycled’ food waste; Fazla Gida, a Turkish online platform that gives supermarkets a quick, easy and profitable way to offer unsold products online to food banks and humanitarian organisations; and Make Kit, a UK project that provides people with affordable and conveniently distributed recipe kits.
Core funding for Good Kitchen is provided by the UK charity, KellyDeli Foundation. The foundation receives 1% of the profits generated by the KellyDeli business, which is a handmade sushi kiosk business in Europe. Other individuals and businesses, including some from the food sector, who believe in the need to tackle food security and food poverty concerns, have also contributed to the accelerator program.
The accelerator program’s total first-year investment is estimated to be €250,000, made up of individual loans ranging from €30,000 to €60,000, plus the provision of zero-fee support to the successful applicants. A second accelerator program call is scheduled for early next year, although it could take place sooner if sufficient additional funding becomes available.
Loans, advanced on a ‘patient capital’ basis, typically charge 1% APR with repayment to be made over no more than five years. In the positive case of a supported business advancing to its own Series A funding round, it would be expected that the program loan would be repaid immediately.
“We won’t be taking an equity stake in any of the businesses attached to the program,” Joseph Gridley, head of the KellyDeli Foundation, told AgFunderNews. “Because this is a development where social impact comes first, we believe that ideas are the best way to change the world, not organizations. In that context, we also believe it’s important to allow ideas to spread as rapidly as possible, reasoning that if we had an equity stake in these businesses we might, in some way, slow down their rate of growth.”
Good Kitchen opened its first call for applications in February this year, reducing the 100 responses it received to a short-list of 19 real contenders before putting each applicant through a venture capital-style assessment. These survivors were also subjected to detailed examination by a ‘jury’ of 15 specialists, including investment bankers and food sector executives.
“In assessing all the main contenders, we were looking for organizations that had objective proof their solution was capable of delivering social impact related to food security or food poverty,” said Gridley.
“We wanted to find enterprises with a sustainable and strong business model, with traction either in terms of revenue or predicted sales, driven by a great team in which we could place our trust. It was also important that the market opportunity for each selected project, product or service was big enough for it to make a big impact on the food security and food poverty issues on which we are focused.”
Commenting that 30 of the original applications were ‘terrible,’ followed by 30 that could be termed ‘good,’ Gridley said selecting a winning five from about 40 ‘very good’ projects and ideas, was a tough task. Even at the end of the process, at least five potentially supportable enterprises had to be turned away.
“We decided to start small in our first year with the aim of discovering how best to help social businesses achieve their potential,” he said. “Maybe in the future we’ll be able to work with an increased number each year.”
Gridley is very positive about the chosen five. Here are some of his comments on each:
Bump Mark (UK): “The information we use to decide when to throw food away is inaccurate. Conservative expiry dates cost retailers tremendous amounts as they throw away up to 16% of their stock on short-life products. Bump Mark is a food freshness checker that reacts to the environment around it, just like fresh food does and updates itself. The label is checked by touch; when it’s smooth – your food is fresh. If you feel bumps – then it’s time to bin. The label only goes ‘bad’ when your food does too.”
Cultivando Futuro (Colombia): “The team behind Cultivando Futuro traveled thousands of miles across Colombia listening to the stories of farmers, and learning about where the industry isn’t working in their favor. This led them to create the first agro-commerce platform, which improves the efficiency of the food supply chain by connecting all the key actors, opens up new channels for direct trading to farmers so that they can gain access to better market opportunities, and guides the industry through big data analysis and open data visualization.”
Entocycle (UK): “The current farming system is heavily reliant on protein from dwindling fish stocks and land intensive soya to produce the animals we humans eat. Entocycle is harnessing 150 million years of nature’s research and development to produce a solution to feeding the world. They believe that insect protein is the future of farming and are using the Black Soldier Fly to ‘up-cycle’ organic food waste into a sustainable protein feed alternative for aquaculture and livestock, and simultaneously surpassing current waste processing alternatives.”
Fazla Gida (Turkey): “Food waste is a cost not only for producers but also for warehouses, logistics operators and food waste solution providers. To prevent catastrophic levels of food waste, the Turkish government offers a 100% tax deduction incentive to companies donating surplus foods. Through its donation platform, Fazla Gida takes into account the economic, ethical and environmental issues around food waste, and provides professionals in the food industry with the opportunity to offer their unsold but safe-to-eat products online to food banks. Its process also helps food companies to claim their 100% tax deductions, with 50% of the value gained being passed back to Fazla Gida.”
Make Kit (UK): “In the UK, approximately a third of children are obese or overweight by the time they leave primary school. The problem worsens for people from lower socio-economic backgrounds. Make Kit creates recipe kits, which are partly subsidized, making them affordable for people on a tight budget. They are also building on recipes created for and by the local community and sold at accessible locations such as community centers, doctor surgeries, nurseries, community cooking events, and in areas with high levels of obesity and health inequality.”