ScaleUpFood wants to help start-ups grow: ‘Only those that scale will move the needle’

By Katy Askew

- Last updated on GMT

A new initiative has been launched in the Netherlands to help disruptive food start-ups scale to ‘move the needle’ in terms of value creation and impact.

ScaleUpFood has been created by three partners: ScaleUpNation – which has already helped over 100 Dutch impact scale-ups to date – financial services group Rabobank and FoodValley, the ‘primary knowledge-intensive agrifood ecosystem’ in the Netherlands.

ScaleUpNation founder Menno van Dijk explained that the project was launched in recognition of the importance for start-up innovators to grow their businesses in order to maximise their impact on a broad range of sustainability issues, from global warming to food waste.

“Climate change, global population size and waste – are all opportunities for innovative, technology-driven enterprises throughout the value chain,”​ van Dijk said.

“Though many startups are launching and exist for some years, only those that scale will move the needle in terms of impact and economic value creation.”

Only 1% of start-ups scale

Helping businesses build scale for global impact

According to research from ScaleUpNation, less than 1% of early stage companies reach annual revenues of €9m within five years.

The growth experts suggested that reaching significant scale can be ‘even more challenging’ for small companies operating in the agri-food sector. In particular, innovation speed and implementation can be inhibited by growing seasons, long sales cycles, conservative consumers and a complex regulatory framework, they suggest.

The project is focused on the Netherlands and while the country is known as a centre of food innovation, ScaleUpFood said ‘this is far from guaranteed’.

Indeed, research suggests investment in innovative early-stage companies ‘lags behind other countries’ – meaning ‘too few’ of the country’s agri-food entrepreneurs are able to scale their businesses.

Roger van Hoesel, managing director at Foodvalley, believes that this has contributed to the commoditisation of the Netherlands’ agri-food products. “In food and agri, the Netherlands has always been a scale-up country,​ [which is] testimony [to] our position of second largest food exporter in the world. But many products have commoditised.

“This partnership will create a new wave of food and agri scale-ups focused on technology and sustainability.”

Where’s the money? Access to capital is crucial

While the Netherlands is an ‘innovation leader’ in agri-food, Rabobank’s Rogier Raaijmakers, head of direct investments, suggested that access to capital is one of the biggest barriers to development.

Through its networks, corporate clients and expertise in capital, the bank believes it can help change the narrative.

“The Netherlands is a frontrunner in innovation, but clearly lagging in access to sufficient scale-up capital. With our networks, expertise and capital, we are fully committed to strengthen the global F&A innovation ecosystem, as well as the Dutch ecosystem around innovation and fast-growing companies. The ScaleUpFood initiative clearly fits this ambition,”​ Raaijmakers said.

Jeroen Leffelaar, managing director of Rabobank food and agri innovation, added that the need for fast-paced innovation in the food sector is a cultural shift recognised by ‘many’ of the bank’s corporate clients.

“Current food production systems are simply unsustainable, even with today’s population. The need for true innovation in the food and agri value chain is bigger than ever before. Many leading food and ag corporates are realising that fine tuning of their existing research and development may no longer be sufficient to keep up.

“If we wish to turn today’s new ideas and technologies into tomorrow’s game-changing solutions, we need to support the most promising early stage companies in scaling to disrupt a traditional and inefficient industry”.

From fact-based research to actionable outcomes

The ScaleUpFood platform will address venture scaling challenges first by carrying out ongoing fact-based research. The aim is to uncover ‘success factors’ of global food and agri scale-up companies.

Starting in October, the invite-only support program will work with food entrepreneurs to addresses areas specific to food and agri scale-ups. Topics will likely include: strategic selling to large corporates, specialised finance and data driven business model extensions.

The program will engage top Dutch corporates and innovative mid-caps for collaboration with the scale-ups.

After completion, qualified ventures will be invited for longer term tailored support, collaboration opportunities and access to series-B level funding.

Anieke Wierenga, director of ScaleUpFood, concluded: “Entrepreneurs who have made it to the scale-up stage in food and agri are the best of the best. But what got them here will not get them to the next level. We’re looking forward to unlocking significant growth opportunities with our first class this fall.”

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