Nordic Foodtech VC has raised €40 million (US$45.6 million) for the first close of its second fund, targeting €80 million (US$91.2 million) to invest in early-stage start-ups creating “healthy, sustainable, and resilient food systems.” The fund aims to bridge scientific discovery and industrial applications with support from institutional investors and food industry stakeholders.

Institutional investors like Tesi and Elo Mutual Pension Insurance Company and food industry stakeholders such as Valio Pension Fund and Heino Group have backed the second fund.

Nordic Foodtech’s first fund invested in 18 companies from the Nordics and Baltics, including Finnish companies Enifer and Kuva Space, Danish firms Chromologics and Evodia, Estonia-based ÄIO, and Swedish companies Melt&Marble and Ironic Biotech.

“Nordics and Baltics have very strong research and legacy industry in fields adjacent and applicable to food,” Lauri Reuter, partner at Nordic Foodtech VC, tells Food Ingredients First.

“It might not be so obvious at first sight, but the strong pulp and paper industry in Finland has created fertile ground for start-ups like Enifer and onego Bio, and the exceptional biomanufacturing industry and biotech research in Denmark (Novo Nordisk, etc.) have built the foundation for companies like Chromologics and Evodia.”

He believes the region has high research potential and competence that can be put to use in the food system. “The collaborative and pragmatic mentality gives Nordic companies a distinct flavor,” he adds.

Addressing industry challenges

According to Nordic Foodtech, its portfolio of companies tackles significant industry challenges.

Reuter cites some examples: “Enifer has harnessed the original Pekilo mycoprotein process to turn food (such as lactose) and agri side streams (dilute side streams from bioethanol production) into a sustainable, high-quality protein ingredient that is also cost-competitive.”

“Evodia produces natural aroma compounds through precision fermentation to replac farming vast amounts of crops, such as hops, only to extract small amounts of aroma molecules,” he continues.

Evodia’s Yops product can replac traditional aromatic hops in brewing, providing a consistent hoppy flavor to non-alcoholic and alcoholic beers, its CEO previously told Food Ingredients First. 

Another company, NPHarvest, has developed a “plug-in technology” to capture nitrogen and phosphorus from the wastewater of large farms or municipal wastewater treatment plants. The process cuts the cost of water treatment, reduces eutrophication, and circulates the nutrients back to food production as fertilizers,” Reuter elaborates.

Nordic Foodtech has also invested in Endless Food, which has developed a sustainable chocolate alternative called “This Isn’t Chocolate” for use in baked goods. The product is formulated mostly using brewer’s spent grain and has a “significantly smaller footprint than cocoa.”

Bridging research and commercialization

Reuter points out that even though the most meaningful new solutions are “born out of scientific discovery,” there is a gap between research and commercial solutions.  

“We work with research institutions to support founder teams through the spin-out process and the critical first steps in building a successful company with all our sector-specific experience and expertise.”

The fund will continue to collaborate closely with universities and research institutions, especially in the Nordics and Baltics, to scout for ideas, teams, and technologies with potential for global scaling. 

“We have started investing from the new fund already. once the fund reaches the target size, we will be busy investing in roughly 30 fresh companies across Europe, with particular love for Nordic and Baltic research spin-outs,” he concludes.