Temasek, Heritas Capital invest in China agrifood tech fund by Bits x Bites

CHINESE venture capital Bits x Bites has achieved the US$30 million first close of its new US$70 million fund to grow agrifood technology in China.

Limited partners (LPs) of the fund included Singapore state investment firm Temasek Holdings and Singapore-based private equity firm Heritas Capital Management, which focuses on health and related food tech, a spokesperson for Bits x Bites told The Business Times (BT).

Another LP was Henry Soesanto, the chief executive officer of Monde Nissin, a Philippines-based food company that also owns UK meat-substitute product Quorn.

Other investors participating in the first close included food conglomerates and family offices in China and South-east Asia.

"These LPs' industrial footprint spreads across food and biosciences," the spokesperson told BT on Tuesday.

Bits x Bites expects a final closing of the US$70 million fund in the coming months.

The venture capital firm backs transformative technology to build a more resilient and sustainable food supply chain, with a focus on the Chinese market. It is managed by general partners Matilda Ho and Joseph Zhou.

By investing in early-stage Chinese and international founders - up to their Series B rounds - Bits x Bites hopes to advance bioscience, data science and processing technology to tackle challenges along the food supply chain. This ranges from precision agriculture, crop and animal health, to protein alternatives and nutrition.

The new fund has also invested in its first portfolio company, Mojia Bio, a Chinese bioindustrial firm that produces essential nutrients, the spokesperson said on Tuesday.

Mojia Bio's proprietary bio-manufacturing process increases the yield while limiting by-product and environmental pollution from conventional chemical synthesis.

In addition, the new fund has deployed capital in follow-on investments in Bits x Bites' previous portfolio companies. They include UK biotech startup Tropic Biosciences, which develops high-performance varieties of tropical crops, as well as Israeli chickpea protein concentrate company InnovoPro.

Tropic Biosciences in June raised US$28.5 million in a Series B round led by Temasek with participation from Bits x Bites and other investors.

With the African swine fever affecting pork production, the Covid-19 pandemic disrupting global supply chains and uncertain trade relations, "nothing else is more urgent in China today than growing self-sufficiency and sustainability in food production", said Ms Ho, founder and managing director of Bits x Bites.

She noted that process innovations may include a discovery platform for novel agricultural inputs, bio-manufacturing of high-demand functional ingredients or machine learning for farm automation.

Such innovations are important to raise the food system's productivity and improve food products' nutrition and safety, Ms Ho added.

In China, downstream platforms such as online grocery and food delivery systems have been driving food and retail investment.

But more investments are required for upstream and midstream innovation in terms of farm production, biotech and ingredients, Ms Ho told BT.

The investment by Temasek and Heritas in the Chinese agritech fund also comes as Singapore is pushing ahead with its "30 by 30" food production target. To buffer from supply disruptions, the city-state aims to produce 30 per cent of its nutritional needs by 2030.

READ MORE: Leaving a food-print: The shakedown of the agrifood sector by disruptors has turned into a sweet spot for “impact investors” including Temasek