Submission from Israel Food Tech Ecosystem: Amir Zaidman, Kitchen
Last month, I visited Kitchen Hub at their office in Ashdod, Israel and sat down with Amir Zaidman, Founder and CEO of Kitchen Hub. Prior to founding Kitchen, he spent 10-14 years in medical technology business development working on both the startup and investment sides.
We discussed what the Kitchen does, what makes Israeli innovators different, what the ecosystem needs, whether precision fermentation is the new software, and what it will be like for Israeli customers to try the first farmed meat product.
J: Let’s talk about what the Kitchen is and what it does.
A: First and foremost, we have money that we invest in startups as seed or pre-seed stage venture capital. We have more money than we could invest in the seed stage because we also receive money from the government to invest in those startups. While a typical seed stage fund won’t invest $200-0.5M, it can invest close to $1M in a company. Those companies become portfolio companies and have access to that facility but also the great support that the Kitchen team provides to the corporate teams. At least in the first 2-3 years after investing in them, the relationship is very strong.
J: Would you say that the kitchen is like a working studio?
A: Not really. For us, the venture studio is where we start with a blank page. Then we discuss and figure out what we want to do based on the needs from the industry, global trends, and where the industry is going. We start looking for enabling technology, science, intellectual property that may be suitable for the project. If we find that, we enter into discussions with universities or research institutes and enter into a license agreement to be the licensee of that technology. Then we gather the team and give them equity in a new company we created that licensed the technology. Our studio model starts from the ground up and includes all those building blocks.
The third thing the Kitchen does is work in the foodtech community in Israel.
J: Let’s get into your role here, I understand there are two important parts so can you explain what those are?
A: I participate in this studio model by thinking about our new directions and what we need to do. The most important part is to make deals with universities and entrepreneurs on the terms under which they will enter the kitchen. It depends on whether it is a working studio or a general investment. But if it’s a traditional investment, it’s more in line with the traditional VC investment model. And if it’s on the other side, then it gets very complicated with the license agreement and everything related to that.
The second, part of my job that keeps me very busy, is working with CEOs of start-up companies in their business development activities, regarding possible deals they may have such as joint development or collaboration agreements, and most importantly, in their next fundraising round.
J: You have a view of the entire food tech ecosystem here because you work with many startups, but you also have a clearer view of individual startups and what they need. What secret weapon do startups here have that makes them competitive in the global market?
A: I think there are several factors to that. Another is that Israelis are very entrepreneurial, which means that one can define oneself as an entrepreneur, no matter how superficially one looks at it. One day, you are an entrepreneur in medical technology and the next in food technology. If there is a new impact field, it will attract veteran entrepreneurs from other verticals to come and build their next startup in the space.
The second is that there is much that is new in Israel.
But I think the most important thing is that because Israel is a small market, all Israeli startups are born globally. They never consider the Israeli market first. They think of Europe, the US, and Asia first. They have to think about the whole world which helps them to get a big idea or a better idea of the big picture.
J: Where do you find the best research and the best innovators here?
A: Everywhere. The food technology sector is very diverse. If you look at cybersecurity, it comes from certain intelligence units in the military. That’s not how it works in Israeli food technology. We find IP and science in some research institutes, but entrepreneurs themselves, we find them everywhere. We get them from former entrepreneurs of biotech companies, medical technology, or food companies.
J: They come from all over the place but what characteristics do they share? If you’re thinking of building a community of food tech startups here, what are you looking for?
A: You don’t stumble into foodtech. It’s not something you do because it was there, you have to seek it out. And often you want it because you feel that this is something that can change the world for the better. All the CEOs and founders of those companies have such passion and this is what makes them unique.
J: With the reach of the kitchen and the view of the food technology community as a whole, what do you think the innovators here really need? What kinds of resources do you hope will become more accessible in the coming years?
ANSWER: You are touching a very hot point, because we have been talking about those issues for the past three years. If you’re a food startup in the US, you’ll come up with an idea, you’ll go to a research center, and they’ll help you develop it. In Israel, you cannot produce. There is a lot of infrastructure missing. And we are working on that. Not the Kitchen specifically, but the Israeli community with some support from the government. Every precision fermentation startup should buy some equipment and have a move to set up a precision fermentation center, which will be like cloud computing but precision fermentation. You can do very small scale in your lab and if you go up one notch to bigger fermenters, you will be able to rent and not buy.
J: This is interesting because food technology is a very lucrative industry compared to software.
A: Software used to cost a lot of money, because you had to have your own servers, until AWS and Amazon invented web services. And suddenly, it didn’t have to be such a huge investment because you could have everything in the cloud. 10-15 years ago, it was not like that. This is now changing in food technology as well.
J: Ultimately, the goal of food technology is to change the way people eat which requires a major behavioral change, even if the technology exists. How would you say consumers here in Israel have reacted to things like farmed meat?
ANSWER: I cannot say because there is no cultured meat product introduced in Israel yet. We hope that the first ones will be launched by the end of this year. I can tell you that Israel is very quick to adopt new trends and technologies and is very plant based. I expect that new technology to be very well received. Although the market is small, it will be an excellent test market for every new product. We have many chefs who are very interested in what is happening in food technology because they want to incorporate new technology into their menus. It was not like that, three to four years ago but now the world of cooking and the areas of food technology are coming closer together.
J: Farmed seafood was one of the ideas the kitchen had that led to Wandafish and Forsea. Clean packaging and reduced sugar have also been topics within the kitchen portfolio. My final question is, as you think about new trends and ideas to pursue, what technologies do you hope to see?
A: One of the key things we hope to find is technology that will enable complex technologies like precision fermentation and cell culture to produce affordable products. Because today that technology is expensive and produces expensive products. Farmed beef is likely to be more expensive than conventional store-bought meat because the meat industry is good at creating affordable products on a large scale. It is very difficult to compete. The companies that make cultured meat are very close to the market but have a high price. So we are looking for technology that will enable them to reduce costs, lower prices, be more efficient, and bring the gospel to the people.
Edited for clarity and length
