Announcing the Close of Fund lll!
Our $45M Fund III to Continue Investing in The Future of Food
We’re incredibly excited to announce the closing of our oversubscribed $45M Fund III at Bluestein Ventures. As we embark on our tenth year in venture, our new fund marks a new chapter for Bluestein Ventures, as this is the first time we have taken outside capital after having operated out of a family office since our founding back in 2014. With this fund, we’re particularly thrilled to have fostered a strong community of LPs and honored they have entrusted us to invest their capital to reshape the food system.
Our Why
At Bluestein, our mission is to transform the food system to be better, healthier, and more sustainable. We’re deeply passionate about and committed to the food industry because of the integral part it plays in our lives. Food fuels our bodies, minds, and souls – it drives us day-to-day, it brings people together, it helps us form emotional bonds, and it’s tightly weaved into the fabric of culture. Most important, food is literal fuel for our body and is a powerful drug, both positive and negative. Food can nourish us, providing us with nutrition to power us with energy and heal our bodies.
On the flip side, the impact of our current food supply can be harmful, and our food systems are falling short of their potential. For one, we consume too much food that’s lacking in nutrient density, where over 75% of consumption coming from only 12 crops and 5 animal species1 and roughly 90% of the U.S. population is metabolically unhealthy.2 Supply chains are strained, further compounded by global disruptions – and food insecurity is alarmingly high at 12.8% of the U.S. population in 2022,3 despite record volumes of food waste (40% is lost or wasted in the U.S.).4 The environmental impact of our food system is also huge; for example, each year, a whopping $1.2T worth of food is left unconsumed globally,5 and food waste consumes 21% of freshwater,6 accounts for 8% of global emissions,7 and is over 4x emissions from the aviation industry.8
Our Opportunity
With challenge comes opportunity. The issues facing the food system present a compelling market opportunity. Food is a massive industry – a $4 trillion dollar market across the supply chain. Small shifts can have huge ripple effects (think a 1% shift toward e-commerce in the $850 billion dollar grocery industry9 means a $8.5 billion revenue opportunity).
We’re at the cusp of several major inflection points across both consumer behavior and technology that’s driving innovation. On the consumer side, there’s an acceleration in digital adoption, real-time health tracking, increased demand for sustainability and transparency, and the rise of the creator economy. Within technology, there’s an acceleration across AI and machine learning, synthetic biology and fermentation innovation, as well as hyper-connectivity. All of this means that we’re poised for major transformation in our food system – exactly why we’re focused on this space.
That said, the food industry is highly complex, where numerous distinct stakeholders, including suppliers, manufacturers, distributors, retailers, and customers, are required to get our food from farm to shelf. Thus, it requires a deep understanding of the entire supply chain and key players in order to succeed in bringing to market transformative innovation.
The coupling of passion and opportunity is why we exist. With this in mind, our thesis is investing across the supply chain in food – from goods on the shelf, how goods get to the shelf, to how goods are made – at the earliest stages (pre-Seed to Series A). Over the last ten years, we’ve built a portfolio of more than 50 companies with the potential to transform the food industry from harvest to shelf. We’re particularly proud of our impact to-date, with 67% of our portfolio in nutrition, 40% in sustainability, and 62% having a diverse founder. For example, these include Factor, the #1 prepared meal delivery brand in the country that makes healthy eating fast, easy and delicious; Mori, the shelf-life extension technology that keeps food fresh longer through the supply chain; Meati, the nutrient-dense clean ingredient alternative protein company; and BiomeSense, the microbiome company that will revolutionize our ability to understand our gut for better health.
Our New Fund
For Fund III, we’re taking this forward, continuing to build out a portfolio with an emphasis on three themes: nutrition, sustainability, and digitization. These will be the driving forces in the food industry over the next 5-10 years.
We’re here to empower our founders to realize their vision, and we’re continuously in awe of the fortitude that they bring – launching a company is not for the faint of heart. Our mantra is being hands-on with our portfolio, helping them navigate the critical journey to product-market fit. With our focused approach, we’re able to leverage our expertise to help accelerate our portfolio companies, using a combination of go-to-market strategy support, network connections, and capital.
Fund III is an inflection point for us at Bluestein Ventures, one that we could not be more excited about. Our team is ready. The two of us have been on this journey together for over seven years. To elevate our game, over the past few years we’ve brought on Amira Khatib as a Vice President and Aaditi Tamhankar as an Analyst. We’re also thrilled to have recently welcomed Lindsay Levin, former CMO at RxBar, as a Venture Partner.
We have always been committed to building a community around what we are doing; the food industry is complicated, and it requires deep knowledge and collaboration to succeed. Raising capital has enabled us to create a community of investors that extends our reach – it helps us as fund managers, it helps our founders, and it helps the broader ecosystem. We’re even more humbled to have a strong set of industry insiders as LPs in our new fund with deep expertise in the food space, including strategics, family offices, as well as key executives and entrepreneurs.
We’re particularly proud of the rockstar team we’ve developed, the portfolio companies we’ve invested in to-date, and the impact we’re having in this fund already across nutrition, sustainability, and diversity. We’re extraordinarily grateful to everyone who has helped us get here today, including our founders, the Bluestein Family, co-investors and collaborators, industry partners – and now our new fund investors. We’re stronger together. Let’s make the food system better, healthier, and more sustainable for generations to come.
For our official fund announcement, please see here. You can also read more about it in TechCrunch, Forbes, Crain’s, Food Navigator, and Chicago Inno.
-Ashley & Andrew
[1] Food and Agriculture Organization. What is Happening to Agrobiodiversity?
[2] National Library of Medicine. Trends and Disparities in Cardiometabolic Health Among U.S. Adults, 1999-2018. July 22, 2022.
[3] USDA Economic Research Service. Food Security and Nutrition Assistance.
[4] Food and Agriculture Organization of the United Nations. Technical Platform on the Measurement and Reduction of Food Loss and Waste.
[5] BCG. Tackling the 1.6-Billion-Ton Food Loss and Waste Crisis.
[6] Forbes. What Environmental Problems Does Wasting Food Cause?. July 18, 2018.
[7] McKinsey & Company. Reducing food loss: What grocery retailers and manufacturers can do. September 7, 2022.
[8] McKinsey & Company. Reducing food loss: What grocery retailers and manufacturers can do. September 7, 2022.
[9] IBIS World. Supermarkets & Grocery Stores in the US - Market Size (2004–2029).