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Why this private equity investor is putting his bet on food technology

Francis Tan, founder of Hafnium, might be responsible for the next big food-centric tech.

Francis Tan never set out to invest in food- and agri-tech. When the former Shell and BP senior executive started private equity firm Hafnium Hafaway with his co- founders in 2017, he focused on companies in the chemical sector.

Then, Hafnium went into a joint venture with A*Star to launch biotech start-up Fermatics. It dealt with flavour and food production companies, and needed help to commercialise the technology, which was Tan’s expertise.

“That’s when I realised that our skills in the chemical sector were relevant to food production due to the similarities,” Tan shares. The tremendous challenges in this sector also invigorated him.

“If you look at what is happening, the food and agriculture industries are under stress. The global population is forecasted to grow from 7.7 billion to about 10 billion by 2050. This means that we have to produce more food.

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“At the same time, there are also 690 million malnourished folks right now that we have to think about, so nutritional content is key,” says Tan. “And, according to a BBC report, we have to accomplish this while also cutting about 13 gigatons of carbon emissions related to food production.”

Many would shy away from these impossible odds, but Tan believes he can make a difference. His company has invested in six food-related companies – three in Asia and the remaining in Europe. Thanks to Hafnium’s initial investment in Fermatics, he has started exploring healthy food formulations for the Asian market – think more nutritionally dense noodles, rice and curry puffs – that are still just as tasty, and has a company to study this.

Another of Tan’s funded companies is also exploring the concept of using fermentation and single-cell proteins to produce fish-like products such as paste and slices with the nutritional profile of real fish.

If this technology takes off, overfishing will become a thing of the past.

His European companies also push the boundaries of what is possible in the food space. During this interview, Tan talked excitedly about peptides and lignin as well as other jargon that required me to do a lot of research afterwards.

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And the one that caught my attention was, interestingly enough, rice. Interesting because a European start-up was working on an Asian staple or, more specifically, the water used to wash the rice before it’s thrown away. “That has a lot of starch and is rarely upcycled. The particular technology we’ve invested in can convert this high-starch waste water into proteins and polypeptides,” he shares.

How does all this technology benefit the man in the street? That’s where Tan comes in: “There is that intellectual temptation to create the perfect technology, but this might take three to five years – and lots of money. So it’s important to translate the science into commercial value by creating a minimum viable product that allows you to go to market in a shorter time frame. Subsequently, you can use the revenue to continue funding your research.”

However, Tan admits that the main challenge is still the costs. Most products derived from technology – cultured meats, cell-based seafood and their ilk – remain expensive. While many might try them because of the novelty factor, most would still revert to that slaughtered cow grown on a farm. Tan aims to bring costs down to a commercially desirable level.

The second challenge, surprisingly enough, is texture. Researchers have discovered that our brain tells us that we’re eating – let’s say, foie gras – through taste, fat content and texture. Most food scientists have managed to nail taste profiles but texture and fat are still issues.

Yet more impossible odds. Perhaps there is no better person than Tan to bring this home.

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