This investor shares how agritech and foodtech startups should do corporate partnerships

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Isabelle is a star contributor for Tech in Asia and publishes exclusive, high-value content that serves the Asian tech community. Read more from star contributors here.

The term open innovation (a mindset of increased “inter-firm cooperation in R&D”) was coined back in the 1960s and is more fashionable than ever. There is abundant literature for startups on how to navigate the pitfalls of collaborating with corporates. However, for agritech and foodtech startups across the APAC region, a generic understanding of what makes it work or fail is not sufficient.

US business intelligence sees the urgency for corporates to embrace open innovation as it relates to food. According to Harvard Business Review, out of the 2.3 percent annual growth rate of US grocery stores’ food and beverage category, only 0.1 percent was contributed by the largest 25 food and beverage companies.

While Western multinational companies are now becoming deliberate in their efforts for cooperation, how does this translate in the region?

A focus on the west

I work for Future Food Asia, a platform looking to accelerate open innovation in agritech and foodtech across the APAC region. Out of the 35 food and agriculture (F&A) corporations actively or more distantly engaged with our program, 40 percent are Asian. Yet their path to adopting open innovation is consistently different from what we have noticed with Western corporations.

A very clear pattern emerges: Promoters often invest in tech startups in the US and sometimes in China. As the Silicon Valley and a growing number of US and European innovation hubs are jumping on the “sustainable food” bandwagon, early VCs are starting to consider this new vertical as meaningful and sensible to their business.

Increased Asian collaboration

When we launched Future Food Asia back in 2016, the common thinking was that good startups were to be found outside Asia. But things are moving fast. Localization is paramount in F&A, and senior corporate executives are beginning to show interest for Asian startups. Over the last six months, we’ve facilitated 20 collaborations between APAC startups and corporates, of which one-third are currently at the pilot stage. Overall, 60 percent of these collaborations take place in Asia.

From our experience, Asian F&A corporations rarely have an open innovation framework but are very willing to give it a try.

With this context, I would like to share a few pieces of advice for Asian agripreneurs.

The ‘obsession of occident’

Asian corporations—not to mention Western ones—will still want to know how your innovation, technology, or business model compares with its Western peers. Get to know your competition outside the region. They will be for many more years the mental benchmark amongst your potential investors.

Know also that compliance with US regulations, like US Food and Drug Administration (FDA) approval or achieving generally recognized as safe (GRAS) status, is seen as a passport for your startup.

Align your interests

Be careful if executives find your startup just “interesting.”

In our program, we try to make both parties define what a successful outcome will look like and shy away from situations where none of them can define it simply. This is because the territory of open innovation is often adjacent to a corporate’s core business. So, both parties need to give some thought into how they can work together.

Plan wisely