FoodLogiQ Lands $19.5M for Food Safety and Supply Chain Software
For some time, consumers have been demanding that food companies provide more information about the origins and the safety of their food. Soon, regulators will require it. FoodLogiQ has commercialized software that provides details on food as it is harvested or processed, and moved along the supply chain. As new food safety rules loom, the startup is gearing up with $19.5 million in financing.
Renewal Funds, a venture capital firm based in British Columbia, Canada, led the financing round that Durham, NC-based FoodLogiQ announced Thursday. In September, the company announced Renewal would lead FoodLogiQ’s Series B round, though it did not disclose specific financial details. Later that month, a securities filing showed FoodLogiQ had raised $4.25 million out of a targeted $8 million.
Since September, FoodLogic has lined up a group of prominent financial backers that include the investment arms of food companies and firms noted for their investments in food startups to join Renewal. The other investors participating in the oversubscribed financing now include Testo, Tyson Ventures, Pontifax AgTech, Nicola Wealth Management, and Greenhouse Capital.
FoodLogiQ, founded in 2006, traces its origins to Canada, where its technology was first used to track cattle. The software was developed into a more comprehensive food industry offering under FoodLogiQ’s parent company, Durham-based life sciences and consumer products consulting firm Clarkston Consulting. Clarkston had provided all of FoodLogiQ’s funding until the current round of financing.
FoodLogiQ’s software provides detailed information, such as where food has been shipped and stored and whether produce was grown using pesticides. Today, FoodLogiQ says more than 7,000 businesses use its software in more than 100 countries. Publicly disclosed customers include a number of restaurant companies familiar to consumers, such as Buffalo Wild Wings, Chipotle Mexican Grill, CKE Restaurants, Five Guys Burgers and Fries, and Panda Restaurant Group. But the pressure is on for companies across the food sector to improve safety. In 2011, President Obama signed the Food Safety Modernization Act (FSMA), which gave the FDA broader power over food regulation. Among the law’s goals is preventing foodborne illness rather than responding to it.
The various FSMA rules are being phased in over time. The rule covering intentional alteration of food will take effect on the largest food businesses in July 2019. The rule will require companies to have a “food defense plan,” essentially a way to identify vulnerabilities in the food supply and reduce the risk that someone could intentionally alter or contaminate food. The idea is to prevent terrorist attacks on the food supply. In a blog posted this week, FDA commissioner Scott Gottlieb said that companies will have the flexibility to come up with their own plans that are cost-effective and tailored to their facilities.
“We want to make sure these new measures can be implemented in a way that’s the least burdensome while achieving [the law’s] intended, food protection purpose,” he wrote.
FoodLogiQ aims to be one of the options that food companies choose. In its own blog post, the company claims its software can “pinpoint exactly where adulterated food has gone in your supply chain, and remove it with precision.”
FoodLogiQ says it will apply the new capital toward product enhancements, research and development, and expanding its sales and marketing.