Venture Capital Is Hungry for the Food Business

The food business is “ripe for disruption,” according to Steve Case, who cofounded America Online 30 years ago.  Case, who recently started his Washington-based venture capital firm Revolution, has made several high-profile bests on food: Sweetgreen, OrderUp, and Revolution Foods, a school-lunch company serving 1.5 million student meals per week.

“There are opportunities to improve the way things are done at every level: How food is produced, exported, processed, consumed,” Case said in an interview this week. “Our focus … is on investing in people and ideas that can change the world, and it’s harder to imagine anything that changes the world as much as food.”  To Case, the opportunity is, like in tech, in scalability: “It’s one thing to create one product in one particular restaurant,” Case said. “It’s another thing to roll it out to 5,000 restaurants, where the chefs are 16-year-old kids who have worked there for a few hours.”

Case thinks that the low barriers to entry and potentially high profit margins are partially why so many successful food companies have rested on their laurels, and this is where tech will come in to disrupt–especially given that eaters are embracing dining out more often and using apps for payment.  Sweetgreen, one of Case’s investments, is a salad shop that receives more than 20% of its orders through the chain’s mobile app.

“We’re in the first days, the early innings of this food revolution,” he said. “Nothing’s more important than what you put in your mouth three, four, five times a day.”

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