Venture

Boston’s Tech Scene Might Be More For Foodies Than Biotechies

The Greater Boston area’s startup scene has long been seen as synonymous, even exclusive, to its biotechnology lineup.

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But let’s say we strip away the tech-focused neighbors of Boston, like Cambridge for example. You’ll see that Boston alone might be viewed as more than a healthcare-focused town.

Looking at the last 12 months within Boston, out of the 10 biggest funding rounds, only one went to a traditional biotech company: Karuna Therapeutics, a developer of drugs for the treatment of schizophrenia. It raised a $68 million Series B in March, led by ARCH Venture Partners.

Extra Servings

Interestingly enough, Boston-based startups that work with food—from catering to developing ingredients for plant-based protein—have raised significant funding.

For example, Stefania Mallett, the CEO and founder of catering service ezCater, started a food company in an area where food is not the primary industry has worked out well. The company, which uses software to connect caterers to companies, raised nine-figure rounds twice in the past year.

The city’s ability to change has been key in her success. When she graduated from Massachusetts Institute of Technology in 1977, for example, Boston was pivoting from the hardware capital of the world, to the software capital of the world.

Stefania Mallett, CEO and co-founder of ezCater.

“But then that disappeared too, and a lot of it went to the West Coast…but it never died,” she said. “It’s just been eclipsed by things like pharma and biotech.” She said a few high-tech companies beyond biotech have found a home in Boston as a result of previous software roots.

As Mary Ann Azevedo reported, the company has more than doubled in revenue and bookings every single year for the last seven years.

One of those companies includes Toast, a restaurant management platform launched in 2013 that is now valued at around $2.7 billion. It raised the biggest round within Boston during the past 12 months. In March, Toast raised a $250 million Series E, at which time the company said its revenue grew 148 percent in 2018.

The 1,500-person company told Crunchbase News that it plans to invest over $1 billion in research and development over the next five years. Touching on Mallett’s earlier comments, Toast says part of that money will go to building software and hardware to cater to the restaurant industry.

Jumping away from late-stage unicorns, but staying in the food realm, early-stage company Motif Ingredients also made the list with its $90 million Series A, for meatless protein. In a world seemingly-ruled by Impossible Foods and Beyond Meat, Motif similarly looks to use fermentation to develop proteins and nutrients. The company has bits of biotech embedded in its DNA, as Motif Ingredients spun out of Boston-based biotech unicorn Ginkgo Bioworks.

In a statement, Motif said it will use biotechnology rather than animal agriculture to engineer dozens of proteins, derived from dairy, egg and meat.

As Boston pivots beyond biotech, Silicon Valley-based investors have taken notice, and a liking to its new offerings. In our list, a slew of Bay Area investors—TCV, Lightspeed Venture Partners, Meritech Capital Partners, Sapphire Ventures, and others—are found on the term sheets of Boston’s largest rounds.

Illustration: Li-Anne Dias.