When we think of accelerators, some typical concepts come to mind: fancy (free) services, garish keynotes, equity investment, and of course, a demo-day with a crowd of venture capitalists as exclusive as the presenting batch itself.
But Chipotle, the multinational bowl-or-burrito behemoth with a market cap of $19 billion, is taking a more down-to-earth approach.
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Its accelerator for food startups, Chipotle Aluminaries Project, has a cohort of eight companies focused on sustainable food and development. The 7-month program is run by the Chipotle Cultivate Foundation and Uncharted, a third-party non-profit foundation.
Startups will get some of the works: a bootcamp, mentor sessions, headshots, a group message, free burritos for a year and Chipotle catering on demand. But they’re not expecting any cash.
Since the foundation is running the accelerator, it limits it from investing directly in the companies, said Caitlin Leibert, director of sustainability for Chipotle.
“By making this a foundation effort, we’re making it clear that we’re focusing on the greater good,” Leibert told me. How that jives with the traditional definitions of an accelerator is debatable.
That said, startups in the cohort just finished up a 5-day boot camp hosted at Newport Beach last week, with Chipotle executives and mentors such as Kimbal Musk (brother of that Musk) and Richard Blais.
We caught up with a few of them below.
Tinder For Cows, Ostrich Burgers, And More
Alexander McCoy, founder of American Ostrich Farms, said on the first day of the bootcamp he directly approached Chipotle CEO Brian Niccol, and spoke to him about ostrich. Ostrich is the future of livestock, McCoy believes, claiming it has the same taste as red meat, but is better for the environment.Chipotle’s First ‘Accelerator’ Is Serving Credibility Over Cash
McCoy said he’s focused on credibility, over cash, right now.
“At the end of the day, if Chipotle says ostrich is a good idea, maybe you should too,” he told Crunchbase News. He’s also participating in another accelerator at the same time, Food System 6, that will help him focus on perfecting his product offerings.
We also caught up with Rex Animal Health, founded by chemist Amado Guloy. The company wants to support animal health, and help farmers breed animals with favorable characteristics, for better meat or dairy. It’s been lovingly called “Tinder for Cows” by customers.
Guloy explained that the agtech space moves at a different pace than other startup industries, so when he saw that Chipotle was taking zero percent equity, it was a “no-brainer.”
“Our customers are typically slow adopters, we have really long enterprise sales cycles, there are regulatory challenges,” he said. “It takes a bit longer to find that product market fit.” When organizations want to help with no equity, there’s no risk, he said.
Another interesting startup in the batch is GrubTubs, which helps recycle food waste into affordable animal food. They have over 200 customers, including Facebook in Austin, said founder Robert Olivier.
The lack of the classic elements of an accelerator was part of the appeal, especially when it comes to startups that aren’t looking to scale fast – but instead, sustainably, Olivier said. Chipotle gave startups a “look into their excel sheet” on how it managed this. When investing is taken out of the criteria for a group of people to meet together, special things happen, he said.
“In a normal VC accelerator, you’d be talking about unicorn status, scaling, and growth – here there is no unicorn crystal ball,” he told Crunchbase News.
Slow but steady
We understand the agtech industry moves at a different pace for a variety of reasons, and is not necessarily tied to fast funding. Still, some accelerators are finding ways to invest in these companies early on.
Techstars Sustainability Accelerator, for example, is a 3-month program that provides seed funding for all entrepreneurs in its cohort, and a demo day, reported Forbes. Recently, Cornell’s AgriTech community launched the Center of Excellence For Food and Agriculture to help promote entrepreneurship. Catharine Young, the executive director of this center appointed earlier this month, said it plans to work with venture capitalists as part of its plans.
Bottomline: “You cannot take the Silicon Valley ethos of ‘do things fast, fail fast, and break things’ and apply it to food and agriculture,” Rex’s Guloy said.
The Chipotle accelerator was just renewed for a second class, and it will begin looking for applicants for its new batch shortly. It plans to keep this endeavor a foundation project to propel the idea that it’s for the greater good, avoiding some of the criticism corporations get on being self-serving when investing in startups.
As for why Chipotle’s corporate side didn’t eye this as an investment opportunity? For now, that’s not on the menu.
Illustration: Li-Anne Dias