Aug 2023
Brita Rosenheim is an early-stage investor at Vita Vera Ventures, which she and Beatriz Franco founded in early 2023. After two years at Culterra Capital, Rosenheim is building a highly visible platform to connect with founders across the industries and show fellow investors that the unique challenges of the food supply chain, delivery and food tech are still worth investing in.
Most food-tech equity partners work in the shadows and keep things close to the vest, so one might not expect an investor to be the source of some of the most thoughtful ideas in the sector, unless you’ve met Brita Rosenheim.
Known for the wheel she releases every year that graphically illustrates the key players in 15 corners of the restaurant tech ecosystem—published with a lengthy article outlining her predictions for the next year—Rosenheim has quietly built a reputation as one of the most trusted voices in foodservice and the future of restaurants.
In recent months, while many investors pulled back from agricultural and food tech startups, her up-to-the-minute awareness and long-term vision is in higher demand than ever as once-high-flying startups now find themselves out of runway and drastically revising their pitch decks to demonstrate an expedited path to profitability.
Given how much of the last decade’s evolution has been driven by investment dollars, this shift in investor sentiment is already having huge implications for the next phase of restaurants and the food industry, especially thinking of the role investors have played in helping brands like DoorDash, Toast and Impossible Foods revolutionize their respective categories.
Whatever comes next in delivery integration, supply chain logistics, sustainable packaging, artificial intelligence, alternative proteins or food waste management, Rosenheim will be found somewhere near the center of that wheel.
Seeking ‘infectious’ conversations
When asked about her cumulative impacts over the years, Rosenheim will be the first to defer and stress that she’s only one member of a team pushing together in the same direction.
As one of the co-founders of Vita Vera Ventures, she has pushed through personal and outside barriers to take a bolder stance in what her firm calls overlooked sectors in food and ingredient tech, sustainable packaging and materials, supply chain logistics and B2B technology in retail and restaurants.
Its other co-founder, Beatriz Franco, is especially motivated by the sustainability angles within food and climate tech. After many years as a corporate lawyer at blue-chip firms and nine at J.P. Morgan, Franco became CEO of Advanced Potash Technologies, which developed a technology to transform a common mineral into a sustainable fertilizer that improves soil health.
Franco’s environmental focus and experience as a corporate lawyer, banker and CEO pairs well with Rosenheim’s background as a C-suite advisor and an investment banker at some of the largest firms in the industry, including Robertsons Stephens, Cowen and Think Equity.
Rosenheim began as an analyst focused on small- to mid-cap restaurant and retail companies. After launching her eponymous firm, Rosenheim Advisors, in 2010, she sharpened her focus to strategic and financial consulting leading more than $600 million in strategic investments, acquisitions and divestitures.
Along the way, she’s never been far from the environmental benefits of smarter digital infrastructure, materials and a more efficient supply chain, adding that her own motivators are “very corny” and “sound like B.S.”
“I’m an investor because I love supporting founders and I love working with teams at the beginning of their journey,” Rosenheim stressed. “And I love helping support and shape them into what they can be like.”
That could entail suggesting a new focus for a startup or advising a company to diversify its leadership.
While she’s quick to point the spotlight at others who’ve championed big ideas, Rosenheim is excited by helping “strategics and incumbents” understand what’s possible, even if it means working hard to change the trajectory of a really big ship. Given the number of legacy restaurants in need of new thinking, the runway for such priorities appears endless.
Even taking into account the progress made by delivery drones and kitchen robots, voice ordering in quick-service restaurants or bringing machine learning to manufacturing, finding less flashy ways of changing the world and working with teams propels Rosenheim out of bed in the morning.
“A lot of the advisory work I’ve done is, I would say, very entrepreneurial, although I didn’t see it [that way] at the time,” she added. “Now a lot of the struggles that entrepreneurs are dealing with, I’ve struggled myself in my own business, but I feel pride and excitement and frustration. I’m very involved with the teams I work with, even if I’m not an investor.”
That enthusiasm shows itself during one-on-one conversations where Rosenheim is animated by innovations that might not grab headlines like a new drone delivery announcement, but arguably could have a more immediate, positive impact on the environment.
“The entrepreneurs that we’re working with and supporting and investing in are literally changing the world,” she added. “Every single company that we’ve invested in, I can explain how they’re changing the world or how they will change the world, and that’s euphoric. I love that.”
Such conversations get to the heart of Rosenheim’s motivations, which center around the human element of early-stage investing where emotions typically run high and the potential feels infinite.
“It’s a privilege to be able to talk to founders, people who are by design more courageous than I am, and willing to put their life on hold, if not outright stop, and to risk their entire financial future because they’re excited and they believe in something,” she said. “Conversations with those people are infectious.”
Feeding the machine
A significant part of Rosenheim’s career path has been mustering the confidence required to stand up atop her own self-made platform. Within an industry of big personalities, she said the capital community is especially cloistered and in need of new voices.
For more than a decade where people have come to her for advice and perspective, Rosenheim looked around and “didn’t see other general partners at investment firms that look like me or sound like me or have my background.”
That meant that part of her journey required becoming comfortable with her own experience and vision, as well as “trusting in myself that…I’m the one to make a difference versus looking to other people for that validation.”
One of the ways she broke through those hesitations is becoming a primary source of knowledge herself, rather than relying on someone else’s insights or talking points. This entails significant time spent with industry leaders and fellow investors, even if she wasn’t ultimately investing in the company. It also includes dedicating time every week to “office hours” where anyone can grab a moment of her time.
While analysts are always happy to discuss industry trends, investors tend to be a different story—and much more secretive. It’s nearly unheard of for the SoftBanks and Tiger Globals of the world to invite such public-facing conversations or to speak with the media about current or past investments.
Vita Vera tends to follow what’s happening behind the scenes, while helping potential clients understand the entirety of the possibilities they’re enabling or how technology could ultimately be leveraged or purchased by even larger entities.
Rosenheim pointed to a startup helping grocery purchasers reduce food waste through better forecasting as an example of positive externalities paired with investment opportunities.
“For me, that was kind of the perfect marriage,” she said. “We can actually help change the world and help change the business and not just be kind of a save-the-world idea, but also continuing to feed the machine and make the machine stronger.”
Frustration with ‘tourist’ investors
Vita Vera Ventures’ website highlights the company’s focal areas, including new applications of artificial intelligence, machine learning, advanced materials and automation—with a bend toward practical, close-and-hand opportunities rather than pie-in-the-sky moon shots.
Addressing the recent capital destruction that’s happened in agricultural and food tech, Rosenheim is frustrated by what she calls “tourist tech investors” who came into the industry “without a lot of nuanced understanding of the sector” and fueled unrealistic valuations.
That investor reticence is clearly an opportunity for Vita Vera. Rosenheim says such investors “created their own intuitions about what they thought made sense for the sector based on their experience in other sectors like retail, social media or other categories that don’t have the same rules and food and beverage more broadly, including hospitality.”
The investor slowdown is notable according to new data from PitchBook showing investment volume down 62 percent from its peak, and down 40 percent from the first quarter of 2023.
With that trend in mind, Rosenheim said she’s grateful to those investors who raised awareness of the possibilities remaining at the intersection of food and technology, but said the same “overfunding” that birthed countless new companies in the space is now having the opposite impact as they shy away from the category.
“Oh, we made ecommerce work, why can’t we just snap our fingers and make food delivery work? It’s still really hard, and the people who are doing it still are not making any money on it,” Rosenheim said. “A lot of these investors are go-big-or-go-home investors, which makes more sense in enterprise SaaS than food…DoorDash is a beneficiary of this mindset, so it’s not that it hasn’t worked for some people.”
Examples can be found across the space, including meal kits, which haven’t taken off as advertised in the wake of the Great Recession, as well as rapid grocery delivery that was poised for explosive growth at the start of the pandemic but quickly fizzled out.
This recent craze pushed some unicorns beyond the total valuation of their respective categories, and Rosenheim is anxious to move beyond this hangover and get back to more reasonable expectations for companies that still need capital to reach their potential.
“I do think even the flame-outs have created progress, but unfortunately a lot of the money was basically just lit on fire—and now investors in the early rounds of this don’t want to get burned again,” she added. “It’s like the clean-tech hangover of the early aughts…they put too much money into the industry before it was ready and then it blew up, people felt burned from it, and didn’t want to touch it again.”
To encourage less transitory investing, Rosenheim believes grassroots community building can make a difference in the long term, both for founders in need of capital and among investors kicking the tires on first-time food tech investments.
“A lot of my work is driven by impatience,” she said. “There is patience, but it’s also like, no, we’re not going to talk about this for five years down the road. It’s not a nice-to-have in the future, it’s like how do we make change now? It’s urgent, and it manifests impatience.”
Read the original article here: https://foodondemand.com/08092023/brita-rosenheim-at-the-center-of-restaurant-tech/
Vita Vera Ventures is an early stage venture fund focused on Climate Tech & Supply Chain Tech advancing the resiliency, sustainability, and efficiency of our Food System. If you are an early-stage entrepreneur building with this in mind, we would love to hear from you.
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