Main Sequence Ventures is focused on food innovation, thinks Australia could lead the world
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Within Australia’s venture capital (VC) landscape, Main Sequence Ventures has a unique vantage point at the intersection of Australian science and commerce.
The CSIRO’s $230m innovation fund is often the first port of call for companies that have been spun out of the local science ecosystem.
As a partner at the fund, Phil Morle has reviewed thousands of investment opportunities across deep tech and life sciences.
But speaking with Stockhead, Morle highlighted one trend that stands out in the Australian market: how to feed the world’s growing population in a sustainable way towards 2050.
“The big one for me is the next generation of food,” Morle says.
“I think we’re at in inflection point in the industries that make our food. And there’s so much that science can do, so many companies and industries to form — which is a perfect environment for venture capital.”
In discussing that inflection point, Morle highlighted it was a global issue; agricultural resources are already strained with a heavy reliance on fertiliser to meet crop demand, yet we need to produce “twice as much food over the next 20 years”.
He also thinks Australia is well positioned to play a key role in that shift, with the second-biggest agricultural land region in the world and intellectual property around food innovation that’s been “100 years in the making”.
As an example of the global interest, Morle recently returned from a US visit where he saw the same investment thesis high on the agenda of the big players in US private capital.
“Everyone from the venture arms of (Google parent-company) Alphabet and the big food companies, to traditional VC funds, they’re all getting into the science of food and how food is made,” he said.
He says domestically, there are two key themes to watch, both of which Australia can be a global leader in.
The first is plant-based food products, derived from natural resources such as legumes and beans.
“Australia is a leading provider of that raw material in the world,” Morle says. “We’ve got tons of it — enough to be a global player in plant-based meat.
An early Main Sequence investment in the space is v2foods, which was spun out of the CSIRO and recently partnered with Hungry Jack’s to develop a plant-based burger alternative with mass-market application.
But in order to meet global demand, science needs to figure out how to do more with less. That’s where synthetic biology — the second key trend — will be critical.
“It’s not about replacing meat options like cows or chickens; it’s about how do we make twice as much?” he said.
As an example, synthetic biology can be applied to create proteins derived from fermented yeast and sugar which have the same nutritional content as animal proteins.
“In the context of Australia, we have an incredibly talented pool of synthetic biologists,” Morle says.
And many of them are looking to commercialise the next big opportunity in alternative food products.
“On the fermentation and synthetic biology side, we probably see one of those opportunities every couple of days at the moment. And it’s certainly an area we’re actively investing in.”
Ultimately, Morle says the scale of global demand means the market for one product is unlikely to grow at the expense of another.
He cited the example of cattle farmers, who already grow legumes and beans as rotational crops to feed livestock.
“Australian meat producers can also be plant producers. It’s not a cannibalisation, it’s a multiplication.”
The key point now is to leverage decades of intellectual property developed by Australia’s best-in-class agriculture practices, and continue to find smarter solutions.
And it’s an area where Main Sequence is “having to work very hard”.
“We believe the way this happens at an accelerated pace is when science, venture and industry work together,” he says.
“Australia’s become a country that’s well known for doing that better than others. We’ll do it faster and become adopted faster, and known across the world for food innovation.”