Pandas wants to give Latin American businesses buying power in Asia

Access to global supply chains can be difficult for small businesses in Latin America, but companies like Meru, which raised funding in March to source and import goods between Mexico and China, and now more recently Pandas, are tapping into overseas relationships and technology to make this easier.

In Pandas’ case, the company is doing something similar to Meru, but starting in Colombia, connecting small businesses directly with Asian manufacturers, so that they can reduce the high fees often imposed by half a dozen importers and intermediaries as well as logistical problems that all businesses are facing right now where inventory is now taking many more months to arrive than during pre-pandemic times.

Co-founders Rio Xin and Marcos Esterli started Pandas just three months ago to provide Asian-origin inventory to micro-businesses in Latin America. Their collective background includes careers at McKinsey and Treinta for Esterli, and McKinsey, with more than seven years spent in China, for Xin, where he told TechCrunch he developed a strong network in the region.

“The main issue that we’ve seen is people who don’t understand the Chinese language or how Chinese manufacturers work and then you add in the logistical problems,” Xin added. “We are able to bridge the breach, while at the same time having our team in China to overcome all these logistics problems.”

Pandas B2B marketplace

Pandas B2B marketplace. Image Credits: Pandas

Here’s how it works: Businesses order products via the Pandas marketplace, touting lower pricing, in which the business can make purchases in a few clicks. Pandas takes it from there, offering one-day-delivery and customer support.

Esterli explained that people in Latin America have been using smartphones for their personal finances and other tasks, but that has not translated as quickly to the business side.

“A lot of customers told us Alibaba was something they wanted to use, but that it was very complicated to figure out,” he added. “We wanted to build an easy solution that was super intuitive because business owners don’t have that time to spend.”

Initially providing basic electronics products — think headphones, accessories and cables — and with a new round of funding, $5.8 million pre-seed, Pandas will move into categories like textiles and home accessories. The company touts the pre-seed investment as “the largest pre-seed financial in Spanish-speaking LatAm to date.”

Third Kind Venture Capital led the round and was joined by Acequia Capital, Picus Capital, Tekton Ventures, Partech, Liquid2 Ventures, Clocktower Technology Ventures, Gaingels and a host of individual investors, including Tul’s Juan Carlos Narvaez, Jose Jair Bonilla from Chiper, Treinta’s Man Hei and Lluís Cañadell, Pablo Viguera from Belvo, Nowports’ Alfonso de los Rios, Sujay Tyle from Merama and Ironhack’s Gonzalo Manrique.

So far in its young journey, the company is growing 100% month over month and has amassed a supplier network of about 300 out of 5,000 in China, Xin said.

In addition to moving into those new inventory categories, the new capital will enable Pandas to scale its operations, technology and product development and make new hires.

Xin expects to be in most of the main markets across Latin America in the next three years. In the meantime, new features coming down the pipeline in the next 12 months include a suite of fintech and analytics tools like financing.

Yali Bio wants to fatten up plant-based foods

Enticing people to change their eating habits, especially to try alternative meat products, is a challenge for food tech companies because people want that product to taste, smell and feel like actual meat.

Yali Bio is one company that thinks it has cracked that code by focusing on designer fats for plant-based meat and dairy products. It is building a platform to tailor-make fats aimed at enhancing the flavor of alternative meats.

The process involves synthetic biology, deep learning and genomics tools that produce fats that are more sustainable than the current oils, like coconut, that are used in plant proteins, but also mimic animal-based analogs in terms of flavor and texture, CEO Yulin Lu told TechCrunch.

Lu and Chief Scientist Peng Xu founded the California-based company in 2021. Lu comes from a foodtech background, working previously for Impossible Foods and Eat Just scaling up technology platforms to produce commercial products. Peng works in synthetic biology in making lipids in microbial systems.

“It is clear to me that the product quality and consumer experience has reached a plateau,” Lu said. “We see successful brands in the space of meat, but it is hard to go beyond that. There are so many premium meats people like, and the key missing component is the fat to elevate the quality of the product.”

He explained that nearly all companies use coconut oil for the replacement of fat in plant-based meats. It’s not the same flavor as meat, so food manufacturers have to add flavor additives that lead to not-as-good-for-you ingredient labels. With its technology, Yali Bio aims to create a broader selection of functional fats to “unlock the market, which is limited by quality of product and consumer experience,” Lu added.

Now that it has identified fats as what is needed, the company is working on how to make fats into a product system that is highly efficient. There are different systems and approaches in use currently, including using animal cells or fat tissues.

Yali Bio is instead taking a precision fermentation approach using microbes. It is building a proprietary technology to build up a microbial strain library and test them out. Getting to the next step is to demonstrate the fermentation bioprocess by running the strains in fermentors as part of pilot programs to prove production at a small or intermediate scale.

Those next steps led to the company going after some capital. Lu participated in an accelerator program for the last six months and is in the process of building a new laboratory. The startup raised $3.9 million in seed funding in a round led by Essential Capital, with participation from new and existing investors Third Kind Venture Capital, S2G Ventures, CRCM Ventures, FTW Ventures and First-in Ventures. Stephanie Sher and John Goldsmith also participated as angel investors. The funding brings Yali Bio’s total funding to $5 million to date.

Part of the funding will go toward the lab, but also into the company’s synthetic biology component, product development, identifying business partnerships, marketing and recruitment. The company has seven employees currently and a number of open positions in the area of product, food science and fermentation that should help Yali Bio to be around 12 people by the end of the year.

Though Yali Bio’s technology will take time to get up-and-running, Lu said it is not unlike other approaches. For example, the cell-based approach was in the first wave started over seven years ago, and some are at pilot scale or have limited release in restaurants, like Eat Just, or with food makers, like The EVERY Co, which is also using precision fermentation.

“We know what we can do with the existing team and we want to add additional capabilities to take the company from the biotech R&D company to having tangible products,” Lu added. “We want to demonstrate with precision fermentation that we can get to tangible products and samples much faster compared to other technologies. It depends on the regulatory process, the finished product and the technical complexity, but we think we can do it in two to three years.”

Meanwhile, Edward Shenderovich, managing partner at Essential Capital, said most investors are new to the food alternative space, especially to the world of synthetic biology being applied to food as the technology has matured.

He believes we are at the forefront of a fourth agricultural revolution, where every one previously led to lower costs and increases in product volume and quality. This fourth one is led by bio manufacturing and will be a massive change in supply chains and value creation opportunity for those involved, he added.

“Anything that enables us to move from an animal-based agriculture to an animal-free world using bio manufacturing is a worthy pursuit,” Shenderovich said. “Yulin identified an important pain point in the adoption of plant-based, fermented and cultivated food. Most cultivated meat is just proteins, and we like to eat fat. Fat has been demonized, but it is making a comeback.”

SoftBank-backed Embark Veterinary valued at $700M after $75M Series B

Now that you have that COVID dog, Embark Veterinary wants to help him or her be in your life for a long time by offering DNA testing with the goal of curbing preventable diseases and increasing the lifespan of dogs by three years within the next decade.

The Boston-based dog genetics company raised $75 million in Series B funding in what the company is calling “the biggest Series B for a pet startup to date.” SoftBank Vision Fund 2 was the lead investor and was joined by existing investors F-Prime Capital, SV Angel, Slow Ventures, Freestyle Capital and Third Kind Venture Capital.

The new round boosts Embark’s total funding to $94.3 million since the company was founded in 2015, according to Crunchbase data. It also gives it a post-money valuation of $700 million, Embark founder and CEO Ryan Boyko told TechCrunch.

Boyko has been a dog lover all his life, and also interested in biology and evolution. Dogs, in particular, are fascinating to him because of their variety: they can be bred to be two pounds or 200 pounds, and come in all shapes and sizes. His interest led him to study dogs in order to understand their evolution.

“I began to think about health problems, and honestly, dogs are a better system for using genetics to better their health than humans,” Boyko said. “You can breed them, so genetics has as much power to cause health problems as it can improve quality and life.”

Embark’s dog DNA test retails for $199 and enables dog owners, breeders and veterinarians to personalize care plans based on a dog’s unique genetic profile. It can test for over 350 breeds and 200 genetic health risks, as well as physical traits. Similar to a 23andMe test, test users can learn characteristics about breed, health and ancestry.

For example, the test could show that a healthy dog may have a gene that predisposes them to slipped discs. If the dog has that, then weight management would be an important factor in their care regime, as would not allowing them to jump off the couch. Another common genetic risk is HUU, or Hyperuricosuria, which is elevated levels of uric acid in urine that could lead to bladder stones due to the way dogs process minerals. By changing the dog’s diet, it could reduce the risk for developing the stones, which are painful and expensive to treat, Boyko said.

The test’s technology revolves around proprietary genotyping technology that analyzes more than 200,000 genetic markers, currently two times more information than any other dog DNA test on the market, Boyko said. This gives Embark the world’s largest database of canine health and biological information, enabling the company to provide insights into certain conditions and make new discoveries about health risks, traits and breeds.

Embark aims to become the standard of care for dog owners and vets. It grew 235% between 2019 and 2020 and saw five times the sales over the past two years. To support that growth, the company intends to use the new funding to bring on key hires and expand its database. Boyko anticipates adding more than 100 employees between 2021 and 2022.

Boyko said the opportunity in the pet startup space is huge. Indeed, U.S. spending on pets reached nearly $100 billion in 2020, up from $95.7 billion in 2019, according to the American Pet Products Association.

At the same time, venture capital interest in U.S. pet-focused companies, from nutrition to travel to healthcare, grew 29.5% from 2019 and 2020, according to Crunchbase data. In addition to Embark’s funding, 2021 was good to other pet startups as well, including pet insurance company Wagmo, raising $12.5 million, connected pet collar company Fi received $30 million and Rover, which announced plans to go public via SPAC.

Lydia Jett, partner at SoftBank Investment Advisers, told TechCrunch that this was her first pet-based investment, and what Embark is doing brings advances to a category right now where people care about their pets enough that they want to do something that will expand their value of life.

Jett said the management team being dedicated to DNA-based analytics is the future, and Embark is starting this big curve when it comes to pets and the convergence of real emotional ties to pets and the ability to improve their lives.

“This company is a driver of change to happen,” she added. “We are the largest consumer investor in the world, and Embark is very much aligned with what we are seeing across our portfolio that consumers are revisiting priorities and choices. That is a major trend, but still early in the cycle of personalization for their pets.”