Foodtech incubator The Kitchen faces uncertain future after Strauss cuts investments
Foodtech incubator The Kitchen faces uncertain future after Strauss cuts investments
Three of the incubator’s seven employees have been laid off, while the CEO and CBO have seen their roles reduced, after Strauss decided to halt its investments
The cutbacks at Strauss have taken a heavy toll on its foodtech incubator The Kitchen. Calcalist has learned that three out of seven employees have been laid off. The impacted employees held positions in marketing and administration within the incubator. Additionally, Jonathan Berger, CEO of the incubator, and Amir Zaidman, Chief Business Officer, will see their roles reduced to part-time, accompanied by corresponding salary decreases.
These cuts come in the wake of Strauss' decision to cease investments in the incubator. Initially, Strauss sought a complete exit from the incubator and leaving its running to the Israel Innovation Authority. After negotiations, however, it opted to continue operations with significantly reduced expenses and investments, focusing only on strategic ventures that align with its objectives.
Established in 2015 as a joint venture of the Israel Innovation Authority (IIA) and Strauss Group, the incubator aimed to invest in pioneering technological ventures within the food industry. The first round saw 21 companies develop various products, including reduced-sugar juice and egg alternatives. One notable success story was Aleph Farms, which specializes in cultured meat and raised $105 million, resulting in a substantial profit for Strauss. The second round, launched in 2022, included five companies.
Since its inception and until the end of the third quarter of 2023, the incubator has invested in 25 companies, some of which have completed product development, started initial sales and raised follow-on investments. But Strauss only participated in some of these fundraisings and did so with insignificant amounts. From the beginning of 2023, the incubator invested in nine companies.
As of last September, the total value of the investments in the incubator companies according to the balance sheet value method amounted to NIS 113 million (approximately $31 million), compared to approximately NIS 138 million in the corresponding period in 2022. In its reports for the summary of the third quarter of 2023, Strauss stated that in its estimation in the foreseeable future it is expected to record losses from the incubator companies.
In the meantime, it seems that the efficiency plan that Strauss presented about a month ago, which included the dismissal of 150 employees and the consolidation of divisions, did not increase the confidence of investors. The company's stock rose in the middle of last month, immediately after the publication of the plan, but soon fell back.
