Investors Are Hungry for Food Startups Traditionally a field dominated by technology and biotechnology, venture investors have developed an appetite for food.

By Katie Roof

This story originally appeared on FOX BUSINESS

Traditionally a field dominated by technology and biotechnology, venture investors have developed an appetite for food.

With significant funding rounds for meal delivery services including HelloFresh and Blue Apron, food-related investments are on pace for the best year on record, with $617 million invested year-to-date according to PitchBook data. These startups make at-home cooking more efficient by portioning out ingredients and investors want their share.

Following the success of the GrubHub Seamless IPO earlier this year, VCs are also looking at startups like Munchery, SpoonRocket and Sprig as the next phase of on-demand food delivery, with rotating menus from in-house chefs.

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"Venture investments in online food delivery services have taken off because the market is huge and busy consumers are willing to pay for the convenience," says Jason Wang, CEO of restaurant delivery service, Caviar, which was acquired by Square on Monday. "But providing premium food, fast delivery, and a large delivery area at an affordable price is critical and difficult to do."

Same-day grocery delivery is also taking flight, popularized by services like Instacart and Postmates, which both raised significant rounds of financing this year. Tech giants including Amazon and Google are making a big push to capitalize on the grocery delivery space as well. The woes of the likes of Webvan are now dotcom history.

Taking a page from shoe-of-the-month and other subscription services, monthly snack boxes have attracted the attention of Canaan Partners and SoftBank Capital, who invested $18 million in Naturebox earlier this year. Competitor Love With Food also raised a round from Dave McClure's 500 Startups.

Restaurants are reaping the benefits of venture capital as well. AOL co-founder Steve Case's Revolution team invested in DC-based salad chain, Sweetgreen. The Potbelly sandwich company that went public last year was the recipient of capital from Starbucks founder Howard Schultz's Maveron team.

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"Venture capital investors are attracted by recent large private equity acquisitions, successful IPOs from food companies, and strong valuations for publicly traded food stocks," says Sam Hamadeh, CEO of private capital research firm, PrivCo.

And then there's the category of re-engineering food altogether. Founders Fund-backed Hampton Creek thinks it has found a plant-based substitute for eggs and Beyond Meat has convinced investors like Kleiner Perkins that they have found a meat replacement.

"There's a huge opportunity to transform the industry and make convenient, healthier options available at more accessible price points," says Clara Sieg, partner at Revolution. "Food is a massive industry that is a part of everyone's day-to-day."

"People gotta eat," says Techstars CEO David Cohen. "If there's a bigger market, I don't know what it is."

Related: Will SpaceX Launch Texas's Aerospace Industry?

Katie Roof is a web reporter @FoxBusiness covering venture capital and technology companies.

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