Israeli foodtech startup Blue Tree secured $2.26 million, including from French major Sucden, despite having to close its Kiryat Shmona facility due to Hezbollah missile strikes.
Leading the round was OurCrowd, with participation from Sucden Ventures, the venture capital division of Group Sucres et Denrées, a French enterprise that specialises in plant and crop sciences, innovative ingredients, and alternative proteins.
The U.S. Food and Drug Administration (FDA) has standards for food and food contact materials, and Blue Tree has declared that it has met these requirements by self-affirming the FDA food safe status for its unique sugar reduction technology and system.
Didier Toubia, the co-founder and CEO of the firm Aleph Farms that produces farmed meat, created Blue Tree in 2020. With the use of sophisticated separation procedures, the company’s technology can extract sugar molecules that are naturally present in drinks like milk, beer, and juices.
This method lowers sugar levels while maintaining texture, aroma, and other nutrients. The system offered by the company includes design, integration, and maintenance services and is made to fit easily into current production lines. Beverage producers can now provide healthier options without compromising flavour thanks to this innovation.
“On Oct 7th, our primary focus was on the safety of our team, as many faced reserve duty and had to evacuate their homes along with their families,” said Michael Gordon, Blue Tree CEO, “and we quickly adapted to the situation with a reduced team but heightened determination.” Discussing the company’s resilience, he continued, stating that “we secured a new location and continued with both fundraising and product development. During this period, Blue Tree strategically expanded its solution to encompass additional categories. Although we remain displaced from the northern Israeli AgTech valley in the Galilee where we graduated from Israel’s Fresh Start incubator in June 2022, our commitment to the region endures. For four years, we have worked with local industry leaders, developing a long-term vision. We are proud to secure funding during these challenging times from key partners, enabling us to reach our audience this year. This demonstrates our commitment to innovation and our goal of improving healthy beverage choices. With this additional funding, we aim to make a significant impact worldwide, one sugar molecule at a time.”
The purchase of Blue Tree is one of the first big investments made in the Israeli food technology industry during a period of weakness that began before October 7 and got worse in the following quarters.
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Pitchbook FoodTech review states that Q1 2024 saw a slight decline in VC investment activity globally in the food tech sector. However, Israel saw a significant decline as well, with just $51 million invested in nine deals in the sector, a 90% decrease from Q1 2022 when $577 million was invested in 19 deals. With $1.9 billion invested over the course of three years, Israel ranked second only to the United States in terms of FoodTech investment from 2020 to 2023.
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Nevertheless, the last year has seen a significant reduction, which is indicative of a general decline in foreign investment in Israel.
About Blue Tree
Blue Tree develops a sugar reduction platform for drinks industry applications. It removes sugars from natural liquids without additions. The drink should be kept the same except for sugar. It must be economically viable for large-scale production.
