Making Healthy Nutrition as Addictive as Sugar

The modern world has a serious problem with sugar.

The average American consumes more than 129 pounds of the stuff each year, according to the USDA, more than double what we ate two generations ago. And, unlike in previous decades when most sweeteners came from cane and beet sugars, today the vast majority are derived from high-fructose corn syrup, which brings with it unique new health risks.

It’s in nearly everything that we eat, not just sweets. Nearly 75% of all packaged foods and beverages in the U.S. contain some form of sweetener, according to a recent study in The Lancet journal of diabetes and endocrinology, making it a more than $100 billion market. Every time we eat a doughnut, drink a diet soda or pour a jar of pasta sauce over our linguine, we’re increasing the sugar in our diet, adding up to almost three times the recommended daily amount on average.

Americans spend about $1.7 trillion a year on food, and yet our diets are carb and sugar heavy in ways that are not good for us. Too many people are overweight, unhealthy, costing our healthcare system billions.

Why? Carbs are cheap, and sugar is addictive. Lab rats prefer it over cocaine. Put sugar in a food product and consumers are more likely to eat and buy more.

But sugar has more than a few problems. It has been linked to mood swings and depression, causes weight gain and increases the risk of obesity, it increases the risk of heart disease even if it does not make you gain weight and it can interfere with proper immune function. Cancer cells love to eat the stuff. It accelerates aging and causes tooth decay.

Sugar has been called a “major contributor” to several health problems that plague populations in America, Canada, Mexico, and elsewhere, including obesity, Type-2 diabetes, and heart disease. More than 84 million Americans — 1 in 3 U.S. adults — today can be classified as having “pre-diabetes,” where blood sugar levels are elevated above normal, while another 30 million Americans suffer from Type 2 diabetes. (And 25% of them don’t even know it.) More than 20,000 U.S. youth under the age of 20 had Type 2 diabetes in 2009, with more than 5,000 new cases in this group being diagnosed yearly, according to the Centers for Disease Control.

High blood sugar associated with these conditions can cause a range of serious health problems, including heart disease, vision loss, amputation, kidney disease and more.

In a world where sugar is cheap, accessible and plentiful, diseases such as diabetes and obesity have exploded into full-blown epidemics, accounting for 10% of all health spending in the U.S. as of 2016.

As David Turner, global food and drink analyst at market research firm Mintel, said: “Sugar is the new tobacco.”

Innovating healthy alternatives

The race is on to create a proper sugar substitute that tastes good, avoids the health pitfalls of other sweeteners, and can claim to be all-natural.

In 2016, consumer packaged goods companies reformulated 20% of their food products to reduce ingredients such as sugar and salt, and Nestlé, PepsiCo, and Mars have all announced plans to decrease the sugar content of their food products in the future. Coca-Cola is even offering a $1 million prize to whoever can find a new, zero-calorie sugar substitute for their sodas.

It’s not going to be easy, though. Scientists have been working for decades to solve this problem with little success. (For example, Stevia, the greatest recent success story in sweeteners that spawned a $4 billion industry, still doesn’t taste very good.)

But we can no longer ignore the connection between diet and poor health.

To impact public health at a large scale and reduce the cost of healthcare, we need to make good nutrition more addictive than the alternatives. That much is clear.

And that’s precisely what iSelect is working on. The food system is ripe for disruption from improved nutritional value to better resource efficiency and better cost controls. Food is Health! Gone are the days when big, industry-shaping innovations emerged from corporate R&D departments. With the recent mega-mergers in food and agriculture, the market has changed to allow entrepreneurship to set the pace for food and agricultural innovation.

And that’s just the start.

Public health is an all-encompassing issue that includes everything from healthcare companies to food scientists, to farmers and more. iSelect is investing in the entrepreneurs who are making these innovations happen, including:

Nix — Solving hydration

Nix is developing a wearable, single-use patch that monitors a person’s hydration level in real-time without the need for a power source or companion device/app. Using a proprietary hydrogel developed at Harvard University, Nix’s biosensor detects changes in an individual’s sweat as he or she dehydrates and rehydrates, including the level of electrolyte losses, indicating when to drink, what to drink, and how much to drink. Dehydration is particularly problematic among athletes, military personnel, laborers, and the elderly, causing a reduction in performance and an increase in hospitalization.

Gila Therapeutics — Streamlining weight loss

Gila is developing a treatment for obesity using naturally occurring hormones known to induce satiety, leading to weight loss. Gila is developing formulations to be applied to the tongue before meals, which have successfully induced satiety in animal testing without causing the nausea-like symptoms associated with injectable and other formulations.

Cofactor Genomics — Enabling personalized medicine

Cofactor Genomics uses proprietary RNA sequencing technology and machine learning algorithms to diagnose disease. RNA serves as a real-time barometer of a person’s health, as opposed to DNA which remains little changed throughout a person’s life and whose analysis is estimated to diagnose less than 5% of diseases. Compared to current methods, Cofactor’s patent-pending RNA isolation technology allows the Company to detect specific RNA molecules from low-quality tissue samples, making 100x more patient specimens available for analysis.

These are just four examples, but the fact remains that iSelect is dedicated to investing in the future of public health and supporting the innovators who are solving society’s big problems.

Learn more about the iSelect portfolio.

Consideration

With 2021 well underway and with public markets still strong, we think it is an important time to highlight some of the key private market, venture investment themes that iSelect fund has identified for the year. We believe technologies transforming the Agriculture, Food and Wellness markets will flourish, with a focus on four areas: technologies that enable better food choices to drive better health outcomes, technologies that drive better, more profitable farm operations, technologies that drive the Consumerization of Healthcare, and biome-based treatment technologies. At iSelect, we invest for impact AND performance. We offer qualified investors access to emerging growth companies through our national venture capital strategy. Our unique structure allows our investors to continue to invest in these companies as they develop.

Timing

Why is now the right time for venture? The answer is that now is not explicitly the right time. Venture is something we need in our economy at all times. Now is not better than any other particular time. The question is, why ever stop? When we look at the challenges we’re facing in food and healthcare the reality is there is someone, somewhere who has an insight about how to build a product that will solve those problems. And if they put the right resources to it, they will succeed. As long as we need new technology to make life better or make our lives more enjoyable, we need venture capital to help fuel those entrepreneurs.

What is iSelect as a product?

iSelect is a very unique product, but when you break it into its parts it’s fairly easy to understand. On the front end we’re a traditional venture capital fund. We have a diligence process. We have an investment process. We have categories of industries where we have focus and real expertise, and we invest in companies in those areas that meet requirements for the fund. On the back end we’re unique in that we don’t raise a large amount of capital at one time and deploy it over the life of our fund. Each deal that we bring onto the fund, our investors have to prove and determine to invest in that deal. We have to constantly prove our diligence standards. It’s accessible, transparent and easy for investors to come in and see our comprehensive process.

What is the ideal iSelect company?

We are looking for founders that are passionate and we want the problem they’re trying to solve to be big, real, and painful. We want the solution to be revolutionary and we want our capital to be able to help them solve that problem. We want to know that they have customers involved and that the solution they’ve come up with actually meets those customers’ and market needs. And we want the team to be capital efficient with the money they’re spending.

What does the ideal iSelect company look like?

We’re looking for a company that has an opportunity to have a 10x return to our investment or greater in a period of three to seven years. What excites us at iSelect are companies that are solving big problems. We want companies that are going to be the Monsantos of the future. Not just in the size and the scope, but the impact they have on people’s lives. We want to create positive impacts on people’s lives, so we invest in areas like agricultural production and areas like producing healthy foods for our kids. They are problems that impact real people’s lives on a daily basis. That’s what we’re trying to do at iSelect. We’re trying to solve the big problems out there. Find ways to bring capital to the entrepreneurs who are the real heroes out there getting up every morning, beating away at these things that are problems that you and me and everyone else faces in their everyday lives.

What is iSelect?

iSelect is a venture capital firm. What that means is we look at hundreds and hundreds of different companies and we apply tough diligence standards to each of them, looking at whether the team has a good plan for growing the business, whether the team is qualified and credible, and more. We do that to resolve the few who provide the best opportunities for investors. And then iSelect takes that smaller set of investments and goes to investors who are interested in venture capital and provides a way for them to invest in these companies, either individually or all at once. We co-invest alongside other venture capitalists. We source transactions through to an exit where the company would become public or get bought. And we manage that whole investment process on behalf of our investors.

Solving the Public Health Crisis by Making Healthy Nutrition as Addictive as Sugar