The alternative protein space has recently been an area of considerable investing activity and increased interest. These notable food financings, from Series A to IPO, include Memphis Meats, Sustainable Bioproducts, Motif Ingredients, Beyond Meat, and Impossible Foods. There was also the earlier-stage financing of NovoNutrients, which is developing alternative proteins for animal nutrition, making feed ingredients primarily from industrial waste emissions of carbon dioxide (details in Inc. Magazine).Here, we recount this acceleration and intensification of capital to the aforementioned most promising companies that are developing alternative proteins. Beyond looking at its most recent financing, we answer two questions about each company:
Note that one group can be found on the cap tables of all five food-oriented companies on the list: Bill Gates / affiliated Breakthrough Energy Ventures. Breakthrough is a climate-focused technology fund backed by a roster of billionaires, with Gates usually named first, along with Alibaba’s Jack Ma, SoftBank Group’s Masayoshi Son, Amazon’s Jeff Bezos, and several others. The sixth company, NovoNutrients, is singular in several respects, as the only one: with a feed-focus, founded after 2015, and without an investment from Breakthrough, at least not yet. NovoNutrients’s investors include Joyance, Purple Orange Ventures, and the billion dollar Grantham Environmental Trust.Key Alternative Protein Financings in Meat/Seafood Replacement and FeedThis table compares and details these key alternative protein financings from 2018 and, mainly, 2019. Quotations come from each company’s websites and press releases, except where noted.
The first observation is that alternative protein companies from Sustainable Bioproducts (6 years old at its March 2019 Series A, including a pivot from biofuels to nutrients) to Beyond Meat (10 years of age at its May 2019 IPO) are achieving substantial rounds and valuations despite both capital intensity much greater than software development and various risks unfamiliar to the typical venture investor.Secondly, within alternative protein, the food and the feed side bear strong similarities in terms of market size, in which new technologies are being put to use, and sustainability. Both sides have witnessed bets on the markets, with feed being gigantic, but meat and seafood replacement still being three times larger. These also tend to be technology bets, notably on next generation fermentation and synthetic biology. Finally, they are sustainability bets with an eye towards reversing climate change and reducing use of water and arable land. This decade’s industrial, biological technologies are enabling alternative protein to emerge as an increasingly dominant part of the diets of all animals, from a sea bass raised in the crystal blue Mediterranean waters of Greece to a teenager at the drive through of the local Burger King.Learn more about NovoNutrients here. The replacements retail market size is several times larger than the cited first sale value of $1.4T, which is measured at the producer level.Originally published on https://www.joyancepartners.com/blog/2019/5/15/the-alternative-protein-boom-from-beyond-burgers-to-shrimp-feed