- Alternative protein venture capital fund, Lever VC, closed its first fund with $23 million in committed capital and will target early stage plant- and cell-based protein, as well as alternative dairy companies for investment.
- Already, Lever VC has invested roughly $5 million in 10 companies, including Better Meat Co., Good Planet Foods, Mission Barns, The Good Spoon and TurtleTree Labs.
- The VC firm said it will continue to identify investment opportunities and remains open to additional investors until reaching final close. The Spoon reported that Lever’s new fund is planning to complete between 20 and 25 investments that range from $200,000 to $1 million.
This fund is formed by a team of investors that have made fortuitous bets on Beyond Meat, Impossible Foods, Memphis Meats and 40 other early stage alternative protein deals to the tune of $1.5 billion. In addition to Wall Street blockbusters like Beyond Meat, Lever VC Managing Partner Nick Cooney and Partner Lawrence Chu have taken a stake in Just, Aleph Farms and Kite Hill.
With a record of success under their belt and a desire to identify "trailblazing" alternative protein startups, the company told The Spoon they will work to identify early plant- and cell-based companies that have a "valuation that makes sense from a risk return perspective." For example, its recent investment in Better Meat Co. is looking to get the plant-based product to more major meat users.
This fund is investing in a space with growing consumer interest. Plant-based food outpaced general food sales growth by 35% during the pandemic, according to SPINS statistics for the 16 weeks ended April 19 analyzed by the Plant Based Foods Association. And pre-pandemic analysis found that the entire plant-based food market was worth $5 billion, with dollar sales up 29% during the previous two years.
That increased consumer demand has driven investment in the space. More than $1.1 billion has been invested in alternative proteins so far in 2020, according to a report published by FAIRR. The investment in the first half of this year is more than double the total 2019 investment in the category.
Big CPG companies are now actively working to integrate these alternative options into their portfolios either through M&A or by investing in startups that are offering popular products. Conagra Brands, Kerry Group, Nestlé, Saputo and Unilever all have teams dedicated to alternative protein.
Still, VC capital and investment remains a major driving force behind the growth of alternative products. Impossible Foods raked in $700 million in funding in the last six months, plant-based seafood company Good Catch hooked more than $32 million in funds since January and Memphis Meats raised $161 million in funding this year — a round that increased its total funding eight-fold.
The segment has become so lucrative that investors are looking to create entire platforms dedicated to the development of these products. The beginning of the year saw a $200 million investment from food industry veterans to launch the plant-based protein platform LiveKindly. Two VC firms also led an $80 million funding round to help Nature's Fynd — previously known as Sustainable Bioproducts — produce food from a fungus found living in a volcano. And in addition to Lever VC, there are already other funds investing exclusively in this space, like PowerPlant Ventures, Stray Dog Capital, VegInvest and Big Idea Ventures.