- Plant-based food company Rebellyous Foods raised $6 million in Series A funding co-led by Clear Current Capital, Fifty Years and Liquid 2 Ventures. Other funders include Vulcan Capital, the investment arm of Vulcan Inc., which was founded by Microsoft co-founder and philanthropist Paul Allen.
- Rebellyous will use the funds to hire equipment and mechanical engineers at its Seattle research facility, expand product development to broaden its portfolio and develop equipment to make its products faster, cheaper and better quality.
- Rebellyous Founder and CEO Christie Lagally told Food Dive that investors remain attracted to companies like her business despite the existing market turmoil because many of the same issues like climate change or human health that are important to consumers will remain top-of-mind after the current pandemic ends.
As the novel coronavirus spreads throughout the United States, there could be the perception that small startups looking to raise capital would find it difficult as businesses close and millions of Americans lose their jobs. But Rebellyous' ability to raise $6 million from investors, including the co-founder of Microsoft, is indicative of the fact that investing in startups hasn't dried up if the business has a promising upward trajectory and finds itself positioned in a fast-growing industry.
Rebellyous, which makes its plant-based chicken products from wheat, soy, sunflower oil and other ingredients, is in a rapidly expanding plant-based industry where replicating the taste, texture and appearance of meat, poultry and seafood is the goal. Lagally, a former Boeing engineer, told Food Dive about $3 million of the money being raised will go toward research and development on prototype equipment to make plant-based meat faster, higher quality and cheaper.
Currently, she estimated chicken nuggets cost between $2.50 and $3.50 a pound, while Rebellyous is close to $4 to $5 a pound. To attract the coveted meat-loving person who is looking to curtail consumption of animal-based products, price parity is one of the major factors that will convince more of them to switch to products like Rebellyous.
Lagally said the company has been working on its Series A funding, a process she described as "a heavy lift" since late 2019. Rebellyous, she said, remains attractive to investors because it addresses issues like climate change, large-scale animal production and even the risks that come to the food supply during a pandemic such as the ongoing coronavirus.
"I think the forward-lookingness of our investors is that they understand that the links between what is good for the world and what is good for investors is more linear than it's ever been before," Lagally said. "And I think this pandemic just blows that whole concept up ... It makes it as clear as day that if we ignore issues like the impacts of future pandemics, if we ignore the impacts of climate change, all we see is destruction to our economy and losses to our companies."
For now, Rebellyous serves schools, hospitals, corporate cafeterias and restaurants, but has plans to start pivoting to retail beginning with an announcement in the coming weeks. The challenge for Rebellyous is that the Seattle-based company is in competition with countless other businesses like Impossible Foods and Beyond Meat that are in the plant-based meat sector.
As more meat-loving consumers flock to foods made from plants amid a push to eat healthier and help the environment, this also has attracted upstarts and big-name players such as Nestlé, Tyson Foods, Perdue, Hormel Foods and Conagra Brands into the space, or pushed them to make their existing offerings taste even more like the real thing.
Rebellyous and other smaller companies will not only need the right taste, texture, price and appearance to compete with these heavy hitters, but the financial muscle to market and promote their foods to consumers suddenly inundated with many quality plant-based options to chose from. With the U.S. and global economy in turmoil currently, companies like Rebellyous are smart to take advantage of funding when they find the right opportunity to better position themselves for the future.