- Companies that provide vegan substitutes to animal-originating staples or put a healthy or trendy spin on traditional products are at the top of market firm CB Insight's list of the 15 food startups with the most venture capital funding.
- The top company on the list, with $240 million in disclosed VC funding, is vegan mayo and spreads company Hampton Creek. The company has found itself surrounded by controversy in recent months, according to an article in Project NOSH, but it has raised almost $50 million more than its nearest competitor.
- In addition to Hampton Creek, other plant-based protein startups on the list include Impossible Foods, Califia Farms, Ripple Foods and Beyond Meat. The #2 company on the list, Suja Life, is one of eight juice or energy drink startups.
Considering two of the hottest areas in food right now are plant-based proteins and healthier drinks, it's not surprising that these two categories are leading the pack in VC dollars. The companies at the top of the list are either at many mainstream retail stores — like Hampton Creek, which is sold in 20,000 locations nationwide — or they have backing from major manufacturers. Suja Life counts Coca-Cola and Boulder Brands among its funders, while Tyson owns a 5% stake in Beyond Meat.
Why are these companies attractive to venture capitalists? Not only are they trendy, but analysts have said they resonate with consumers on many levels.
In a previous interview, CircleUp Business Operations Manager Zach Grannis told Food Dive the plant-based category is "where the attributes of being fresh and organic are rooted in the authenticity of the ingredients." With fresh, organic and authenticity ranking as some of the top consumer desires, investments in plant-based proteins can help VC firms get more for their investments.
Cold-pressed juices also meet some of these consumer desires. With cold-pressing technology, the produce used to make the juice can be more natural and authentic. This increases the nutrition quotient of the product, making both consumers and investors see the product as one where shoppers can easily get the health value they're looking for in a tasty and convenient package.
While many of today's venture capitalists are primarily looking to invest in products that can stand the test of time, most of the items on this list make the cut. Plant-based proteins — especially items such as meticulously crafted non-meat burgers and almond and pea milks — will only grow in popularity as consumers get interested in the health benefits and their curiosity builds.
Some of the other top funded companies, like meal substitute Soylent and açai product producer Sambazon, may end up being more like flashes in the pan with the type of products that consumers may not be able to find five years in the future. However, these products are interesting and generate consistent buzz, making them worthy of their investments.