Venture Capital Floods Into Foodtech

September 28, 2020

From FT, by Miles Kruppa

Growing consumer interest in sustainable food has not escaped early-stage investors.

When Samir Kaul made the first investment in Impossible Foods, he had one condition for the plant-based meat company’s founder Pat Brown: that he give up his tenured professorship at Stanford University or forgo the chance at funding.

Mr Brown agreed, and Mr Kaul made an initial commitment of a few million dollars, making his venture firm, Khosla Ventures, a significant partner in the start-up.  “I was getting laughed out of town when I said I was going to invest in a plant-based burger in 2011,” Mr Kaul said. “I think people really thought I had lost it.”

Less than a decade later, Impossible is valued at more than $4bn and has its animal-free meat products in Burger King and Starbucks. Beyond Meat — a close competitor, which also raised its first round of venture capital in 2011 — has quintupled in value since an initial public offering last year and now commands an $9.6bn market capitalisation.

The soaring valuations of plant-based meat companies illustrate why more venture capitalists are turning their attention to the food sector: fewer are larger or forecast bigger increases in demand.

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