Turns out you have to get some green to go plant based.
PowerPlant Ventures announced today that it has closed an oversubscribed fund to invest in plant-based food technology companies. The fund, the firm’s second, totals $165 million dollars and has already invested in two companies: wellness shots startup Vive Organic, and plant-based nutrition company Your Super.
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“[We are] about businesses that are more plant-centric, and advancing more of a plant-centric world,” he said. The “inhumane and unsustainable” reality of modern food management can only be solved through plant-centric companies, he said.
The firm plans to lead or co-lead Series A and Series B rounds in the space with check size ranging between $4 million to $8 million dollars. He added that the firm will reserve money for follow-on rounds. This new found is almost four times larger than PowerPlant’s first fund, which was $42 million dollars and has been full deployed.
Previously, PowerPlant invested in recently-public Beyond Meat, as well as startups Thrive Market, Veggie Grill, among others. The firm describes itself as a growth equity firm that provides capital, guidance and operating expertise to “disruptive plant-centric brands.”
The alternative meat space has been sizzling for quite some time now. In May, Impossible Foods raised $300 million in funding for its plant-based burger. And, as mentioned, Beyond Meat had a strong debut as a public company, and is currently valued at $12 billion, according to Yahoo Finance. In Boston, a city known for its biotech scene, the largest recent funding rounds went to food tech companies, not life science startups.
Even products drawn from animals, like milk for example, are undergoing innovation from upstarts across the world. Oat milk, for example, is being branded a cow milk alternative. Sweden’s Oatly, one of the more popular oat milk brands, caught on in the United States and is now eyeing the Chinese market. Oatly, at one point was so high in demand that its faced shortages. Other brands tackling oat milk include Thrive Market and Blue Crate.
One almond milk startup, New Barn Organics, said it isn’t rushing into starting a line of oat milk due to supply shortages. With an uptick of interest comes a reminder that new territory has room for risk.
PowerPlant’s Gluck says there’s a lot of funds that are writing smaller checks in early stage food companies, like Blueberry Ventures, and Nebari Ventures. And there are larger funds too like Encore Capital, and VMG. He sees PowerPlant Ventures “playing at a stage where there is a lack of capital for Series A and B, and add value.”
I’ll leave you with an anecdote. I’m the token vegetarian among carnivorous friends and family, often. But, time and time again, when they try Impossible Meat whether in dumplings or burger form, there’s a wince, and soon after, a white flag that “it’s not so bad after all.”
I see alternative protein popping up in a range of establishments from fancy restaurants to the Burger King down the street. So it makes sense that firms like PowerPlant are there on the sidelines to capitalize on the potential of changing taste buds.
Illustration: Li-Anne Dias