Food is changing and VCs are showing an appetite for it


Greedy businessman eating banknotes symbolizing consumerism. Photo courtesy ©iStock/SKapl

As far as media dinners go, I attended one that was right up my alley last month.

Obvious Ventures held a dinner at State Bird Provisions restaurant in San Francisco so I and other journalists could meet the partners and the firm’s portfolio of healthy living investments, which includes Beyond Meat, Miyoko’s Kitchen, Urban Remedy, Lucid and Olly.

It was those first two companies I was jazzed to meet. Full disclosure: I’ve been a vegetarian since 1989 and a vegan for about the past six years.

Most vegans will tell you that fake meat products leave a lot to be desired. Some substitutes are just downright awful. So I wanted to hear what’s new in the world of alternative meats and dairies.

Beyond Meat was founded in 2009, and when I first heard of it about four years ago, the company was an outlier. Few alternative-food startups were raising venture capital.

It’s more common now. Kite Hill, the San Francisco maker of plant-based cheeses, yogurts and other dairy alternatives from nut milk, recently raised $18 million in a Series B funding from 301 INCGeneral Mills’ venture arm, and CAVU Venture Partners. The company has now raised $21 million in financing.

And Califia Farms, a maker of plant-based dairy and other food products, last year raised $50 million from Stripes Group.

So it’s not unusual to say that Beyond Meat, which makes plant-based meat substitutes, has since its founding raised $17 million from Obvious, Kleiner Perkins Caufield & Byers and other backers.

And now the Manhattan Beach, California, company has been test-marketing a meatless burger that is packed with protein and is so realistic looking that I may have a hard time taking a bite.

Miyoko’s Kitchen makes nut-based dairy alternatives, including artisan cheeses and a butter that should please any fan of the European-style churned cream.

Plus, founder Miyoko Schinner has the kind of narrative that makes journalists excited.

During the dinner, she told us that she proactively sent samples of her cheese to Obvious Corp co-founders Biz Stone, a vegan, and Ev Williams, a vegetarian and founder of Obvious Ventures. They liked it and soon after invested.

I checked in with Schinner last week. Her company, which was founded in 2014, is relocating to a larger facility in Petaluma, a move she hopes to complete this year.

Meanwhile, she’s raising a Series B in the range of $8 million to $10 million.

In each of the past three weeks, she says she’s fielded two or three calls from investors looking to join the round. She says it’s not just mission-focused VCs, like Obvious, but a large venture firm and some smaller family funds have reached out.

“We have a long list of VCs, private equity investors and angels to choose from,” Schinner said. “I’m confident we’ll close a successful Series B.”

The food sector has changed. Schinner says investors have researched the alternative food space, and they want to get in.

And no longer do founders like her have to send samples to entice investors. The money is searching for the alternative meat and dairy startup investments.

Take your pick!

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