Plant-based investors launch new fund targeting alternative protein sector

18 Aug 2020 --- Lever venture capital (VC), a global alternative protein venture capital fund whose partners include investors in Beyond Meat, Impossible Foods, Memphis Meats and other key industry players, has completed the first close of Lever VC Fund I. The Fund, which is investing globally in early stage plant-based and cell-cultivated meat and dairy companies, has already built a portfolio of ten alternative protein start-ups around the world. The Fund currently has US$23 million in capital commitments amid increasing demand for sustainable and humane alternatives to traditionally animal-derived protein.

“The alternative protein market is continuing to grow quickly and with our proven record of returns in the sector, as well as preeminent deal flow across the North America, Europe, Asia and beyond, Lever VC is positioned to deliver value to investors looking for financial or strategic exposure to alternative protein,” says Lawrence Chu, Partner and Founder of Lever VC GP Venture Smart Financial Holdings Limited. 

Lever VC has been investing in the alternative protein sector since 2015, with investments in JUST, Aleph Farms, Kite Hill and other leading plant-based and cultivated meat and dairy companies. Chu has also deployed over US$450 million in private equity investments in conventional animal protein companies. 

Investment in alternative protein companies has already surpassed 2019’s record US$824 million in Q1 2020.Cell-cultured proteins are also on the radar. For example, the Lever VC Fund I portfolio includes TurtleTree Labs, the first company in the world producing cow’s milk and human breast milk from cell cultivation. 

Exceeding expectations
The Fund is confident the alternative protein sector will continue to grow quickly due to increasing consumer interest in health, food safety and sustainability. 

“We decided to invest in alternative protein in 2018 and started approaching a few venture capitalists,” said Benny Pei, Lever VC Partner and Chief Investment Officer of Lever VC GP DFP Capital.

Most recently, Beyond Meat released its Q2 earnings report, beating investors’ expectations on revenue and matched on earnings per share. The key to the company’s success has been a rapid expansion in grocery sales. In July, the company announced a partnership with Alibaba to boost its retail presence. 

Other companies introducing plant-based protein options such as Tyson Foods, Kellogg, and Bunge are up double digits as consumers look for most plant-based alternatives. 

Growing investments for plant-basedIn April, Cargill partnered with Yum China to launch plant-based KFC fried chicken across China for a limited test period. 
Investment in alternative protein companies is growing at a rapid pace, surpassing 2019’s record US$824 million, with US$930 million invested in Q1 2020 alone, according to the Good Food Institute.

In April, agri-food supplier Cargill partnered with fast food conglomerate Yum China to launch plant-based KFC fried chicken across China for a limited test period. 

Last year, the largest meat producer in the US, Tyson Foods unveiled its own alternative protein products. Through the newly dubbed “Raised & Rooted” brand, Tyson creates plant-based and blended food products, including plant-based nuggets, as well as blended burgers that combine actual beef and plants. Raised & Rooted nuggets are made from a blend of pea protein isolate and other plant ingredients and contain 5g of fiber and omega 3s.|

Last September, one of the world’s biggest grain traders, Bunge, disclosed its own 1.6 percent stake in Beyond Meat. 

In March, through its subsidiary, Bunge Loders Croklaan, the company launched a new portfolio of products designed to replicate the taste, texture and cooking experience of meat. These products leverage Bunge’s supply of high-stability sunflower, canola, coconut and palm fruit oils. The oils bring to the table flavor and aroma release, specialty fat fractions, and shortenings for juiciness and flakes for marbling, while lecithin helps enhance surface browning to improve visual appeal.

Edited by Missy Green