California-based Impossible Foods has raised $114 million in convertible note financing provided by Singapore-backed Temasek, and Sailing Capital, a Shanghai and Hong Kong-based global private equity firm with a focus on investments in cutting-edge companies in consumer goods, technology, and healthcare. Sailing Capital not only joins Temasek, but previous and repeat investors Open Philanthropy Project, Bill Gates, Horizons Ventures, Google Ventures, UBS, and Viking Global Investors. The company’s first venture capital seed provider was Khosla Ventures, which also then went on to participate in multiple follow-on rounds.
This capital brings Impossible Foods’ total funding to approximately $396 million since its founding and adds to the $214 million the company raised over the past 18 months.
Founded in 2011 by Patrick Brown – a professor of biochemistry at Stanford for 25 years – and co-founder of Kite Hill, a nut milk and cheese product company, Impossible Foods produces a line of next generation meat and cheese products made solely from plants that contain no cholesterol, hormones, or antibiotics. The company’s flagship product is a plant-based, meatless burger that contains soy leghemoglobin – a protein that carries “heme”, an iron-rich molecule that is naturally present in all animals and plants that creates a plant-based burger that “bleeds” like traditional beef.
In August of last year the company announced it had raised $75 million in a round led by Singapore’s sovereign wealth fund Temasek, and including Open Philanthropy Project, Bill Gates, Khosla Ventures, and Horizon Ventures. This funding built upon previous rounds including $108 million raised in October 2015 led by UBS and including Viking Global Investors, and previous investors, Khosla Ventures, Microsoft founder Bill Gates, and Horizons Ventures, the investment arm for Hong Kong businessman, Li Ka-shing.
“Our world-class investors enable us to ramp up rapidly and accomplish our urgent mission,” said Impossible Foods’ CEO and Founder Dr. Patrick O. Brown. “We are proud of the progress we’ve made — but frankly there are still millions of restaurants and billions of people who want meat. We won’t stop until the global food system is truly sustainable.”
Sustaining Progress
The main driver and mission behind Impossible Foods, and for many investors that are making commitments to the plant-based food segment, is the development of foods using modern science and technology that can sustainably meet the needs of an expanding global population with a much smaller environmental footprint than meat from animals.
The deepening of the connection between consumers and their food supply chains, along with a rising popularity of veganism, concerns over animal rights, and awareness around the hormones, antibiotic usage, and unsustainability inherent in the global livestock industry have pushed many people in Western markets to look toward alternative ways to get protein into their diet.
Global protein consumption is expected to climb at a compounded annual growth rate (CAGR) of 1.7 percent, reaching 943 million tons by 2054, according to Lux Research. On a global scale, greenhouse gas emissions generated by the animal agriculture industry in place to meet this demand account for 14.5 percent of all man-made greenhouse gas emissions – more than the worldwide transportation sector.
Amid these daunting statistics, the Impossible Burger debuted in July 2016 at Chef David Chang’s Momofuku Nishi restaurant in Manhattan. Production of the Impossible Burger uses 75 percent less water and 95 percent less land to produce than traditional beef and produces 87 percent fewer greenhouse gases, and since this launch, it is now being served in more than 1,000 restaurants across the U.S. from Hawaii to Maine as consumers realize its ecological, environmental, and sociological benefits as well as its superior taste.
Eye on Asia
Asia is quickly becoming a focus of companies in the plant-based protein sector due to its massive population and climbing consumption rate for meat. Overall, Asia accounts for 44 percent of the total global demand for meat, and China alone accounts for half of all the pork and one quarter of all the meat consumed in the world. Converting this demand for protein to plant-based sources represents a huge market potential.
With this in mind, Impossible Foods will be launching their Impossible Burger in Asia later this spring.
“The company’s mission is to completely replace animals in the food system by 2035,” Brown told Tech Crunch. “The only way to do it is to do a better job than any animal at producing the most nutritious, delicious, affordable and versatile foods.”
Impossible Foods is not the only plant-based player looking to the Asia market for growth and return on investment.
Only days ago, three impact investment companies: Dao Ventures, Moonspire Social Ventures, and New Crop Capital announced they have partnered to launch Dao Foods International Inc., (DFI) a collaborative effort to meet China’s rising demand for protein through plant-based and lab-cultured meat.
Capitalizing upon expertise and relationships already in place in North America and China, including the nonprofit Good Food Institute, DFI is aiming to disrupt the global meat, egg, and dairy markets with the goal of alleviating the environmental and societal impacts of meat production as consumption in China continues to soar.
“With rapid rising incomes and increasing meat consumption in China, our aim is to introduce alternative products into the China market to reduce the consumer demand for animal products from the traditional livestock industry, which has had growing negative environmental, food safety and health impact,” said Albert Tseng, co-founder of Dao Foods and managing director of Moonspire Social Ventures.
-Lynda Kiernan
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