“The pace of change will never be slower than it is today. For us, it’s about understanding the market.” — Tom Mastrobuoni, Chief Financial Officer of Tyson Ventures
Registration for the Good Food Conference 2019 is officially open! Investing in early-stage companies is key to growing the plant-based and cell-based meat market sectors. Last year’s Good Food Conference hosted venture capitalists who are transforming the meat industry. Watch investors from Spark Capital, Future Ventures, Fifty Years, and Tyson Ventures discuss the future of food technology.
As moderator Elaine Watson from Food Navigator put it, the group of VCs was “here to talk about money, and specifically whether investing it in cell-based meat is a good idea.” (Spoiler: we think it is.)
It’s a great discussion! You should stick around and watch the whole panel, but if you’d prefer the highlights reel, here are some of our favorite comments:
Is funding cell-based meat a smart investment if characterized as high risk, high reward?
“Any of the food innovation space is a brilliant space to invest in,” says Maryanna Saenko, “because the market is enormous.” Saenko is a co-founder and partner at Future Ventures, which backs UPSIDE Foods and SpaceX. She was previously a partner at Khosla Ventures, an investor in Impossible Foods and JUST. Saenko explains that cell-based meat is high risk in that it takes a lot of money to innovate. So what she’s looking for is: “the technical innovations that allow the next type of funding to come in: the mezzanine financing, the private equity dollars, the basically cheaper dollars.” She continues, “We’re expensive dollars, right? Our early dollars in cost a fair amount of equity. And if we really want to see this industry grow, we need to find basically cheaper sources of capital, and that is really the shift of where the technology needs to take us.”
How do you see cell-based meat and plant-based meat respectively as investment opportunities?
“Food is food,” says Ela Madej simply about the difference between cell-based and plant-based meat. Madej is a founding partner of Fifty Years, an early investor of UPSIDE Foods. Consumers “will prioritize cheaper, healthier, and yummier options in the future. People need diversity, and consumers need a choice. We think there’s room for all those things to be made sustainably and in a more rational way.”
Tyson invested in these companies, why not hire top-notch biologists and set up the cell-based meat division in-house?
“Certain businesses do not incubate well in a corporate setting and disruptions in the market won’t work in a corporate R&D environment,” Tyson Ventures CFO Tom Mastrobuoni explains. “What we’ve decided to do is stand up with a ventures arm to invest in start-up companies and give them a safe space to fail forward. I think that’s crucial. We always tell people, Edison didn’t invent the lightbulb on the first try. At the end of the day, we want to deliver options to our customers.” Tyson Ventures has a stake in cell-based meat company UPSIDE Foods and was an investor in plant-based company Beyond Meat. Notably, since this conversation, Tyson has sold their stake in Beyond Meat and announced their own plant-based protein line.
When investing, will you vet all companies and pick the one you think is the winner? Or invest in a handful and spread your bets?
“Every firm does things differently,” says John Melas-Kyriazi, an early-stage investor with Spark Capital, the fund backing cell-based seafood company Wild Type. “At Spark, it’s a combination of bottoms up — meeting amazing entrepreneurs and falling in love with their work — and top-down, which is more thesis oriented.” Top-down entails mapping markets and “working with third parties like GFI to better understand technical risks.” He explains “investing in early-stage companies is definitely a combination of art and science. A lot of it has to do with finding a team you feel like has the capability of doing something special.”
How do you vet companies with completely new and emerging technology? There’s not a 1-800-cell-based meat number you can call…
“1-800-GFI” quickly counters Madej, eliciting a laugh from the crowd. She continues, “I think GFI has been an amazing resource. Out of all the investors in the room, I don’t think there’s anyone who ignored their reports.” To vet companies, Fifty Years starts at the beginning: with scientists and “portfolio founders” who know the technology.
All venture funds represented on stage, from entrepreneur-run Fifty Years to commerce giant Tyson Ventures, agree that plant-based and cell-based meat are both already movers and shakers in the industry. And they’re just going to keep on moving and shaking.
We hope you’ll join us at the Good Food Conference 2019 to hear the latest on these game-changing industries.