May 14, 2019

Directly on the heels of Beyond Meat’s record-setting IPO, Impossible Foods announced its closing of a $300 million Series E.  The high-profile round was led by existing investors Temasek and Horizon Ventures, with an array of individual investors from the public sphere also participating, including, JayZ, Trevor Noah, Jay Brown, Katy Perry, Serena Williams, Jaden Smith, Zedd, will.i.am, Paul George, Kirk Cousins, Alexis Ohanian, Ruby Rose, Questlove, and Phil Rosenthal.

Additional institutional investors backing the company include Google Ventures, Viking Global Investors, UBS, Sailing Capital, and Open Philanthropy Project.

The majority of the capital from this round, which brings the company’s total funding to $750 million and its valuation to $2 billion, will be used to fund a massive scaling effort on behalf of the company to meet “unprecedented demand”.

Founded in 2011 by Dr. Patrick O. Brown, a biochemistry professor with Stanford and former pediatrician, Impossible Foods uses modern technology to make meat from plants, and in the process of sustainably feeding a growing population, is able to do its part to restore natural ecosystems.

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 lack of sustainability 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.

Consumers are not the only body driving the category.  At the end of September 2016, a group of 40 institutional investors with a combined valuation of $1.25 trillion called for greater adoption of alternative protein sources including plants, insects, algae, nuts, seeds and grains, and lab-cultured meats. In the treatise, “The Future of Food: The Investment Case for a Protein Shake Up” published by the Farm Animal Investment Risk and Return (FAIRR) initiative, the group claims that over-reliance on livestock production to feed a growing global population would be unsustainable and would “lead a financial, social, and environmental crisis”.

As the plant-based protein category goes from strength to strength, so does Impossible Foods. The company’s Impossible Burger is sold at about 7,000 U.S. locations, and in April of this year, Burger King announced its plans to add the Impossible Burger, as the Impossible Whopper, to its menus nationwide by the end of this year.  Other major outlets signing on to include the Impossible Burger in their offerings include Red Robin, White Castle, and Disney theme parks, while a retail launch is in the pipeline for later this year.

“The newest Impossible Burger delivers everything that matters to hard-core meat lovers, including taste, nutrition and versatility,” said Impossible Foods’ CEO and founder Dr. Patrick O. Brown in January of this year. “This is the plant-based meat that will eliminate the need for animals in the food chain and make the global food system sustainable.”

Company CFO David Lee told Food Dive that the company still has to achieve vast growth to be able to meet market demand, saying, “We’re stretched and need to add capacity to supply the growing demand. There is no horizon where I think our growth takes a break. We’ll be continuing to expand for some time. We have a long way to go before we’re anywhere close to reaching (a saturation) point.”

But, do plans for the company include an IPO, such as the one recently carried out by its rival Beyond Meat? Impossible Foods is certainly keeping its options open.

“We’re not announcing an IPO today, but we’re certainly not eliminating any possible way for us to be successful in business,” said Lee. “Nothing is off the table.”

~ Lynda Kiernan