October 20, 2020

By Lynda Kiernan, Global AgInvesting Media

Less than one year after closing an impressive A$35 million (US$24 million) Series A, Aussie vegan meat brand v2food has closed on more significant funding. 

New investors ABC World Asia Altitude Partners, China Renaissance, Esenagro, Novel Investments, and Temasek have joined founding investment partner Main Sequence Ventures in a A$77 million (US$55 million) Series B that is the largest round to-date raised in Australia’s plant-based meat sector, and which brings total funding to-date for the company to $113 million. 

At more than double the size of its predecessor Series A, the capital from this round will be used by the company to complete its production facility in Wodonga, to expand its team, and to continue to launch new products into new markets, with a particular eye on Asia.

Launched in Sydney in October 2019, v2food (the name alluding to a version 2 food system) is an innovative partnership between Australia’s national science agency CSIRO’s Innovation Fund, managed by Sequence Ventures, a unit of the Australian government’s National Innovation and Science Agenda, and Competitive Foods Australia, the parent company of fast food brand, Hungry Jack’s.

Under the leadership of Nick Hazell, former research director of Masterfoods and PepsiCo, v2food is a sustainable, plant-based meat company with a mission to make delicious alternative meat accessible to all Australians by disrupting the country’s nascent plant-based category.

“There is a big shortfall between the amount of meat we produce today and the amount needed to feed the growing global population. There will be nearly 10 billion people on Earth by 2050,” said Nick Hazell, founder and CEO, v2food in December 2019. “It’s imperative that we scale quickly because these global issues need immediate solutions.”

Through a partnership with Rebel Whopper, the startup launched its first product onto the Australian market in November 2019, a plant-based burger developed with CSIRO that looks like, tastes, like, and cooks like beef, and which will be offered as a plant-based alternative to Hungry Jack’s traditional Whopper.

Knowing that consumers will only adopt plant-based foods if they have alternatives available that are convenient, tasty, and cost-equivalent, v2food uses protein extracted from legumes to create “mince” that looks, tastes, and cooks like quality meat, according to a statement. 

“We’ve drawn upon the best food, nutrition and sustainability science from CSIRO to develop a sustainable and nutritious product, with an unmatched texture and flavor,” said Hazell.

By February 2020 v2food began supplying its Rebel Whopper to Burger King New Zealand, and today its products are available in thousands of outlets across Australia. In August of this year the company’s line rolled out in 61 Drakes supermarkets across South Australia and Queensland, and the following month the company reached a milestone when it launched v2mince and v2burgers in more than 600 Woolworths outlets – the largest supermarket chain in the country. V2food is also being included in meal kit services Marley Spoon and Dinnerly, as well as quick service restaurants such as Soul Burger and Burger Urge.

Even given this rapid-fire success, v2food has global goals.

“This funding is a pivotal step towards v2food’s goal of transforming the way the world produces food,” said Hazell. “It’s imperative that we continue to scale quickly because this global issue needs an immediate solution.”

“As we enter our next phase of growth,” continued Hazell, “we are grateful to have the support of world-renowned investors who share our urgent mission of solving the global food challenge. v2food has had a global view since our founding, and this investment will help us establish our business in Asia, Europe and the rest of the world.”

Hazell told The Age that Asia in particular was a key market for the company to conquer, saying, “We’re insanely ambitious and our focus really now is on opening up the Asian markets.” And v2food is not alone. 

Waves of disease decimating China’s hog herd (African swine fever led to the loss of 180 million of China’s hogs last year) followed by the COVID-19 pandemic have led consumers in the world’s top pork market to question their dietary choices and how those choices are affecting their health.

A study conducted last year and published in the journal Frontiers in Sustainable Food Systems found that 62.4 percent of Chinese respondents claimed theft were either “very” or “extremely likely” to purchase plant-based meat, while another study conducted in 2017 found that 39 percent of Chinese consumers are reducing their meat consumption, reported Supchina.

In China, a consumer shift away from traditional animal-based protein could have significant impact on the industry. The Chinese government has set a goal to cut meat consumption by as much as half by 2030, according to the latest guidelines by China’s National Health and Family Planning Council, and between 2015 and 2020 the vegan market in China was expected to grow by 17 percent. Given the size of the population, these shifts could result in changes to livestock production on a global scale.

Despite regulatory friction between Beijing and Washington DC, Beyond Meat has already moved on plans to establish production in-country, and Impossible Foods is awaiting its green light to access the market (and these are just two of the many global rivals, albeit, the two most recognized). Others, that might not be as associated with plant-based foods, are also making deals to get a foothold in the country, such as Starbucks, which forged a partnership with Hong Kong plant-based meat brand Omnipork to develop plant-based pork options, and Nestlé, which announced its plans to make headway into the country’s plant-based space. 

Although not as recognizable a name as Beyond Meat or Impossible, v2food has a geographic and proximal advantage. Being located in Australia, the challenges faced by other overseas rivals may be easier for v2food to overcome.

“v2 has gone from strength to strength, and we’re delighted to continue to help Nick and the team take on the global challenge of producing Australian-made plant-based meat that is delicious and environmentally sustainable,” said Phil Morle, partner, Main Sequence Ventures. “In this round, we are pleased to be joined by an assembly of world-class investors to support the company’s international export ambitions.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.