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Impossible Foods’ $108m Series D, ADM M&A, Brazilian Fertilizer PE Deal, Cannabis Fundings and more

October 8, 2015

Welcome to another edition of AgFunderNews’ weekly roundup of funding and industry news from across the globe. This was a dynamic week of fundings, mergers & acquisitions, and food and agriculture policy, but what’s got most people talking this week is Impossible Foods’ whopping $108 million Series D round. Led by UBS, the round brings the company’s total funding to $183 million, even before the company has released any of its meat substitute products to the consumer market.

The Californian startup is developing plant-based meat and cheese alternatives with a dual purpose to provide great taste and nutrition while reducing livestock production’s impact on the environment. The company remains committed to its goal of creating an incredibly convincing burger where the patty and cheese are made entirely from plant-based derivatives.

Back in July 2015, reports indicated that tech giant Google made a bid to purchase Impossible Foods for somewhere between $200 million and $300 million, with the same sources indicating that the price tag wasn’t high enough for Impossible Foods’ to sign on.

Bill Gates’ investment arm Cascade Ventures, an existing investor in the company, joined the round alongside VC heavyweights Khosla Ventures, Horizon Ventures, and a Greenwich, Connecticut private equity firm Viking Global Investors.

Bill Gates is also invested in a similar plant-based protein substitute company Beyond Meat as the alternative protein market has continued to gather attention both good and bad; egg-replacement company Hampton Creek had a run-in with the FDA recently around the labeling of its flagship product Just Mayo. The FDA argues that anything labeled as mayonnaise needs to contain eggs.

Other companies in the space like Modern Meadows out of Brooklyn are aiming to provide the same environmental benefits without the plant-based inputs, instead growing meat using muscle cells in laboratories.

While the war over meat production’s impact on the environment wages on, Indian dairy continued to make moves as Parag Milk Foods prepares for its IPO, aiming to raise $49.5 million. The Pune-based outfit has also recently raised about $9 million with existing private equity investment firm IDFC Alternatives. Parag’s IPO follows Prabhat Dairy’s recent IPO, which didn’t make quite the splash Prabhat had hoped. With investors still pouring dollars into the Indian dairy sector, there’s no use crying over spilled milk.

In the M&A realm, global consumer goods company Archer Daniels Midland (ADM) announced its acquisition of Eatem Foods Company, a producer and developer of traditional, as well as natural and organic, savory flavor systems. The deal provides more evidence that consumers’ shifting preferences toward naturals and organics are a lot more than a passing fad. The company also made headlines this week with an announcement that it had joined the Andean Family Farmers partnership to boost Bolivian quinoa smallholder farms. Through the social investment program, ADM’s contribution will go toward supporting much-needed irrigation projects in southern Bolivia.

South America appeared elsewhere in the news this week after private equity firm NGP Global Agribusiness Partners invested $40 million into Northern Brazil-based fertilizer producer Campo Rice Fertilizers. NGP, which currently manages over $19 billion of assets in the natural resources sector, also made a $60 million commitment to Proximity Malt, a company providing locally-sourced specialty malts for the craft brewing industry. Proximity Malt plans to build state-of-the-art malting plants at a scale designed to match the growing demands of the craft brewing market while enhancing its local raw materials operations.

Crop protection, seed, chemical, and nutrient product provider Univar Inc. is set to acquire Future/Blue Star, which specializes in logistics, warehousing, packaging, and formulation services to Canada’s agriculture industry.

Commodities trader Glencore is shopping for a buyer to purchase a stake in its agricultural assets and has reportedly been in talks with Saudi Arabian wealth funds, China’s state-backed grain trader COFCO, and a number of Canadian pension funds. The Swiss trading and mining company saw its shares take a 75 percent hit this fall due in part to weak global commodity prices. The company has expressed hopes to raise roughly $2 billion from selling some of its assets, including a small stake in its agriculture assets by early 2016.

Back in the US, farmland real estate investment trust Farmland Partners has unveiled plans to host part of Iberdrola Renewables’ 208 megawatt Amazon Wind Farm on two of its North Carolina farms. The wind farm, which is currently under construction, will cover 28 total acres of Farmland Partners’ acreage.

California company The Green Exchange closed a second round of funding to support its online medical marijuana auction site, Loud Cannabis. The funding will be used to expand the company’s technology to other states that have approved legal cannabis, including Colorado, Washington, and Oregon. The undisclosed deal involved a number of private investors. Meanwhile, a California company called Santa Cruz Bakeware has launched a crowdfunding campaign on Indiegogo to support its medical and recreational marijuana storage container products branded under the clever moniker “Greenskeeper.”

The US Department of Agriculture’s National Institute of Food and Agriculture (NIFA) is offering $3 million in grants to address critical issues affecting agriculturally-important plants and animals. NIFA director Sonny Ramaswamy described the grants as “essential to promote partnerships between researchers, extension experts, and producers to ensure the success of American agriculture.”

Organics and natural food products are continuing to take the consumer market by storm. According to event organizers, over 400 new brands featuring organic and natural products debuted at this year’s Natural Products Expo East conference, one of the largest business-to-business tradeshows in the country. New products and tradeshow offerings included floral ingredients and upcycled food and packaging waste, and a number of dairy and protein alternatives.

We wrap up this week’s news in brief in brief on Capitol Hill, where two top-level cabinet members testified before the House Agriculture Committee on whether the latest update to the Dietary Guidelines for Americans (DGAs) should include a proposed element discussing sustainability issues in food production. In a joint statement, US Secretary of Agriculture Tom Vilsack and US Secretary of Health and Human Services Sylvia Burwell said: “we do not believe that the 2015 DGAs are the appropriate vehicle for this important policy conversation about sustainability.” Impossible Foods’ funding announcement came just days before the Committee’s hearing on the DGAs, which have yet to be finalized.

On October 21, 2015, the Senate Agriculture Committee will tackle another tough issue facing food and agriculture: the Safe and Accurate Food Labeling Act, a bill proposing a voluntary labeling scheme for genetically modified food products. The legislation, which would preempt states from enacting their own GMO labeling laws, has been quite controversial with proponents of GMO labeling who would rather see a mandatory labeling scheme.

Check back with AgFunderNews next week to find out what went down at the hearing on the Dietary Guidelines and how different industry groups have weighed in on whether sustainability should be a factor in setting national health goals.

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