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Image credit: V2food

Plant-based protein maker v2food raises $55m: ‘We consider ourselves part of the meat industry’

October 21, 2020

Australian plant-based meat maker v2food has raised A$77 million (US$55 million) in its Series B round, taking its total funding to date to A$113 million ($80 million) and setting the stage for its expansion into Asia.

Taking part in the Series B fundraise — which v2food claims is the biggest yet in Australia’s nascent plant-based meat segment — were a range of new and existing backers. Notable among these were prominent Asian investors such as Singapore-based Temasek and ABC World Asia; Hong Kong’s Horizons Ventures; Shanghai-based Esenagro; China Renaissance; and Sequoia Capital China.

Other participants included the UK’s Altitude Partners and Novel Investments, and Australia’s Main Sequence Ventures and Marinya Capital.

Sydney-based v2food launched last year as a collaborative venture, its founding shareholders comprising Australia’s national R&D agency — the Commonwealth Scientific & Industrial Research Organization (CSIRO) — its affiliate Main Sequence Ventures, and Competitive Foods Australia – the holder of the country’s Burger King master franchise, Hungry Jack’s.

The startup says that its goal is to build “version two of meat” using legume-derived protein to create a product that looks, tastes, and cooks like minced meat.

Its plant-based patties feature in Hungry Jack’s “0% beef” Rebel Whopper sandwich which launched in October 2019. In February this year, the startup began supplying Burger King outlets in not-too-distant New Zealand.

Since August, v2food has rolled out its direct-to-consumer offering across Australia, with its plant-based items appearing on shelves in Drakes and Woolworths supermarkets. Its products are also available in Dinnerly and Marley Spoon mealkits, and are on the menu at an increasing number of smaller restaurant chains.

Global vision

The next frontier for the company is to begin selling in other foreign markets – and it has its sights set on Asia in the first instance.

“It has always been a global vision,” says v2food CEO Nick Hazell – though he’s keen to stress the brand’s Aussie roots, which the company sees as a core element of its international push.

For some, it might seem unlikely that an economy so reliant on the production and export of animal meat would seek to position itself as a plant-based pioneer.

Impossible Foods CEO Patrick Brown has described it as his company’s “mission” to bring about the “inevitable” end of the traditional meat industry, while Beyond Meat founder Ethan Brown has set the publicly listed firm the goal of making animal meat “obsolete.”

But v2food — which aspires to be as visible a plant-based brand in Asia Pacific as the two US incumbents are elsewhere — is adopting a much more conciliatory approach. In fact, it posits itself as an integral part of Australia’s meat industry — a complement, rather than a competitor.

“Australia [is] very influential and widely known for its meat industry, for food safety and quality, for its sustainability,” Hazell tells AFN. “We see ourselves as very much a part of that story.”

Benefiting farmers

Aussie stockmen herding cattle and sheep out in the bush and scientists tinkering with soy protein in a Sydney lab aren’t as strange bedfellows as one might assume, in v2food’s view.

“If we could produce more meat in Australia, we would be exporting even more. [Plant-based versus animal protein] isn’t really a zero-sum game for Australia, it’s a win-win,” Hazell argues.

“Essentially we can add value to Australian crops, which are currently sold as stock feed at low values. We can turn them into meat. Most can see that’s to the benefit of Australian farmers […] We consider ourselves part of the Australian meat industry.”

V2food founding shareholder CSIRO recently teamed up with Woolworths and other investors to launch FutureFeed – a seaweed-based feed supplement that cuts cattle methane emissions by 80%. Read more here 

Moreover, with close to 75% of Australian-reared meat making its way overseas, Hazell — a former Mars and PepsiCo exec who v2food’s founding shareholders called on to head up the venture — feels that there’s a special opportunity to tap into.

“Developed countries like like Australia, Canada, the US are actually reducing their [domestic] meat consumption, but in Asia — and China specifically — it’s growing dramatically,” he says.

China, for example, has set a target of cutting domestic animal meat consumption by a massive 50% in the next decade – even as Chinese consumers look set to increase their average per capita carnivorism by 27 kilograms each over the same period, according to some estimates.

“It’s simply impossible to grow the amount of meat we need if we’re going to do it only with animals. Even without climate change, it would be an impossible task,” Hazell says.

“We need to do something seriously and quickly about reducing our dependence on animal-based meat; the problem not going away.”

Meat is expensive

According to Hazell, v2food’s primary focus is on tackling this looming sustainability crisis. To do that, it’s working on getting its products to a price point that’s the same as, or less than, animal meat.

“Meat is expensive — the most expensive thing we put in our grocery basket, for most of us — and particularly in developing countries it is aspirational. The main reason there are billions of vegans and vegetarians in the world isn’t because of some lifestyle decision; it’s simply because they can’t afford meat,” he says.

“So for us it’s very much about developing a tech and business model that makes plant-based meat not only nutritious and delicious, but [also] affordable for everybody.”

V2food will use the Series B funds to complete its production facility in Wodonga, Victoria, as well as to expand its team and to take its products into new markets.

“Animal agriculture requires a significant amount of water and land, and is a leading cause of greenhouse gas emissions,” David Heng, founder and CEO at first-time v2food investor ABC World Asia, said in a statement.

“To accelerate a consumer transition to a more plant-rich diet and help reduce reliance on unsustainable food production, we believe our role as an impact investment fund is to support industry-leading innovators like v2food […] This will have a positive impact in our fight against climate change.”

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