What do investors that have been involved in this space have to say about the changing landscape and what suggestions they have for plant-based and cell-based startups?
On funding
Samantha Wong, Partner at
Blackbird, generalist VC firm from Australia/NZ that invested in Fable, Heuros and Sunfed Meats:
“There is more hesitancy in the market generally but we and all the other venture funds are still investing. When the COVID-19 crisis has died down, we think the need for affordable, high quality meat alternatives will be even more obvious and potentially give momentum to a market already growing quickly.”
Christian Cadeo, Managing Partner at
Big Idea Ventures, hybrid accelerator/VC focused on alternative proteins, based in Singapore and New York (invested in Phuture Meat, Karana, Shiok Meats):
“Some VCs are holding back on deploying capital to see what shakes out. But we are also seeing some that have the foresight to continue to invest. We are still accepting applications for our accelerator.“
Phil Morle, Partner at
Main Square Ventures, a venture arm of
CSIRO, Australian federal government research agency (invested in v2food, supplier of Rebel Whopper to Burger King/Hungry Jack’s):
“We are actively working on new deals in this space. At this stage, we believe it is more attractive than ever. ”
Tim Noakesmith, co-founder of VOW adds a different perspective that might be applicable to cell-based (cultivated) meat startups:
“There are definite threats to companies reliant on substantial rounds of investment to survive as funds may seek to rebalance their portfolios to include companies more immediately focused on revenue generating.”
Tips for startup founders
Samantha Wong (Blackbird) on raising funds now vs. later:
“If you are wondering whether to try and raise in the next 6 months or 12 months from now I would suggest that it will likely be harder to raise 12-18 months from now. The reason is that there are still funds that have been raised in the last 12 months with ‘dry powder’ to invest in new companies. A year from now most of the capital in the system will have been invested but fewer funds will be able to raise again, making capital that much more scarce.”
Christian Cadeo (Big Idea Ventures) on managing cash burn:
“Be extremely capital prudent and be able to convey that to investors. Discuss how you can minimize burn yet hit milestones. Have a back-up for any potential disruption in your supply chain or distribution.”
Samantha Wong (Blackbird) adds on the same topic:
“My recommendation to all companies is to have a minimum of 12 months and ideally 24 months runway so that they can see out the downturn.”
Phil Morle (Main Square Ventures) about investor mindset:
“Investors know that the world will be different as we move into rebuilding mode on the other side of Covid19 so it is important to articulate why your company is relevant in that world.”
The final tip for entrepreneurs from Christian Cadeo (BIV) is about resilience:
“You will have to hustle and your hit ratio will be low in this environment. Keep at it and don’t get discouraged as there are macro issues out of your control.”