Los Angeles-based vegan cheese maker Grounded Foods has recently announced that it has closed a US$1.74 million seed funding round led by alternative protein venture capital Stray Dog Capital. The startup says it will be using the capital to scale-up production and distribution of its fermented cauliflower and hemp seed plant-based cheeses.
Announced on Monday (July 13), Grounded Foods has raised US$1.74 million in a seed funding round led by Kansas-based Stray Dog Capital with participation from consumer packaged goods investor Rocana Ventures, Veg Invest Trust, and GlassWall Syndicate members.
In a social media post, founders of Grounded Foods, Shaun Quade and Veronica Fil said that the funding will help the startup “go into full-scale production” and “grow our shipping capabilities, our distribution and make our products more accessible to people than ever before.”
Founded in 2019, Grounded Foods’ line of plant-based cheeses are crafted out of non-GMO hemp seeds and cauliflowers that are considered too “imperfect” to make it into supermarket retail – which reduces both cost and food waste. Unlike many other plant-based cheese brands, Grounded Foods’ vegan cheeses – which include camembert, gruyere, feta and cream cheese – are free from nuts, soy and gluten.
The investment makes Grounded Foods the latest addition to Stray Dog Capital’s portfolio of plant-based dairy startups, among them the famed Californian brand Miyoko’s Creamery.
“We are always looking for extraordinary players in the plant-based cheese category, and Grounded Foods’ product and team exceeded our expectations in taste, creativity and strategy,” commented Johnny Ream, principal at Stray Dog Capital.
The news comes amid the ongoing coronavirus pandemic, which has heightened consumer concerns about food safety, sustainability and health. “There’s an enormous shift happening all over the world right now, as we re-examine our eating habits and uncover deep inefficiencies in the food supply chain” said Grounded Foods co-founder Fil.
With some experts predicting that the traditional dairy industry will not survive the current crisis, many investors are looking to pour capital into emerging alternatives. Within the past month, vegan cheese brand Good Planet Foods closed a US$12 million Series A, while Chinese confectionery firm Multizen backed plant-based pea milk startup Ripple Foods.
Cell-based and fermented alternatives for dairy have also garnered greater attention from investors, with Singapore-based lab-grown milk startup TurtleTree Labs scoring US$3.2 million in seed funding and animal-free dairy food tech Perfect Day scoring US$300 million following a second tranche in a Series C round.
But even prior to the pandemic, consumers had already been gradually shifting away from traditional dairy products, primarily due to environmental reasons. According to nonprofit GRAIN, the ten biggest dairy corporations in the world are responsible for generating enough carbon emissions to match half of France’s total carbon output.
While conventional dairy sales took a tumble, prompting the two largest dairy firms in the U.S. to file for bankruptcy last year, sales of plant-based products have skyrocketed. Plant-based cheeses, in particular, has grown 18% in 2019 to reach US$190 million in the U.S. alone, and recent reports suggest that the global sector will hit US$7 billion by 2030.