Investors Show Strong Interest in Plant-Based Protein
August 26, 2019
AgFunder News reports:
PowerPlant Ventures, a private equity firm dedicated to investing in emerging plant-based food and beverage companies, and backer of some of the leading brands in the category, including Beyond Meat, Ripple Nutrition, and Thrive Market, announced it has closed its second fund - PPV Fund II, at $165 million.
Founded in Los Angeles in 2015, PowerPlant is led by an impressive team of founders: Mark Rampolla, the founder of ZICO Beverages, a coconut water pioneer that was acquired by The Coca Cola Company in 2013; Kevin Boylan and T.K. Pillan, co-founders of Veggie Grill, the largest plant-centric restaurant company in the U.S.; and Dan Gluck, co-founder of Health Warrior, a superfood brand acquired by PepsiCo in 2018.
In 2016 the firm announced the close of its first fund at $42 million, with a portfolio at the time that included Hail Merry - a vegan, gluten-free, dairy-free, non-GMO snack company; REBBL - a plant-based protein drink company; Thrive Market - an online gluten-free, non-gmo, non-toxic, vegan marketplace; Terravia - a biotech company; Hampton Creek - a plant-based food company; Treasure8 - a food innovation and technology company; and Juicero - an organic, cold-pressed juice company.
Plant-based proteins have possibly been the most prominent narrative within the food sector in recent years, leading the plant-based food sector to be one of the fastest growing and dynamic spaces within the investment universe - evidenced by PPV Fund II closing at more than three times its predecessor, and exceeding its original target of $100 million by more than 50 percent.
The team plans to either lead or co-lead Series A or B rounds - investment stages for early-stage food startups that PowerPlant sees as lacking capital, according to Crunchbase. Each investment will be between $4 million and $8 million per deal, with capital held back for follow-on investments.
“We are in the early innings of a major food revolution. Upstart insurgent brands are responding to changing consumer demands at a much faster pace than the major incumbents,” said Rampolla. “As a result, they have been capturing a significant share of the growth in the sector,” added Gluck.
With a mission to build a better food system through the provision of capital and expertise to innovative and visionary entrepreneurs at the nexus of plant-based food and technology, PPV Fund II has already completed two investments in Vive Organic, a leader in the wellness and functional shots category, and Your Super, a producer of functional superfood mixes, and DTC plant-based nutrition company.
Demand for plant-based protein continues to rise. Between 2013 and 2017 launches of vegan-focused food and beverage startups saw average annual growth exceeding 45 percent, according to Innova Market Insights, and shipments of plant-based products to food service distributors to retailers and operators increased by 20 percent in the twelve months ending November 2018, compared to the previous year, according to the NPD Group.
Today, a full 25 percent of U.S. consumers say they eat and drink plant-based foods for a variety of reasons, ranging from dietary and health reasons, to concerns over animal welfare and the environment.
This shift toward animal-free eating has even sparked the opening of the Center for Plant-based Living (CPBL) in St. Louis, Missouri, the first completely plant-based culinary and nutrition education center in the U.S.
“This is a natural progression of the business, CPBL founder Caryn Dugan told Food Ingredients First. “Over the years, I have watched this plant-based movement gain strength and speed. People are hungry for a place to go where they can always get reputable information and gain the skills they need to start adding more plants to their plate. They also need support - oftentimes the missing key component that halts change. CPBL will offer all of this.”
All of this rapid change - not only toward plant-based diets, but consumers also being more engaged in their food and its supply chains, has created a space ripe for investment.
“We are capitalizing on the $5 trillion global food sector amidst disruption,” said Boylan.