In recent years, venture capital has poured into food companies, from meal kit and grocery delivery services to the makers of environmentally sustainable, or health-promoting food products.
Now, investors and entrepreneurs from tech, food and the restaurant industry have launched a firm, and closed a $42 million debut fund called Powerplant Ventures, to invest specifically in “plant-centric” and “better for you” food and tech companies.
The firm’s co-founding partners include ZICO Coconut Water founder Mark Rampolla, who sold his beverage business to Coca Cola in 2013; Kevin Boylan and T.K. Pillan, co-founders of the vegetarian restaurant chain, Veggie Grill, which has served 1.2 million guests over the past 90 days; and Dan Beldy, formerly the Managing Director of Disney’s venture capital arm, Steamboat Ventures.
According to Beldy, Powerplant VC will do seed, Series A and B deals, writing checks up to $250,000 in a seed round, or between $1 million to $2 million dollar checks in Series A or B deals, more typically.
Beldy also said the firm will look for what venture capitalists usually want in any industry: companies with at least a million in revenue and growing for earlier stage deals and startups with a strong team, differentiated products and great market potential at any stage.
In later-stage deals, the firm is expecting to invest alongside of top-tier venture firms that also back consumer packaged goods and e-commerce startups, and corporate strategic investors in the food and beverage business.
Why the emphasis on vegan and vegetarian products, or companies that sell and distribute them?
Boylan said, referencing United Nations World Food Programme studies, “We’re not delivering the nutrition and wellness we need in a way that’s sustainable enough to feed a world population of 9 billion people by 2050. And raising livestock for food produces more greenhouse gas emissions than all of the world’s transportation systems, combined.”
Beldy added that, besides the wish to invest in products and companies that can reduce pollution and feed the world without sacrificing health, Powerplant VC and its limited partners see huge consumer shifts in food consumption that will lead to high returns.
“The scientific committee that advises the FDA recently said that a diet higher in plant based foods and lower in animal based foods promotes better health, and that’s going to have an impact on how Americans think about food. Of course. But Millennials have already changed the game in food. They are checking labels and want to know what is the origin of the things they are putting into their bodies. They want to eat healthier,” he said. “Ergo, demand will drive supply.”
Powerplant Ventures is in good company investing in this shifting, massive market.
Among other investors drawn to the food segment are: S2G Ventures, Obvious Ventures, CAVU Ventures, New Crop Capital and CircleUp. All of these are actively investing in food and beverage businesses with a health- and sustainability bent, as well.
Powerplant’s plant-centric focus remains unique.The firm has already invested in 8 food and food tech startups including: Hail Merry, REBBL, Thrive Market, Terravia, Hampton Creek, Treasure8, and Juicero.
Featured Image: Powerplant Ventures