Auckland-based food startup Sunfed has raised NZD $10 million ($9.38 million) in Series A funding, to lead the charge towards a solar-powered planet.
The funding round was led by Australia’s Blackbird Ventures, and also included the New Zealand Venture Investment Fund, Quadrant Private Equity founder Chris Hadley, and K1W1, the investment company run by New Zealand entrepreneur Stephen Tindall.
A former software engineer, Sunfed founder Shama Sukul Lee turned her hand to the meat-free foods market in 2015.
Over the past three years, the startup has secured a small amount of funding to complete research and development, building its own hardware to replicate the look, feel and texture of meat, using only “clean” plant products.
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It also bagged NZD $1.5 million ($1.41 million) in funding from UK and US investors to commercialise the product in New Zealand.
This latest funding will fuel the next stage of growth, including expanding overseas, including into Australia.
“The overarching purpose of Sunfed is to accelerate humanity to being fully solar powered,” Lee tells StartupSmart.
“The whole planet is essentially solar powered”, she points out.
“In any energy system, the closer you get to the source of energy, the more efficient the chain gets, and so if we move closer to plants and skip the animal … then everything becomes inherently efficient and sustainable,” she adds.
Food is just another form of energy, Lee says, and meat has become “one of the most unsustainable forms of food energy on the planet”.
At the same time, meat alternative products such as tofu don’t cut the mustard as a viable option for dedicated meat eaters.
There’s a trend of consumers moving away from meat consumption, Lee says, and Sunfed is intended to provide a real choice for meat eaters.
“We understand that meat tastes fucking delicious,” she says, “so it’s a very difficult problem to solve.”
Lee compares meat alternatives to electric vehicles.
“Electric cars were around for a long time, but they were terrible,” she says.
Tesla, however, creates an electric vehicle that is “better than your status-quo car”, allowing the customer to feel empowered to choose an environmentally-friendly option without compromising on experience.
“If the choice is good, the consumer will respond,” Lee says.
The raise was led by Blackbird Ventures, and while Lee is happy to have Australian investors on board, she says the VC was a good fit.
Lee was looking for an investor that was aligned with her vision, she says. And that vision is global.
“We want VCs that are aligned with this — that aren’t looking for a quick exit,” Lee says.
“We want to make sure the company can grow and be sustainable.”
The funding will allow for upscaling of the infrastructure and engineering piece, while also funding more R&D for the creation of new products.
Sunfed is also hiring in its New Zealand locations, and for its new Australian business, Lee says.
“We didn’t know it was going to work”
With a background in software engineering, Lee was initially faced with the challenge of using hardware to try to perfect the product’s texture.
“Nothing existed that could do it out of the box. We wanted to make sure we could control every single touchpoint, so we ended up building our own machines.”
But the transition from software to hardware was “humbling, to say the least”, Lee says.
“You don’t need as much capital upfront if you’re not building hardware. You can code all night, you just need a laptop and some coffee, you can hire someone in a different country, you don’t have to worry about geographical barriers, and you have a plug-and-play infrastructure,” she says.
When you’re building physical technology, you need capital from the get-go, she says.
“We tried to bring all those principles of software — very fast, agile innovation — and applied it to hardware,” she says.
When Lee and her team first started to work on Sunfed, “we didn’t know it was going to work”, she says.
Her advice to other founders is simply to “jump in and don’t give up”, she says.
In nature, all forms of life are able to adapt, she adds.
“No matter what gets thrown at you, you can adapt, you can pivot — have confidence in that,” she urges.
If you over-plan, Lee says, you may miss out on alternative possibilities you haven’t thought of, but that may well be better.
“You may not know the answers, but just jump in, start getting the real-time data, and just respond to that,” she says.