Aussie meat alternative startup v2food has bagged a whopping $35 million in Series A funding, as founder and chief Nick Hazell gears up to bring Australia into the global plant-based protein race.
The funding round was led by Main Sequence Ventures, which was also instrumental in founding the business. It also includes the Fairfax family, through their investment fund Marinya Capital, and Sequoia Capital China.
The startup is the brainchild of the CSIRO and its VC funding arm Main Sequence Ventures, and Hungry Jack’s head honcho Jack Cowin.
Cowin’s fast-food empire Competitive Foods Australia also contributed seed funding, and launched a v2food ‘Rebel Whopper’ in Hungry Jack’s stores in October.
Since then, the startup has sold close to one million burgers, Hazell tells StartupSmart.
While he doesn’t disclose what this translates to in dollar figures, “for a startup, it’s already generating significant revenue”, he says of the business.
“We’re ahead of what we thought were extraordinarily ambitious plans,” he adds.
“People are sitting up and taking notice.”
That said, the founder isn’t getting complacent just yet, acknowledging things can change quickly. Already, things have been a bit of a whirlwind for Hazell.
“It’s terrifying, of course,” he says.
“There’s absolutely no room for complacency. It’s a wild ride and things can change extremely quickly, we’re aware of that.
“But, the reality is that there’s a big consumer pool for this,” he adds.
“People are worried about climate change, they’re worried about what they can do as consumers … reducing your meat consumption is going to be important.”
“We have to get a move on”
Hazell considers this $35 million investment something of a milestone for v2food; a signal of the next step of startup maturity.
“The real goal is to become a significant business, and the reason it will be significant is because there’s a big problem out there,” he says.
“We have another planet’s worth of meat to produce and it’s not going to be from animals. So we have to get a move on.”
The majority of the funding is pegged for building a new factory, ramping up manufacturing and scaling the business, and bringing more specialist staff on board.
While it was always the plan to roll out the ‘Rebel Whopper’ product in Hungry Jacks pretty quickly, that was “just the beginning” Hazell explains.
Now the work is going into “establishing ourselves as a brand in our own right”.
He hints at big plans in the pipeline in Australia, including restaurant and retail opportunities, but he’s also planning on taking the business to the Asia Pacific region within the next 12 months.
“We want to be a global player here … that means we’re going to need some significant assets,” he says.
“We believe there’s an opportunity in Australia, but there’s a much bigger opportunity to export globally — and particularly into the Asia Pacific, where there’s huge growth in meat consumption predicted,” he explains.
“This is not a local Australian story. This is about preparing ourselves to be a global player in an industry that’s predicted to be really, really huge.”
A global movement
It’s certainly true that the plant-based meat trend has well and truly taken off, both in Australia and globally.
British ‘bleeding’ beef-free burger startup Moving Mountains launched in Australia last month in Woolworths stores all over the country. New Zealand startup Sunfed Meats also has chicken-free chicken on the shelves in Coles here.
In Queensland, algae company Qponics is harvesting a particular breed of algae that produces a high-value omega-3 oil, plus a high-protein by-product of the process that can be used in meat alternatives.
And, at the University of Technology Sydney, two students are working to cultivate lab-grown kangaroo meat.
In the US, it’s been Impossible Foods and Beyond Meat leading the charge, although the former has recently been hampered by a lawsuit regarding its burgers being cooked on the same grills as their meat counterparts.
“Impossible and Beyond have been in business now for more than seven years They have been very much trailblazers,” Hazell says.
“Of course we’re learning as much as we can from them.”
And, while Hazell stresses v2food could stand up as a competitor in the US space, that’s not where his focus is.
“Our product really does deliver. But actually, the growth in meat consumption in the world — which is the existential reason why v2food has to exist — most of that growth actually is in the Asia Pacific.”
Equally, he maintains v2food is a decidedly Aussie brand, operating in a slightly different market.
In the US, plant-based meat startups are facing pushback from a strong lobby of cattle farmers and connected entities. While Hazell has seen some pushback from farmers here, his ultimate goal is to bring them on the journey with him.
“It’s about sustainability and how we use great Australian agriculture to be part of the solution,” he says.
Aussie beef, for example, is pretty sustainable already, he says.
“Australia can be a major exporter of animal-based meat, and I think it could be an even bigger exporter of plant-based meat,” Hazell suggests.
“We want to move this debate away from a ‘win-lose’, this is a ‘win-win’,” he adds.
Hazell doesn’t see v2food meat replacing old-fashioned animal meat, but rather as an accompanying, supplementary industry.
“We will be raising cattle and producing animal meat way into the future. But, in addition, we will be producing a lot of plant-based meat,” he says.
“It brings the debate back to what is really important, and that is sustainability.”
The golden rule of plant-based meats
For other startups setting out to disrupt something as fundamentally traditional as food, Hazell has one critical piece of advice that could be easy to overlook.
“It really has to taste good,” he says.
“While we may be doing this for sustainability and nutrition, the product has to taste fantastic. That’s absolutely job number one.”
And at the same time, it has to work in the way consumers are used to working with food. The idea is nobody should have to change the way they cook, Hazell explains. That means the product has to fit in with their cooking habits, act in the same way as meat, and remain affordable.
“We still aspire to the foods our parents and our grandparents gave us,” he says.
“Let’s not ask the consumer to change too much.”
It’s up to the business to make a lifestyle shift as easy as possible, he adds, without expecting the customer to do any of the heavy-lifting.
“If we can do that, then I think this could be part of a big movement and a big wave, and we will see a lot of consumers shifting towards plant-based meat.”