Why are VCs doubling down on alternative protein tech?

Why are VCs doubling down on alternative protein tech?

Nick Cooney (Founder and Managing Partner at Lever VC) has nearly two decades of experience in the alternative protein sector. He’s seen how it’s changed throughout that time, and he recognised the growth potential from early-on – so he offers a unique perspective on the conversation around novel food sources. 

We caught up with him after his keynote at #LEAP23 to bring a little of that perspective to the LEAP blog. 

Could you briefly share your career journey so far, and any pivotal moments along the way that led you to found Lever VC? 

“I’ve been working in the space Lever VC is focused on – FoodTech, AgTech, and in particular the alternative protein sector – for around 18 years. Further back that involved working in multiple areas, and then I began investing in the space in 2015. As the alternative protein sector began to grow, it was clear there was going to be significant financial opportunity in the space, so I started investing through a family office vehicle. I launched Lever VC with a partner in 2018 when it became clear that the sector was going to grow significantly more in the years ahead.”

How did you identify alternative proteins as a key area for investments and growth – and how has the sector evolved since you first stepped into it? 

“It’s a category that had been growing steadily for years, and then began to take off in a much more significant way about six or seven years back. The number of companies in the space has grown significantly in the past few years, from hundreds to today over 4,000 globally that Lever VC tracks in its internal database. 

“There’s also been an explosion of interesting new technologies developed up and down the value chain – from producing real animal proteins and fats from fermentation and cell cultivation and in plants, to novel production machinery, to modified seed genetics, and a lot more. The total revenue in the sector has also grown very significantly across a range of categories – plant-based milk and other dairy products, plant-based meat and meat alternatives, plant-based meals, plant-based protein bars and powders, and more.”

Could you share any startups you’re working with that are doing really innovative work in this space?

“There are such a wide variety of these. Examples from our portfolio include Bond, which is producing real meat protein via precision fermentation as a b2b ingredient for the pet food space; Mission Barns, which developed cell-cultivated animal fat as an ingredient input into the plant-based foods space; TurtleTree, which is producing human breast milk proteins from cell cultivation and fermentation for the infant formula sector; and Mozza which is producing real, fully formed casein (dairy) proteins in soybeans for the plant-based cheese and dairy sector.”

What do you wish everyone knew about the impact of alternative proteins?

“First, that it’s a very large category, with over 110 billion USD in annual sales and growing with a sizeable CAGR, including in 2022. Plant-based meat has gotten a lot of public attention but bigger categories in the space include plant-based milk and other dairy products, plant-based meals, plant-based protein bars and powders, plant-protein concentrates and isolates, traditional meat alternatives, and other things. 

“Second, that it really does have a huge impact on preventing climate change; an exhaustive report published by Boston Consulting Group last year found that investments in plant-based protein have significantly more of a ROI in terms of reducing climate emissions than any other investment sector – while also having significant financial upside. It’s also a very established one, with 17 exits in the $100m+ category in recent years, which had an average exit price of $400 million.”

What did you most enjoy at LEAP 2023 – and what did you gain from the event?

“It was great to see such a huge, well-executed event that clearly brought out a large number of people from numerous tech-driven sectors. It was also great to make a lot of useful connections at the event which will continue to be useful down the line.”

Thanks to Nick Cooney at Lever VC. Want to learn more? Register your interest to attend LEAP 2024. 

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