Food Entrepreneur - June 23, 2020 - 10

FOOD ENTREPRENEUR

F

UNDING in a
INANCIAL CRISIS

How early-stage brands are raising capital
amid the global pandemic

BY MONICA WATROUS

I

n a market disrupted by pandemic,
many investors are writing fewer
checks and favoring later-stage deals.
Startups seeking to raise capital in the
current environment must demonstrate
relevance and resilience.
In May, grocery delivery startup Imperfect Foods raised $72 million in a Series
C funding round. The company, which
aims to reduce food waste by distributing excess or flawed produce and other
staples, saw weekly order volumes double
since January as consumers stayed home
to slow the spread of the contagion.
"Our fundraising efforts were well
underway ahead of the COVID-19 pandemic," said Philip Behn, chief executive officer
at San Francisco-based Imperfect Foods.
"While the pandemic impacted the overall
timeline of the raise and close, it also proved
how companies like Imperfect Foods can
help solve some of the issues plaguing our
food system, and as a result, we saw some
new partners express interest in the round."

pandemic began, we've seen more investment activity among startups developing
alternative proteins," said Jake Matthews,
intelligence analyst at CB Insights. "Food
retailers are facing a range of supply chain
disruptions, particularly in the meat
category - and alternative proteins like
plant-based meats provide a way for grocers
to diversify their supply."
During the first three months of
2020, US producers of plant-based meat,
egg and dairy alternatives raised $741
million, according to The Good Food Institute, a Washington-based non-profit.
"Investors have seen the market
opportunity and are moving to capitalize
on a global shift in the way meat is produced," said Caroline Bushnell, associate
director of corporate engagement for The
Good Food Institute. "This record-level
investment will bolster the industry and
support continued growth and innovation

for the long term, ensuring that alternative protein companies have the resources
to grow and thrive, particularly during
times of short-term market volatility."
Rebellyous Foods, Seattle, maker of
plant-based chicken-style nuggets, raised
$6 million in Series A funding in late
March. The money will support expanded
production, said Christie Lagally, founder
and CEO.
"We closed our Series A on March
31, so it was close to the beginning of the
shutdown," she said. "However, Rebellyous was successful because our investors
truly understood both the potential of
the plant-based meat market as well as
Rebellyous' solutions to use production
technology to bring the cost down so these
products are available for everyone.
"So, while it's definitely harder to
raise funds during an economic downturn, the plant-based foods industry is

Grocery delivery startup Imperfect Foods raised $72 million after experiencing a surge in
demand during the pandemic.

All in on alt-meat

40

Food Business News

IMPERFECT FOODS FACEBOOK

Funding to food and beverage startups hit a new high in the first quarter of
the year, surpassing $1.3 billion and more
than doubling from the prior quarter,
according to CB Insights, a market intelligence company. Across major consumer
products categories, the total number of
deals fell 3%, but total funding increased
36% from the prior quarter.
"It's hard to say how funding will be
impacted moving forward, but since the
June 23, 2020
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