Investors are piling into a vegan-focused venture capital fund as the coronavirus pandemic highlights growing stresses in global food production.
Blue Horizon Ventures, a Zurich-based venture capital firm focused on making food more sustainable, has closed a 183 million-euro ($222 million) fund that will invest in startups from alternative proteins to smart packaging. The fund has attracted more than 100 investors and exceeded its initial target of raising 100 million euros, according to Managing Partner Michael Kleindl.
“Due to the pandemic, the awareness of sustainability and the loopholes in the food system became so evident,” Kleindl said in an interview. “Covid has accelerated the shift of capital toward more impactful, more sustainable investments.”
Climate change, a growing population, and most recently the pandemic, have spurred a push for alternative food sources. Hoping to find the next Beyond Meat Inc. -- which has surged fivefold since its 2019 initial public offering -- investors are tapping the drive to replace meat with environmentally friendly alternatives or tackle problems such as food waste. Much of the investment in food of the future is being handled by venture capital firms.
Venture-capital investors funneled $18.1 billion into food tech startups in 2020, largely thanks to the appeal of food delivery apps or online grocers, according to researcher PitchBook.
Blue Horizon drew interest from institutional investors, even obtaining money from two pension funds, Kleindl said, without giving further details. Other investors include the European Investment Fund, Mexican food manufacturers Grupo Bimbo SAB de CV and Sigma Alimentos SA de CV, Be8 Ventures Management GmbH and Givaudan SA.
Blue Horizon Ventures, where about 90% of the staff are vegan or vegetarian, has so far backed startups such as plant-based meat producer The Livekindly Co. and lab-cultivated meat maker Mosa Meat BV.
“We really try to take the animal out of the equation,” Kleindl said.
The firm has plans to launch a second fund in the fourth quarter, which will be slightly larger than the first one, he said.
“The innovation we are seeing is truly amazing,” Kleindl said. “I can talk for hours about the cool companies we are seeing.”