Alternative protein venture capital (VC) fund Lever VC on Wednesday announced that it has hit the final close of Lever VC Fund I at $80 million to back early-stage, plant-based cultivated meat and dairy firms worldwide.
Lever VC Fund I, by and large, exceeded the initial fundraising target of $50 million when it secured its first close at $23 million in August 2020.
The new fund roped in various global limited partners (LPs), including meat companies, ingredient and food commodities firms, agrifeed businesses, family offices, and a fermentation firm in Europe, said Lever VC in a statement. The firm, however, did not name the LPs of Fund I.
“We’re pleased with the strong growth in value, sales, and technology of our current portfolio, and we’ll continue to invest in more stellar companies over the next year,” said Nick Cooney, managing partner of Lever VC. He said that the firm is looking to initiate the fundraise for Lever VC Fund II early next year with “large pre-commitments from existing LPs and strong interest from institutional investors.”
By far, Fund I has invested about $16 million to build a portfolio of 19 plant-based, cultivated, and fermented animal protein companies from Hong Kong, mainland China, Singapore, Russia, UK, Germany, France, Spain, the US, and Brazil. Five of the 19 investees are in Asia.
The overall capital deployment from Fund I is expected to amount to nearly $25 million by the end of 2021, Cooney wrote in an email reply to DealStreetAsia. He wrote that Lever VC will fully deploy Fund I anytime before its life span ends in June 2024.
Lever VC’s portfolio companies include Singapore-based, cell-based milk solutions developer TurtleTree Labs; Silicon Valley’s cellular agriculture company Mission Barns; Hong Kong’s cell-based protein startup Avant Meats; Bond Pet Foods, which produces meat protein from fermentation; plant-based animal protein provider Mozza; and Europe’s cultivated seafood developer Bluu; to name but a few. The firm is also a backer of Marvelous Foods, a China-focused, plant-based alternative food startup.
Its first cheques are typically in the pre-seed or seed stage, with some at the Series A stage. For the later stage, the firm makes follow-ons in Series A and Series B deals, while potentially betting on a few Series C opportunities.
Most of Lever VC’s investments so far have ranged from $500,000 to $1 million, Cooney wrote. “As we get into follow-on investments, we will write cheques up to around $4 million.”
Portfolio companies that received Lever VC’s investment in 2019-20 have booked “growth in valuation”. Three of them are set to launch their first follow-on rounds later this year, according to the statement.
To initiate fundraise for $250m Fund II in 2022
With the completion of its oversubscribed Fund I, Lever VC is already in active conversations with potential investors as it plans to initiate the fundraising process for Lever VC Fund II early next year.
The firm has set a preliminary target of $250 million for Fund II, Cooney wrote. The team has received “verbal pre-commitments” for half of the targeted size. “It’s possible we’ll revise that target number upwards a bit next year.”
If successfully raised, Fund II will enable Lever VC to deploy more significant capital and write bigger cheques for companies at the mid- and growth-stage in the alternative protein space.
While its focus on early-stage alternative protein startups will continue with Fund II, Cooney wrote that the firm may also look into opportunities in related food- and agtech sectors that “tie into the same consumer shifts that are driving the alternative protein space”.
Lever VC’s plans of stocking up more capital comes as the global market for alternative meat, eggs, dairy, and seafood products is set to reach at least $290 billion by 2035, according to a March report by Boston Consulting Group (BCG) and impact investor Blue Horizon.
The report predicts that up to 22% of global consumption of meat, seafood, eggs, and dairy is likely to be alternative by 2035 — given a push from regulators worldwide and technology iterations that allow alternative protein to reach full parity in taste, texture, and price with conventional animal proteins.
To capture the nascent yet fast-growing market, Lever VC was founded in early 2018 by Cooney, who also co-founded the Good Food Institute, a non-governmental organisation (NGO) working to grow the alternative protein space. It currently tracks over 2,000 alternative protein companies worldwide, with a central office in Hong Kong and team members in Singapore, mainland China, the US, UK, France, Israel, Brazil, and India.
“We see opportunity in a lot of areas, depending on the specifics of the company and their approach,” Cooney wrote.
“In the portfolio now, we’ve got straightforward plant-based CPG (consumer packaged goods) brands that are B2C focused that have great products, good markets, and rapidly growing sales; ingredients companies focused on B2B ingredient inputs into the alternative protein space; and tech-driven companies (producing meat or dairy products from cultivation, fermentation, or in plants) whose long term value is built largely around IP generation or licensing models.”