Impossible Foods eyes doubling valuation with new funding round

A woman plants a the 'Impossible' branding on a prepared product. Photo: Impossible Foods

Impossible Foods Inc, maker of the plant-based Impossible Burger, is in talks with investors about a new round of fundraising that could more than double the $2 billion valuation it attained in May, according to people familiar with the matter.

The Redwood City, California-based company is seeking to capitalize on growing consumer demand for meat alternatives. Rival Beyond Meat Inc has seen the value of its shares more than triple since going public in May, and is now worth around $4.8 billion.

Impossible Foods, aiming for a valuation of between $3 billion and $5 billion in the fundraising round, is looking to raise between $300 million and $400 million, the sources said. They cautioned that plans may change based on investor feedback.

Some existing Impossible Foods investors have been pushing for a larger raise at a higher valuation, one of the sources said.

The fundraising could set the stage for an initial public offering (IPO) for Impossible Foods as early as next year, according to the sources, who requested anonymity because the matter is confidential.

“We need to consider every option for fueling our long-term growth. However, we have not announced any plans or timing regarding an IPO,” anImpossible Foods spokeswoman said, declining to comment on any potential fundraising plans.

A big increase in the company’s valuation would indicate venture capital investors remain willing to bankroll big valuations in private fundraisings, despite the struggles of several high-profile startups in 2019.

Companies such as ride-hailing firms Uber Technologies and Lyft Inc have been unable to replicate high valuations attained in fundraising rounds in the stock market.

Office-sharing company WeWork was valued at as much as $47 billion in private fundraising rounds, but was considering going public at avaluation of as low as $10 billion before postponing its IPO in September.

Impossible Foods, whose backers include venture capital investors Khosla Ventures and Horizons Ventures, as well as celebrities like tennis star Serena Williams and singer Katy Perry, has so far raised $777 million in the private market, according to data provider PitchBook.

Impossible Foods says its burgers are sold at more than 15,000 restaurants around the world. It also recently started selling its products at certain U.S. grocery stores.

The global meat substitutes market generated revenue of $4.2 billion in 2018, and is expected to be worth $6.1 billion by 2023, as more consumers convert to veganism or cut down on consumption of red meat, according to a report by Research on Global Markets.

Despite breakneck growth, some analysts have raised questions about whether the plant-based meat market has been overhyped. Beyond Meat shares, while still well above their IPO price from May, have pared gains to trade at less than half their all-time high.

Early market entrants like Impossible Foods and Beyond Meat are also facing increasing competition from traditional meat producers and packaged food companies such as Tyson Foods Inc and Nestle SA.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.