Singapore-based venture capital firm Good Startup has raised $25 million in the first close of its Good Protein Fund I that will be used to invest in alternative protein companies worldwide.
Investors in the new fund are exclusive individual investors and family offices, the firm said in a press statement. The firm secured commitments from Symphony Asia Holdings chairman Anil Thadani, Kim Seng Holdings chairman Tan Kim Seng, and a group of senior partners from an undisclosed consulting firm who are acting as angel investors.
Good Startup, which started fundraising in January this year, will use the capital raised from Fund I to invest in a total of 32 companies. So far, the firm has put money into six alternative protein startups – most notably San Francisco-based faux egg and cell-meat maker Eat Just, as well as alternative dairy maker TurtleTree Labs, cell-based seafood producer Avant Meats, plant-based ‘chicken’ maker Rebellyous Foods, cell-based seafood maker Cultured Decadence, and cell-meat producer Novel Farms.
The firm expects to close the fund in August this year.
“In addition to funding, Good Protein Fund I will actively work with these companies in a range of operational areas. These include IP protection, organisation design, scaling-up, hiring, and fundraising strategies,” the firm said.
About 80% of the fund will be invested in early-stage startups and the remaining 20% in late-stage firms and secondaries. Check sizes will vary between $250,000 to $1 million.
The investment period of the fund will be four years, Good Startup said, and expects half of it to be deployed in Asia. As to why the firm chose to set up a cross-border fund, Good Startup said in an e-mail response that it is to take advantage of the relative maturity of the market in the West, and the partners’ expertise.
“Because some parts of the market, such as North America, are more developed in the sector, we can leverage those learnings and apply them to markets earlier in their development, like Asia,” they said.
“The managing partners also have decades of work experience across the US and Asia markets. We can also connect stakeholders within these markets … for example, if a company in North America wants to expand to Asia, we enable them to do so. We also bring Silicon Valley best practices to operate companies to our investments around the world,” they added.
Good Startup was founded by Gautam Godhwani, who previously co-founded several tech companies and currently also a partner at early-stage technology investor Green Era Capital, and Jayesh Parekh, a former managing partner of Jungle Ventures Fund I and II and the co-founder of Sony Entertainment Television, which he exited in 2013.
Alt protein space grabs investor interest
Deals within the alternative protein sector have heated up in recent years as entrepreneurs and food manufacturers look to creating meat alternatives as both a solution to climate change and a business opportunity.
A 2019 report by Barclays predicted that the global alternative meat market, currently valued at $14 billion, or 1% of the $1.4 trillion meat industry, could be worth 10 times more at about $140 billion by 2029.
Alternative protein companies in Asia-Pacific received $205.61 million in investments last year, over six times the $33.8 million they raised in 2019 and nearly 21 times 2018’s $9.86 million figure, according to Pitchbook figures compiled by alternative protein advocacy group The Good Food Institute.
This year, notable deals and exits include Eat Just, which raised $170 million in May, and Oatly, which listed on the Nasdaq in the same month.
Other venture capital firms have also noted success with their alternative protein forays. Temasek-backed Big Idea Ventures hit the $50-million final close of its debut alternative protein fund in March this year, while Lever VC said it made the fourth close of its first fund at $46 million and is on track to close it at the $65-70 million range in June.
Alternative proteins can typically be broken down into three categories: plant-based, fermentation – a process that uses microbes to produce proteins – and cell-based – meat grown in laboratories using animal cells.
These methods of producing proteins have been gaining traction globally amid unsustainable animal meat consumption. The world’s population will rise from 7.7 billion currently to 9 billion in 2050, according to the United Nations, alongside a growing middle-class that can now afford to eat meat.
Producing proteins through such novel methods is also seen as a way to curb zoonotic diseases – as the proteins are produced in a cleaner environment or do not involve livestock – and animal cruelty.