Agrifood Tech | October 14, 2016

#Dealflow 10.13.16:

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#Dealflow : Tyson Goes Beyond Meat, Bridges Backs Vegetarian Express and USDA Invests in Rural Development

Nov. 13, 2016

Sustainable food, animal welfare and the logical (if not always fully satisfying) conclusion, vegetarianism, is rising as an investment theme (have a listen to our recent podcast, “How Bringing Animals Into Impact Investing Can Help People, Too”). This week’s #Dealflow highlights some ventures dedicated to making going veggie not only more appealing, but more profitable as well, a combination that is bringing in some surprising corporate investors.

Redefining “meat.” Tyson Foods, the U.S.’ largest meat manufacturer, took a five percent equity stake in veggie-food producer, Beyond Meat. Beyond Meat makes plant-based “meat” products, like its burger brand, Beyond Burger, which is currently being sold by Whole Foods. The amount of Tyson’s investment, which was part of Beyond Meat’s Series F fundraising round, was not disclosed. A Tyson representative told the New York Times that it was made to give Tyson exposure to a growing segment of the U.S. food — and particularly protein — market. It has raised questions, however, with others speculating that it’s a distraction from its industrial animal processing business, which has recently come under scrutiny for abuses. For Beyond Meat, its latest round also saw participation from the U.S. Humane Society and General Mills’ venture group. It follows a $17 million Series E round last year.

Green for greens. Bridges Ventures has made a £5.6 million ($6.8 million) equity investment in vegetarian food supplier, Vegetarian Express. Vegetarian Express sources and supplies more than 1,000 plant-based products to the U.K. food service industry. The investment will support the business’ growth plans beyond its current reach of 2,500 U.K. food institutions. It will also usher in a leadership transition, as it gives Bridges Ventures a controlling interest. Vegetarian Express’ stakeholders David Jonas, founder, and Will Matier, will remain involved while the former COO of Premier Foods, Tim Kelley, will become executive chairman. Bridges Venture’s investment was made via its Sustainable Growth Fund III. It aligns with a reduced meat consumption trend in the U.K.

Rural development. The U.S. Department of Agriculture and seven foundation partners have committed $400 million to support the development and upkeep of community facilities in rural parts of the U.S. Poverty levels are disproportionately high in the U.S., with some areas facing rates of 20 or 30 percent. The commitment has been split into $800,000 to $50 million grants, which will be passed on as low-interest facilities financing for education, healthcare and infrastructure via 26 community development finance institutions (CDFIs). The CDFIs are receiving the funds from the USDA’s partner, Uplift America Fund — an initiative launched by the Mary Reynolds Babcock Foundation and backed by the Ford, Heron, Northwest Area, Winthrop Rockefeller, Bank of America, and JP Morgan Chase foundations. Bank of America is offering loan guarantees of up to $100 million for the initiative.

Microfinance. Global Partnerships Fund Management has raised $8 million from Dutch development bank FMO for its sixth Social Investments Fund. The fund, which is targeting a $75 million raise, will issue senior loans to small and start-up microfinance institutions in Latin America and sub-Saharan Africa. FMO’s investment was made in the form of two debt facilities — 5-year and 10-year notes — to encourage additional impact investment capital in what could be seen as a higher risk fund, owing to its focus on barely-profitable and not-yet-profitable MFIs.

Charity banking. Big Society Capital has purchased £5 million ($6.1 million) in ordinary shares of U.K.-based Charity Bank, which provides loans to charities and social enterprises. Charity Bank has issued £150 million in loans since 2002, including £55.8 million so far this year. The investment is the second tranche of Big Society Capital’s £14.5 million investment commitment to the ethical lender. It previously purchased £4.5 million in the bank’s shares in 2014.

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DealFlow is ImpactAlpha’s weekly roundup of what, where, how and why impact capital flowed each week… See more impact deals in ImpactAlpha’s DealFlow section. And send your deal news to [email protected].