The Brief | July 24, 2019

The Brief: Call No. 10: Reporters’ Roundtable, plant-based food disruption, sustainable mobility, monitoring off-grid energy, driving ImpactAlpha’s growth

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Greetings, Agents of Impact!

Agents of Impact Call No. 10: Reporters’ Roundtable. Follow the story… behind the story. On The Call next week, ImpactAlpha’s David BankDennis Price and Jessica Pothering, along with special Agents of Impact, will count down “ImpactAlpha’s Big Nine,” our latest set of markers, hunches and hobby-horses about the transformation of business and finance now underway. Join a lively and conversational roundtable that brings you inside ImpactAlpha’sthinking. Thursday, Aug. 1st, at 10:00 am PT / 1:00 pm ET / 6:00 pm London.RSVP today.

Signals: Ahead of the Curve

Plant-based startups are eating Big Food’s lunch. It’s not just Beyond Meatand Impossible Foods. Climate- and animal- friendly food and beverage innovation is taking market share, and attracting capital. Plant-based food sales grew 11% last year to $4.5 billion, five times the growth of the overall food market. UBS forecasts the plant-based meat market will grow by 28% a year and reach $85 billion by 2030. Plant-based dairy could be worth $37.5 billion by 2025. The latest evidence comes from a tally of U.S. food and beverage investment activity by Food + Tech Connect that shows the break-out performance of plant-based alternatives. “The better-for-you food movement continues to expand,” author Ryan Williams tells ImpactAlpha. The funding frenzy may be oversaturating the market with niche brands and frothy valuations, he says, but “it’s also disrupting the nearly $1 trillion US packaged food market.”

A new driver: the climate emergency. As the carbon footprint of legacy meat production becomes more glaring, even Big Food is hedging. The entrepreneurs are getting ahead of the curve. Shifting to a plant-rich diet, for example, is one of the top five carbon-reducing solutions on the Project Drawdown list of solutions to reverse global warming. How much carbon does a Beyond Burger avert? Beyond Meat commissioned the University of Michigan to calculate the impact. The reported totals: the ‘Beyond Burger’ generates 90% less greenhouse gas emissions, requires 46% less energy, has more than 99% less impact on water scarcity and 93% less impact on land use than a quarter pound of U.S. beef.

Other markers of the food disruption:

  • Sustainable edge. More than $1.45 billion was invested across 247 U.S. food and beverage deals in 2018, according to Food + Tech. Investors are seeking to add value as deals become more competitive. CircleUpprovides introductions, as well as its machine learning platform. Wild Ventures has assembled an investor syndicate of wellness influencers to drive direct sales. Others are specialists: New Crop CapitalPowerplant Ventures and Stray Dog Capital have built portfolios focusing on alternatives to meat, seafood and dairy. The 800-pound burger in the room: Impossible Foods, which raked in $114 million.
  • Protein shakes. Dairy and animal-based protein alternatives attracted almost $400 million, or one-third of all food and beverage investment. “The economic, environmental and health benefits associated with a plant-centric diet has enabled startups to gain traction,” Williams said, citing plant-based yogurt (Kite Hill), seafood (Ocean Hugger Foods) and dairy (Perfect Day). Beyond Meat’s blockbuster IPO raised the stakes (see, “Philanthropic investors multiply their impact assets with Beyond Meat’s IPO).
  • Unsweetened. Per capita sugar consumption declined to a 30-year low, says the U.S Dept. of Agriculture. Trend-spotting startups include SpindriftKoiaQuest Nutrition and Halo TopPepsi has launched its own sparkling water brand.
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Dealflow: Follow the Money

German mobility company FlixBus closes $560 million for global expansion. FlixBus launched in 2013 after the deregulation of Germany’s bus market. It aimed to improve connectivity between smaller cities and towns with a tech platform that connected small and mid-size regional operators into Flix’s network of inter-city bus routes. Flix’s service now covers 2,000 routes in 29 countries; the company is piloting all-electric long-haul lines in France and Germany. Flixbus has secured nearly €500 million ($561 million) to expand in the U.S., Latin America and Asia and lay groundwork for a train network in Europe, as well as a ride-sharing service. The deal values Flix at about €2 billion, Reuters reports. Growth-stage private equity firms TCV and Permiraled the funding round. HV Holtzbrinck Ventures, the European Investment BankGeneral Atlantic and Silver Lake also backed the round. Read on.

SteamaCo raises $5 million for off-grid energy monitoring. Off-grid solar electricity has brought power to more than 360 million people since 2010. U.K.-based SteamaCo wants to accelerate access to mini-grids in the most remote locations with energy metering that works without internet connectivity. Power operators can monitor household and business energy usage via long-range wireless networks and add payment services to allow customers to pre-pay via mobile phone. SteamaCo’s reach is small so far, with tens of thousands of customers in Africa and India. Its $5 million Series B funding came from Praetura Ventures and Shell New EnergiesCheck it out.

VertoFX raises €1.9 million for cross-border payments in emerging markets. Most banks and cross-border payment services process only a few commonly-used currencies. The London-based Y Combinator graduate was founded with African businesses in mind, aiming to make it cheaper and easier to send and receive payments in illiquid or infrequently traded currencies.

Onward secures $1.5 million to expand ride hailing service for seniors. The company is focused on transport and assistance for people with care needs. One example: its drivers are paid by the hour, so they can wait for customers at appointments and running errands.

Agents of Impact: Follow the Talent

ImpactAlpha is hiring: Director of Growth. Subscription revenues from passionate Agents of Impact have pushed ImpactAlpha past a crucial milestone: financial sustainability. Our new Director of Growth will drive subscription marketing to increase conversions and grow recurring revenues so we can serve such agents even better. Join ImpactAlpha’s team (and spread the word).

Saadia Madsbjerg steps down as head of innovative finance at Rockefeller Foundation and Lorenzo Bernasconi steps in as the program’s interim head… Open Society Foundations is hiring a deputy director of impact investing in London… New Energy Nexus is hiring an operations associate for clean energy investing in Opportunity Zones… There’s still time to register for Council on Smallholder Agricultural Finance’s webinar today at 10am ET… Applications are open for the Singapore-based agri-foodtech accelerator GROW (from AgFunder and Rocket Seeder).

– July 24, 2019