Eat Beyond Global Investment Fund, a new investor looking to back companies offering alternatives to meat, seafood, dairy and eggs, is nearing its first deal.
Patrick Morris, the CEO of the fund, also known as Eat Global, said he was hopeful he could announce the first transaction “in the next 60 days”.
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Eat Global, created to provide retail investors with a chance to back companies along the supply chain for alternative protein, has two potential deals at “term sheet” stage.
“One of them’s doing about a raise as a Series B. They’re in 6,000 stores in the US, on the meat side of things. They’re led by an investment group called New Crop Capital,” Morris told just-food.
The other possible transaction for which term sheets have been signed features US-based egg-free products supplier Just, Morris said.
“That’s another example of something that’s on the table but, again, we’re not making decisions this minute. It’s going to be a very strict process where we make one decision at a time,” he added.
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By GlobalDataJust declined to comment when approached by just-food.
Eat Global, which plans to list on the Canadian Securities Exchange and on the Frankfurt Stock Exchange later this year, is in the midst of its initial fundraising.
“We’re raising from CAD5-7m (US$3.8-5.3m) initially. We’ve had more interest than we had anticipated,” Morris explained. The fund is reviewing another possible eight transactions.
“There’s not a lot of opportunities for retail investors to get involved market-side. That’s how the idea for the fund come up,” Morris added.
Eat Global has set up a four-strong “investment committee”, which includes Lloyd Lockhart, the founder of Canadian grocer Choices Market, and Diane Jang, a CPG industry veteran who has held roles including president at Canada-based tofu business Sunrise Soya Foods and CEO of hemp-food supplier Hempco Food and Fiber.
“It’s a group decision, an informed decision on making one investment at a time and making sure those are good investments into the space,” Morris said.
Eat Global is looking to make up to 20 equity investments of CAD1-10m over a four-year period. The fund aims to own at least 5% of the businesses in which it invests.
“We need to see how it goes as well. I think the category’s looks like it’s in sort of a boom mode, in which case we’ll deploy the capital through eight to ten companies and then, from there, we’ll move into when they raise additional capital of up to CAD20m to grow, increase the fund and get more involved,” Morris explained. “Part of our M.O. as well for helping these companies that we invest in is in some cases we’ll take a board seat on the company and use our investment committee to their full potential to ensure that these investments are going to go in the right direction.”
Eat Global has indicated around 40% of its funds would be spent on “food tech”, with a further 30% on “CPG” companies offering products. The firm does expect overlap between the two areas.
Morris said: “Food tech I would say is a little more along the lines of cellular architecture and things like developing animal protein without the animal. That’s an example of food tech we’re looking at. That’s another reason why we’re looking at Just because they’ve got a cellular structure technology for wagyu beef, as well as chicken, poultry.”
Asked if there were particular countries in which the fund was looking to focus where it makes its investment, he added: “We are a global fund so it just means we’re leaving ourselves open to any jurisdiction that makes sense and any company that looks like it’d be a good investment for our investors. We don’t want to stick just to Canada, or the [United] States.”
