Bill Gates and CowTech: Fix or replace our friends in the pasture?

We think the world is entitled to know if Bill Gates is for the cow or against the cow.

Add or Modify?

Cow-lovers can take heart in this report from TheWeek.com about the Bill Gates Super Cow, which begins:

BBC reported Friday that the Bill and Melinda Gates Foundation will invest millions of dollars to promote “the health and productivity of livestock” through research by Global Alliance for Livestock Veterinary Medicines. “For over a billion people living in the world’s poorest countries, agriculture and livestock are a lifeline out of poverty,” Gates said Friday. “You can sell the output, and that’s money for school fees. You can keep the output, and that’s diet diversification.”

It’s a follow-on of sorts from the $42M that the Foundation poured into Heifer International in 2008 (more about that here.)

Or there’s the cow perfume that addresses malaria. Really. Read about it here.  But here’s the flip side: a whole bunch of investments in cow replacement.

Shift-Command-H: Find and Replace

Earlier this year Memphis Meats announced an investment from the venture capital arm of food industry leader Tyson Foods. Memphis Meats is a leader in the growing ‘clean meat’ or ‘cultured meat’ field, which focuses on producing real meat directly from animal cells, without the need to raise or process animals. The terms of the investment were not disclosed. Tyson Foods joins a diverse group of investors in Memphis Meats, which includes Bill Gates, Richard Branson and Cargill to continue developing delicious products, to accelerate its work in scaling up clean meat production, and to reduce production costs to levels comparable to – and ultimately below – conventional meat costs.

The point of Memphis Meats is to, uh, replace the cow.

“We’re going to bring meat to the plate in a more sustainable, affordable and delicious way,” explains Uma Valeti, M.D., co-founder and CEO of Memphis Meats. “The world loves to eat meat, and it is core to many of our cultures and traditions. Meat demand is growing rapidly around the world.  We want the world to keep eating what it loves.”

Memphis Meats has already produced beef, chicken and duck directly from animal cells, without the need to raise and slaughter animals. The round was led by DFJ, a leading venture capital firm that has previously backed Tesla, SpaceX and Skype.

And as we reported last August, Impossible Foods closed a $75 million investment round after achieving significant milestones in intellectual property and food safety. The Singapore-based investment company Temasek led the round that was joined by other investors including Open Philanthropy Project and Bill Gates.

And we might also point to our report earlier this year that Beyond Meat raised $55 million in a new round led by Cleveland Avenue, LLC, the venture capital firm founded by Don Thompson, former CEO of McDonald’s Corporation. The Beyond Burger is sold in more than 5,000 stores and these funds will more than triple the size of Beyond Meat’s production footprint, further fund the company’s R&D commitment to perfectly build meat from plants, and expand sales and distribution.

Tyson Foods increased their stake in Beyond Meat with this round, and Tyson et al join other notable investors including The Humane Society of the United States and Bill Gates in recognizing the value of plant protein as an alternative to animal sources for human nutrition.

So, which is it?

Well, really, the investments are about transforming our current relationship to agriculture, aren’t they? And, about scale. Clearly, meat isn’t going away very soon, the cow isn’t going away very soon. So, why not invest in sustainable transformation as well as replacement?

That’s an approach that was applied in 2015 to the energy space when 28 business leaders and organizations launched the Breakthrough Energy Coalition, with Coalition chairman Bill Gates stating that “The existing system of basic research, clean energy investment, regulatory frameworks, and subsidies fails to sufficiently mobilize investment in truly transformative energy solutions for the future. We can’t wait for the system to change through normal cycles.”

The Coalition manifesto

Technology will help solve our energy issues. The urgency of climate change and the energy needs in the poorest parts of the world require an aggressive global program for zero-emission energy innovation. The new model will be a public-private partnership between governments, research institutions, and investors. Scientists, engineers, and entrepreneurs can invent and scale the innovative technologies that will limit the impact of climate change while providing affordable and reliable energy to everyone. The existing system of basic research, clean energy investment, regulatory frameworks, and subsidies fails to sufficiently mobilize investment in truly transformative energy solutions for the future. We can’t wait for the system to change through normal cycles.

In short, we need replacement options for transport, but we also need transformation — and normal business cycles produce slow results. 

We might add, it took the petroleum industry 70 years to establish a scaled-up, interior pipeline from the Texas oil field to East Coast refineries — and, er, the United States government paid for it, lock stock and barrel, and gave them, for free, real estate easements you could safely value at $380 billion in today’s money — just in case you were wondering. And just in case you have been advocating that the US government ought to stay out of free markets like energy. 

So, acceleration for food and agriculture as well as energy. That’s what Gates is up to.

Couple of highlights from recent activity

Apeel Sciences. This startup is protecting plants pre- and post-harvest by converting plant waste into edible solutions for pest protection and shelf-life extension. Apeel Sciences, based in Santa Barbara, says its Invisipeel deposits a layer of unfamiliar molecules onto a plant pre-harvest that camouflages it from bacteria, fungi, and insects. Its Edipeel product works post-harvest to extend shelf-life by slowing water loss and oxidation.

Both products are tasteless and odorless and are made from plant waste, such as grape pressings, orange peels, tomato skins, watermelon rinds, and broccoli stalks.

Apeel founder Dr. James Rogers tells Food Tank the company was founded in 2012 with a grant from the Bill & Melinda Gates foundation. “We have a mutual goal of reducing hunger and poverty for millions of farming families and doing so in a sustainable way,” he says. “Our plant-based, edible solution to extending the lifespan of fresh food made Apeel a natural partner for the Foundation’s agricultural development program, which focuses on eliminating starvation and malnutrition in developing countries.”

Agricultural and Food systems

We reported last month that the European Union and the Bill and Melinda Gates Foundation will work together on a joint initiative to drive research and technical and organizational innovations across agricultural and food systems in developing countries.  More science and innovation is required to address some of the pressing challenges posed by climate change.

The Commission will provide EUR 270 million, over the next 3 years to foster a strong climate change focus in agriculture and food systems research for development.  The Bill and Melinda Gates Foundation will match this funding with a USD 300 million pledge over the same period to boost climate change related innovations through research in agriculture.

Given the size of the challenge and the need for urgent action, the European Commission and the Gates Foundation have started identifying priority investments towards putting research into use, fostering innovation in farming and food systems, and ensuring their climate relevance.

Digital Biology

Last month we shared with you a framework for a rising technology wave — we called it Digital Biology, the convergence of digital and biological technology waves that is changing genetics from an artisan’s niche into a branch of information technology. More evidence of the power of the Digital Biology wave arrived in mid-December with news that Ginkgo BioWorks closed a round of $275 million in additional funding including investors such as Viking Global, Y-Combinator’s Continuity Fund and Bill Gates’ Cascade Investment.

This brings the company’s total funding to $429 million, and we hear scuttlebutt that Ginkgo’s valuation has risen to over $1 billion.

Cellulosic sugars

In September 2016, we reported that Bill Gates is leading the latest investment round into the pioneering cellulosic sugars producer Renmatix as energy giant Total joins in with second investment and a 1 million ton per year license.

Protein-based biologic medications

In December 2016 we reported that the Bill & Melinda Gates Foundation provided a grant to DuPont Industrial Biosciences to create new production systems to enable affordable, protein-based biologic medications. To effectively manage outbreaks and provide affordable supply to people around the world, new approaches are needed for widespread production of high volume, affordable and rapid cycle time pharmaceutical proteins.

The Bottom Line

Transformation today, replacement tomorrow. That’s the investment thesis, in a nutshell. So, Gates wants better cow products today, and a world without cow products down the road. That’s pretty good news for the cow — and for the world, too.