Pandemic won’t stop Impossible Foods – $500M new funding for Impossible’s R&D, retain expansion, next-gen products

“I’m Possible” is even in Impossible Foods name and right now when so many things seem impossible, they are proof that even in a global pandemic, good things can still happen. Having just secured $500 million dollars in fresh funding, despite the global turmoil triggered by the coronavirus, they are showing anything is possible indeed.

In today’s Digest below, get the details on who’s behind the $500 million in new funding, what it will be used for, how the Impossible Foods CEO is managing the $4 billion startup from home during the coronavirus pandemic, what changes they have made to their business during this COVID-19 challenge, and more.

Who’s behind the money

Impossible Foods secured approximately $500 million in its latest funding round, led by new investor South Korean-based Mirae Asset Global Investments, with participation from existing investors including Silicon Valley-based Khosla Ventures, Hong Kong-based Horizons Ventures, and Singapore’s Temasek, showing heavy support from Asia which makes sense considering Impossible Foods plans to expand further internationally particularly in mainland China.

But what’s most interesting is the wide variety of individual’s names in addition to the usual global institutional investors. Impossible Foods’ new and existing individual investors include Jay Brown, Common, Kirk Cousins, Paul George, Peter Jackson, Jay-Z, Mindy Kaling, Trevor Noah, Alexis Ohanian, Kal Penn, Katy Perry, Questlove, Ruby Rose, Phil Rosenthal, Jaden Smith, Serena Williams, will.i.am, and Zedd.

The latest “Series F” equity funding round closed the week ending Friday March 13^th. The industry-leading food-tech startup has raised nearly $1.3 billion since its founding in 2011. According to Reuters the company is valued at about $4 billion.

What will funds be used for?

Impossible Foods will use the funds in part to invest in fundamental research and innovation; accelerate its manufacturing scaleup; expand its retail presence and its availability in key international markets; and accelerate commercialization of next-generation products including Impossible Sausage Made From Plants and Impossible Pork Made From Plants.

Scaleup Accelerates

The new funding closely follows the launch of the company’s latest next-generation products, Impossible Sausage and Impossible Pork. Demand for the company’s flagship product, the Impossible Burger, continues to be strong, with new and existing strategic partners eager to bring plant-based meat to their customer bases.

Burger King continues to sell its Impossible Whopper at its more than 7,000 U.S. locations, saying the menu item has exceeded expectations and continues to attract new guests. DoorDash, the nation’s largest on-demand door-to-door delivery service, launched a dedicated Impossible Cuisine category to highlight merchants that offer Impossible menu items.

Impossible Burger experienced an unprecedented sales surge in 2019. As a result, the company more than quadrupled production at Impossible Foods’ manufacturing facility in Oakland, Calif. and at multiple plants owned by co-manufacturing partners.

Earlier this month, as part of its aim to compete against animal-derived meat in every way that matters to consumers, including affordability, Impossible Foods lowered its prices to US foodservice distributors by 15% on average, passing along savings achieved through economies of scale. Driving down prices is key to the company’s mission of eliminating the need for animal agriculture by 2035.

Reaction from the stakeholders

“Our mission is to replace the world’s most destructive technology — the use of animals in food production — by 2035,” said Dr. Patrick O. Brown, M.D., Ph.D., founder and CEO of Impossible Foods. “To do that, we need to double production every year, on average, for 15 years and double down on research and innovation. The market has its ups and downs, but the global demand for food is always there, and the urgency of our mission only grows. Our investors not only believe in our mission, but they also recognize an extraordinary opportunity to invest in the platform that will transform the global food system.”

“With this latest round of fundraising, Impossible Foods has the resources to accelerate growth – and continue to thrive in a volatile macroeconomic environment, including the current COVID-19 pandemic,” said Impossible Foods’ Chief Financial Officer David Lee.

Business Update during COVID-19

COVID-19 is on everyone’s mind lately but Impossible Foods is based in California – one of the hardest hit states so far – so they have taken aggressive measures to prioritize the health and safety of its employees since the onset of the COVID-19 outbreak, including:

• mandatory work-from-home policies for all workers who can conceivably telecommute, through the end of April;
• stringent restrictions on external visitors to company facilities and those of co-manufacturing partners;
• a ban on virtually all work-related travel and events, both domestic and international;
• and daily sanitizing, disinfecting and deep cleaning of all workplaces to ensure the strictest hygiene standards and utmost safety.

Impossible Foods meets or exceeds all guidelines set forth by the world’s leading public health agencies and continuously consults with experts in the public and private sector. The company’s COVID-19 task force closely monitors the global, national and regional situation, updates workplace policies and provides real-time, transparent information to employees, suppliers, customers and all stakeholders.

“Our No. 1 priority is the safety of our employees, customers and consumers,” Dr. Brown said. “And we recognize our responsibility for the welfare of our community, including the entire San Francisco Bay Area, our global supplier and customer network, millions of our customers, and billions of people who are relying on food manufacturers to produce supplies in times of need.”

Impossible Foods Inc. Chief Executive Pat Brown is setting an example by working from his Stanford, California condominium.

Genetically engineered challenges

Also this past week, the approval of genetically engineered soy protein for ‘Impossible Burger’ was challenged. “The Center for Food Safety has asked the Ninth Circuit U.S. Court of Appeals to review a Food and Drug Administration decision to approve soy leghemoglobin as a color additive for use in ground beef analog products,” according to Food Safety News. “The advocacy group claims that the FDA’s decision was not based on “convincing evidence” that is required by regulation.”

“The FDA approval of a genetically engineered (GE) soy protein used in the” Impossible Burger” over objections by CFS. The ingredient is also referred to as genetically engineered “heme,” soy leghemoglobin. It is the color additive Impossible Foods uses to make its plant-based burger appear to “bleed” as if it were real beef.”

According to Food Safety News, “the March 17 civil action by CFS asserts that FDA used the wrong legal standard when it reviewed and approved GE heme to be used in raw Impossible Burgers sold in grocery stores. Instead of using the color additive safety standard that specifies “convincing evidence that establishes with reasonable certainty that no harm will result from the intended use of the color additive,” FDA conflated that standard with the food additive safety standard, which does not specify that there must be “convincing evidence.”

Bottom Line

Regardless of the genetically engineered challenge in court, we see a bright future for Impossible Foods. Even in a world turned upside down, they are demonstrating that things are possible, that getting $500 million in new funding isn’t off the table, that they can adapt to changing health and safety priorities, that their CEO can run a $4 billion company out of a child’s bedroom. There is hope indeed.