Impossible Foods — investment in analog Beyond Meat
Stage investment Pre-IPO. The expected profitability is about 100%.
About the company
Impossible Foods is developing a new generation of vegetable-based artificial meats and cheeses. The company gathers up specific proteins and biologically significant elements from greens, seeds, and grains and thus recreates meat and dairy products.
Impossible Foods has a mission - to make food enjoyment safe for human health and the environment by removing animals from the production chain.
Impossible Foods was founded in 2011 and is based in Redwood City, California, USA. The Impossible Foods burger is on the menu of more than 9000 restaurants and is a sales leader in many of these establishments. Since the launch of Impossible Burger 2.0 in January 2019, the company's revenue has grown by 50%.
According to Barclays analysts, the segment of meat analogs, including those reconstituted based on vegetable protein in laboratory conditions, can make up 10% of the global meat market, estimated at $ 1.4 trillion, and will grow into an industry worth $ 140 billion over the next 10 years.
The U.S. Food and Drug Administration has approved a key ingredient, a plant-based blood simulator, that gives the Impossible Burger a beef-like appearance and taste. This happened on August 2019. The company will finally be able to begin selling the product directly to consumers from September 4 this year.
As soon as Burger King fast-food chain said, that start a sale of vegan burger Impossible Foods from Impossible Foods nationwide the USA after completing the experiment in select restaurants.
Impossible Foods faces fierce competition from various firms, including animal meat producers and other vegetable protein brands.
Low liquidity: there is a high probability that with an early exit, the process of selling shares will take more than 1 month.
Information asymmetry: management and current investors have access to more internal information about the company than other market participants.
Finance and valuation
Impossible Foods investors include Bill Gates, Jay-Z, Katy Perry, Serena Williams, the Peter Thiel Founders Fund, Khosla Ventures, Google Ventures, Horizons Ventures, UBS and Viking Global Investors.
Impossible Foods has raised $750 million since its inception and was valued at $2 billion in the last investment round in May 2019. The current market capitalization of its closest competitor Beyond Meat is $10.7 billion (as of August 5). Impossible Foods shares are now trading at 35 dollars per share, which implies an estimate of $6.3 billion. The expected return on investment is about 100% if we consider the rapid growth rate of this market.