The Series B round into Nature’s Fynd (formerly Sustainable Bioproducts), which follows a $33m Series A round in February 2019, was announced days after Impossible Foods (which currently generates the vast majority of revenues from restaurants) unveiled a $500m funding round.
It was led by Breakthrough Energy Ventures (a $1bn fund backed by high-profile names from Bill Gates, Mike Bloomberg, Richard Branson and Jeff Bezos to Mark Zuckerberg); and sustainable investment firm Generation Investment Management LLP (chairman: Al Gore), and supported by other backers including ADM Ventures, Danone Manifesto Ventures, 1955 Capital, and Mousse Partners.
'We have the opportunity to introduce products across both meat and dairy categories'
The plan is to launch as a consumer brand ('Nature's Fynd') this year, said chief marketing officer Karuna Rawal, who was speaking to FoodNavigator-USA after opening a 35,000-square-foot manufacturing facility in Chicago’s meat packing district dedicated to growing its new fungal food source, dubbed 'FY.'
Finished products containing 'FY' - from animal-free cream cheese, chicken nuggets, beef sliders and pork dumplings, to chocolate mousse - will be manufactured by co-packers using Nature's Fynd recipes, she said.
"We have the opportunity to introduce products across both meat and dairy categories, and beyond that we have a pipeline of many more products that we will bring to market at the right time. Right now, we're having conversations with retailers to align on our first few products to go to market."
Whole food ingredient with 50% protein, vitamin B12, vitamin D, iron, and calcium
Unlike some other startups using microbes to produce protein such as Perfect Day, Clara Foods and Motif FoodWorks, Nature’s Fynd is not using genetic engineering (eg. synthetic biology to ‘program’ microbes to produce target molecules).
Instead, it is working with ‘extremophiles’ - fungal strains that can survive in extreme environments such as the volcanic springs at Yellowstone National Park - that naturally produce high levels of complete protein when grown in a controlled environment.
Rather than extracting the protein to make a concentrate or isolate, it is producing a whole food ingredient containing 50%+ protein, plus fibers, oils, and desirable micronutrients including vitamin B12 (highly desirable in a vegan protein), vitamin D, iron, and calcium.
Regulation and labeling
A GRAS determination for the ingredient has already been put together, and will be sent to the FDA shortly, said CEO Thomas Jonas, who said he had been working closely with regulators to understand what they were looking for in such a determination.
As for labeling, it's still being finalized, but 'FY' would likely appear on the ingredients list as 'Fusarium Yellowstonensis' [inspired from Yellowstone National Park, where it was discovered] in the same way that you might see a strain of probiotic bacteria listed on pack, he said.
"We'll be very transparent about what it is, a microbial fermented protein."
So could FY be described as 'plant-based'? "It depends on regulations in different geographies," said Jonas, who said a suite of patent applications had been filed to protein the company's innovations, "but it's not a plant or an animal; it's fungi, the third branch of life."
Complete protein
FY has a mild and bland taste and light color, all the essential amino acids and a PDCAAS score very close to that of animal protein, making it suitable for multiple food applications including plant-based meat, said Jonas. "It's a complete protein, which is going to be a more and more valuable claim [in the 'alternative protein'] industry."
"The name of the organism is Fusarium Yellowstonensis so we decided to call it 'FY' and then to call the company Nature's Fynd because we literally found it in nature.
"It's been great to see the rise of plant-based products, but there has also been some criticism over the level of processing. We have a very minimal amount of processing because we're harvesting a product that is already moist and textured. And we're growing this in the City limit of Chicago with minimal environmental impact."
'Found in nature'
A survey of 7,000 US consumers suggested that the 'found in nature' aspect to FY was particularly appealing, coupled with the attractive nutritional story, said Rawal. "It's a complete protein, highly digestible, cholesterol-free, with fiber and vitamins and minerals. But people also like the fact that it's versatile and sustainable."
Microbes are exponentially more efficient than animals and many plants at producing protein
Right now, producing protein – whether from peas and soybeans or cows and chickens – is resource-intensive and time-consuming, requiring large amounts of land, energy and water, observed Jonas. It takes years to grow animals, and months or years to grow plants, he said.
“Microbes can double [their biomass] in a matter of hours and the ‘growing season’ is 24 hours a day, seven days a week, 365 days a year.”
What makes ‘extremophiles’ alluring as a potential food source is that they have evolved to do more with less – that is, they can produce high quality protein with minimal inputs very efficiently in a highly acidic environment, which “drastically reduces” the risk of contamination and enhances food safety, claimed Jonas.
Finding more efficient sources of high quality protein is rapidly becoming a top priority for leading food companies and investors, explained Jonas, who teamed up with Mark Kozubal, a geomicrobiologist at Montana State University, in 2014 with a view to developing biofuels, but realized there was more commercial potential in food.
“Nature’s Fynd has a highly efficient solution to help address the climate crisis. We have tracked the team and technology for several years and believe this is one of the most scalable platforms to drive true food system sustainability.”
Lila Preston, co-head of growth equity strategy, Generation Investment Management
“As global demand for protein increases, we urgently need new solutions that meet our nutritional needs without further damaging the environment.”
Carmichael Roberts, founder and managing partner, Breakthrough Energy Ventures
Microbes: 'Pretty damn efficient'
“There is this growing realization that microbes are pretty damn efficient. They make great protein and they do it really fast, you don’t have to plant a seed and harvest it six months later, and you can completely control the environment.
“There is a revolution going on in protein production and in the future I don’t think people care if the ‘cells’ are from cows or microbes. No one is attached to killing cows, as Pat Brown would say [the founder of plant-based meat co Impossible Foods], they just like the meat.”
Thomas Jonas, CEO, Nature’s Fynd, which has recently made some high profile hires including Karuna Rawal (an ex Leo Burnett exec) as chief marketing officer; former Kraft Foods CEO Tony Vernon (who has joined the board); and Cargill exec Jim Millis (as CTO).
