Innovation in green proteins has become a hot target for investors, with many predicting that demand for healthy, environmentally friendly protein sources is set to skyrocket in the coming years.
Robert Vreeman set up Corpeq’s Green Protein Fund in early 2016. He was first inspired to get involved in start-ups while studying for his MBA at Stanford and saw what his peers were achieving with a more hands-on investment approach. The decision to focus on green proteins came later, from observing general trends in food and nutrition, and the venture capital fund is now keeping an eye on a database of about 150 Netherlands-based start-ups in the sector.
“I believe that if you want to be successful it certainly helps to be operating in a booming industry, where macroeconomic developments are driving the growth,” he said. “Combining the global population growth with the fact that researchers project an increased protein intake per capita makes it safe to assume that the global demand for proteins will continue to increase.”
There has been a boom in agtech investment over the past few years, with about $3.2bn of venture capital investment going into the global food and agricultural sectors in 2016, up from just $0.4bn in 2010, according to a recent AgFunder report. Much of this investment has gone into US companies, and Vreeman wanted to figure out how to translate the trend to Europe, and make it relevant to The Netherlands in particular.
“We are generally becoming more environmentally aware and people see that eating meat is not necessarily the best protein conversion,” he said. “It’s more efficient and sustainable to have your protein coming from plants.”
In addition, interest in health and nutrition has surged, more people than ever claim to be limiting their meat consumption – if not cutting it out altogether – and awareness of animal welfare issues has also increased. Many of the world’s most radical alternatives have come out of The Netherlands, from insects and lab-grown meat, to innovative extrusion technologies for more meat-like plant proteins.
The CQ Green Protein Fund aims to tap into these broad trends and has so far invested in two companies: The Dutch Weedburger, a seaweed-based burger company, and Duplaco, which produces energy efficient microalgae products for food and feed. Vreeman says the fact that the fund is family owned and has no predetermined exit requirements allows it greater flexibility and opens it up to the potential of sequential rounds of investment.
So what makes a company interesting to investors?
“For me, existing revenue is really important,” Vreeman said. “That’s credibility. There are already people who are willing to pay for your product.”
This should not be confused with having a product listed and in stores. While this might prove that your product is innovative, he said, it doesn’t necessarily prove that there is demand.
“The only thing that’s a proxy for demand is turnover of that product versus comparable products,” he said, but scaling up enough to boost turnover requires money.
“In order to get the money, they need to have the volume, and that’s the catch-22…That’s the role of venture capital, to give entrepreneurs the means to escape this catch-22.”
About Robert Vreeman
Robert Vreeman is founder and managing director of the CQ Green Protein Fund, which invests in sustainable health food companies leading the green protein transition. Previously, he was managing director of SanoRice Italy, subsidiary of the SanoRice Group, and later was the group’s CFO. He holds a Master’s degree in Mechanical Engineering from TU Delft and an MBA from Stanford.