The COVID-19 pandemic saw major spikes in interest around biotech ventures crafting alternative proteins, startups producing plant-based foods, and everything in between–including B2B supply chain and ingredient companies.
Today, doomsday headlines are asserting that food tech’s big wave is over. But is it? And what fueled venture capital’s interest in taking on and investing in global challenges like food security, anyway?
The power and impact each of us can have drive a lot of my investment decisions, alongside the very real potential for profit and global scale.
However, the boom of interest around alternative proteins was mostly driven by a widespread bandwagon mentality, most likely set off around the time The Economist declared 2019 “The Year of the Vegan.”
That cover story signaled a big shift in the alternative protein world. This was really the first time I saw investors outside of the usual suspects seek information about food technology. Skeptics were suddenly interested in what I had to say about the leaps in alternative protein science. More importantly, they asked, “How can we make money?”
Keep in mind, as an early investor in the sustainability movement I was a diehard believer that the then-nascent bioscience innovations would make it to market in a big way. The world needs protein–and we need affordable, scalable, and sensible ways to create it. The climate crisis is a daily reminder that our current food production methods are unsustainable. This includes pet food, too, and there are solutions for that.
The reason I care (so much so that I put my money where my appetite is) is that as the global population grows, the demand for animal-derived food products rises at a faster rate. If cows were classified as their own country, they would emit more greenhouse gases than any country except China.
One big flaw? The flavors coming out of Silicon Valley often forget the rest of the world’s tastebuds. Guess what? The rest of the world is poised to consume much more protein than North America. That’s one reason I invested in Black Sheep Foods, a food tech company producing plant-based sheep that plans to expand to other heritage meats.
Experts estimate to reduce three gigatons of emissions by 2050, we will need to cut annual beef and dairy consumption by 50%. That’s no small feat. Consumer adoption of alternative proteins is essential to tackle food security and fight climate change– challenges we all face regardless of country or diet.
My home country is Saudi Arabia. And as someone from a desert climate with challenges around the availability of arable land and freshwater reserves, I have seen how necessity breeds innovation: how it can transform what we think is possible and redefine what we think is normal.
As a venture capitalist, I am fortunate to meet the founders of mission-driven companies seeking to transform society by leveraging the power of tech and innovation. KBW Ventures recently invested in milk replacement company Eclipse Foods, a $40 million Series B round alongside visionaries like Seth Goldman and Alexis Ohanian, the founder of Reddit and Y Combinator, the world’s top tech accelerator.
Alternative protein companies are navigating a complex and fast-changing landscape. However, there is huge potential for those who persevere and succeed. The cultivated meat space could be worth $25 billion by 2030. We must incentivize entrepreneurs to tackle the inadequacies in our current food system and generate innovative approaches to feeding our global protein addiction. I am so confident about it that I doubled down and invested twice in Upside Foods, a U.S.-based company creating cultivated meats, and invested in BlueNalu, another U.S.-based company specializing in seafood.
There are so many strong brands out there in the food tech space. Try Tindle's alt-protein chicken–and read up on Melibio's honey made without bees!
Now that valuations are coming down (and you see more VCs holding onto their cashflow), there is an even bigger opportunity for the investors who are ready to get into this promising sector that will help alleviate the world’s biggest issue.
While I believe that answers (and the bulk of funding) are with the private sector, the public sector has an important role to play in incentivizing and supporting experimentation and ideation when addressing food and climate challenges. President Biden’s recently announced, “Executive Order on Advancing Biotechnology and Biomanufacturing Innovation for a Sustainable, Safe and Secure American Bioeconomy,” is widely understood to be championing the cultivated meat sector.
Saudi Arabia is implementing the Sustainable Agricultural Rural Development Program. The UAE has issued the National Food Security Strategy 2051. Both initiatives are designed to encourage and stimulate local food production through technology, regulation and investment. The next two UN Conference of Parties will be held in Egypt and UAE, and I believe this will further strengthen regional and international commitments to supporting, incentivizing, and financing a more sustainable food system.
Competitions like XPRIZE’s Feed the Next Billion (where I serve as an advisory board member) and the UAE FoodTech Challenge (where I serve as a judge) are helping to redesign the future of food.
To harness the power of a deeply connected global food ecosystem and to build the future of food, we need collaboration between governments, businesses, entrepreneurs, and academia–not meme stocks.
Consumers will embrace alternative food sources if they pass taste, price, and convenience tests. This isn’t a false boom or a social media-induced craze. Alternative protein is the solution we need. And whether or not the headlines agree, science and legislation are moving forward rapidly to allow companies to take these solutions to market.
If you can still eat chicken nuggets while lowering your carbon footprint and helping to secure the next generation’s future, why wouldn’t you? And for the impact investors who are still curious if they can make money in alternative protein, give me a call.
Prince Khaled bin Alwaleed bin Talal Al Saud is a venture capitalist committed to purpose-driven investments, a climate change awareness advocate, and a believer in the transformative power of mobilizing tech for good. KBW Ventures has invested in the following companies mentioned or alluded to in this article: Black Sheep Foods, Upside Foods, BlueNalu, Bond Pet Foods, and Eclipse Foods.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
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