GrainRus, a Russian importer and producer of raw materials for the brewing and dairy industry, has become a limited partner (LP) of a Hong Kong and US-based foodtech fund.
Lever VC was launched in 2018 to invest in the alternative protein space. Its team includes early investors in Beyond Meat, Impossible Foods, Memphis Meats and other category leaders. These experts tout themselves as having “deployed over $1.5 billion in VC/PE investments, including over 50 early stage alternative protein deals.”
The fund tracks “over 1,300 plant-based and cultivated meat and dairy companies across the globe”, investing only in “the best of the best.”
GrainRus’s contribution (the amount of which was not disclosed) came as part of a close of $46 million announced in mid-April. The fund is now planning its final close, in the $65 million-$70 million range, by next June.
Asked whether the Russian origin of an LP could create risks in terms of image or legal compliance, Lever VC’s founder Nick Cooney told East-West Digital News it was “not a concern.”
“Even though I am personally based in the USA, Lever VC as an entity is domiciled in the Caymans with its central office in Hong Kong,” he explained, suggesting there were no such risks there, or less than in the USA.
“Aside from these geographic nuances, we’re proud to have as LPs and partners companies like GrainRus that see the financial opportunity and benefits of alternative protein — including better public health, lower carbon emissions, and so on. In addition to having Russian LPs as investors, we are also investing in Russian companies in this sector,” Cooney said, referring to the fact that GrainRus will help the fund scout Russian startups.
“Huge Russia opportunity”
Russia’s plant-based meat sector, and for alternative protein more generally, offers “huge opportunity,” he added. ”The same consumer trends toward health and sustainability can be seen in Western Europe, North America, China and in Russia as well.”
The US investor cited the example of plant-based milk, which has been quickly growing in availability and popularity in Russia for the past few years. “This gives a pretty clear indication of what we will likely see on the plant-based meat side as well. Now that there are starting to be good-tasting and well-marketed brands available, that in combination with the increasing consumer awareness should lead to high annual growth rates for a good number of years to come.”
When it comes to the higher tech side of alternative protein, “obviously Russia has a lot of very talented scientists that can figure out novel solutions, for example to create cultivated meat (produced from animal cells without the need for live animals) cost-effectively.”
Cooney cited the case of KFC Russia and Skolkovo startup 3D Bioprinting Solutions, whose partnership made the news last year with plans to produce lab-produced chicken nuggets using a 3D bio-printer.
GrainRus is not the first Russian agroindustrial group to invest in the venture space. In 2019 Efko, another Russian major in this industry, launched a $50 million corporate venture fund targeting early-stage foodtech startups.
