Canadian fund EatBeyondGlobal vies for investor attention with Agronomics

London listed Agronomics isn't the only investment fund focused on the burgeoning food tech space. UK investors might also want to investigate a listed Canadian rival called EatBeyondGlobal, which is also building a diverse portfolio of earlier-stage private businesses.

UK investors interested in the fast-growing foodtech space probably can’t help but have noticed the dizzying growth in the share price of AIM listed investment vehicle Agronomics ticker ANIC. The venture capital focused fund, targeting mainly but not exclusively at earlier stage businesses in the cultured meat alternatives space, has seen its share price more than double in the last three months, increasing from 12p at the end of 2020 to the current 28p.

 As with all small cap stocks, its sometimes hard to work out what is driving the share price up so quickly, but our guess is that there are a bunch of factors at work.

What has certainly helped is that Agronomics founder and director Jim Mellon has been pro-actively touring various media outlets publicising his new book Moo’s Law. But other factors are also at play, not least the general push towards growth-oriented tech stocks and the rise of SPACs – more than a few firms in this space such as AppHarvest and AeroFarms have made the leap from private into the public markets via blank cheque SPACs. Combine all these factors together and you have a classic momentum trade with few available investment fund vehicles for investors to put their money to work in.  

But there are alternatives to Agronomics if you are looking for a diversified portfolio of earlier stage businesses, chief amongst them Canadian listed investment vehicle EatBeyond Global. This fund also came to the public markets – like its peer Agronomics – late in Q3 2020, raising money to invest in a more diverse portfolio of foodtech businesses than Agronomics. The latter fund has a strong focus on what used to be known as lab grown meat alternatives whereas EatBeyond Global has a much wider focus which includes plant based protein alternatives. Agronomics has tended to avoid too much focus on these plant-based alternatives believing that there is greater upside in the intellectual property bound up in cultured meat technologies. By contrast EatBeyond is happy to invest across the space, putting money to work in both plant based proteins and cultured meat, as well fermented ag, plus CPG and brands.  

Fund basics:

• Ticker CSE: EATS
• Shares outstanding : 19.133 m (including special warrants)
• Share cap around C$38m
• 15-20 key equity-linked investments in a range of $1-10M over the initial 48-month deployment period with a minimum ownership goal of 5%+
• Eat Beyond is the first issuer of its kind in Canada, providing retail investors with the unique opportunity to participate in the growth of a broad cross-section of opportunities in the alternative food sector, and access companies that are leading the charge toward a smarter, more secure food supply. Invests in seed rounds through Series A and B with early sales traction
• Eat Beyond began trading on November 17, 2020
• Share price: C$1.95

Our hunch is that it’s probably too early to draw too many conclusions about how the portfolio of investments is doing  but below we’ve tried to pull together the latest list of portfolio companies, with some updates on how those investments are going so far.  

• The Very Good Food Company (old name Very Good Butchers). Eat Beyond’s investment was at a price of $0.25 per common share in early 2020. This is already listed on the Canadian stockmarkets.

• Sire – a CPG life science company focused on the plant-based foods and supplements industry. Its products are segmented into three areas: sports nutrition, plant fuel, and plant-based protein. SIRE recently acquired PlantFuel, Inc

• Plant Power Fast Food is known as an innovator in the Quick Service Restaurant (“QSR”) field with its 100% plant-based offerings and biodegradable packaging

• Zoglo’s offers kosher, plant-based products for over 25 years and is now ready to enter the mainstream market. It has a product selection of over 14 plant-based protein offerings

• Nabati  - is a fast-growing food tech company offering whole, natural, plant-based foods for health-conscious consumers. Recently closed an oversubscribed $7.7 million private placement, and has restructured with plans to go public

• Above Food develops and distributes premium, whole plant alternatives to meat and dairy by creating delicious, nutrient dense consumer products and branded ingredients

• SingCell is building a scalable clean meat manufacturing platform in Singapore to enable global alternative meat companies address APAC and global markets EatJust

• Singapore based TurtleTree Labs is the first biotech company in the world with the ability to create milk from all mammals

• Good Natured is producing and distributing one of North America’s widest assortments of better everyday products made with the highest-possible percentage of renewable, plant-based materials and no BPAs (bisphenol A), phthalates or other chemicals of concern potentially harmful to human health and the environment. Also known as ProductsInc. good natured has established a distinct presence in the market by offering nearly 400 earth-friendly, plant-based products free from chemicals of concern. The plant-based offering simplifies the switch to a sustainable lifestyle for businesses and consumers who can choose affordable, environmentally conscious products and packaging to minimize their waste footprint. Eat Beyond purchased a stake in good natured  in November 2020 at $0.14 per share with each share receiving one-half warrant at $0.21. On March 4, 2021, good natured® announced gross proceeds of $23,115,000 from a short form prospectus offering of common shares at an issue price of $1.20 per common share. This represents an increase in the value of Eat Beyond’s stake in good natured® of over 800%.

• Eat Just: the first company in the world to have its cultured chicken product approved for sale and probably the best known business in the portfolio. Eat Just Inc. has completed a $200 million (USD) funding round. Eat Just has raised more than $650 million since its founding in 2011 and has earned a valuation of more than $1 billion. Eat Just applies cutting-edge science and technology to create healthier, more sustainable foods. The company's expertise, from functionalizing plant proteins to culturing animal cells, is powered by a world-class team of scientists and chefs spanning more than a dozen research disciplines. Eat Just’s products are available at 20,000 retail points of distribution and 1,000 foodservice locations.  The $200 million funding round was led by the Qatar Investment Authority (QIA), the sovereign wealth fund of the State of Qatar; joined by private investment firm Charlesbank Capital Partners and Vulcan Capital, the investment arm of the estate of Microsoft co-founder and philanthropist Paul G. Allen.

One observation we would make is that after an initial growth in EatBeyond’s share price to a high of C$4  a share in late January, the funds share price has drifted sharply lower in recent months to the current level of C$1.80 a share. By contrast, Agronomics share price has pushed aggressively higher and is now near its all-time highs of 29p a share. Given how early-stage both funds are, we’d leave readers to draw their own conclusions about the contrasting trajectories  - both funds largely invest in a similar space and have been on the public markets for a similar amount of time.