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Family money meets the challenge of climate change

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Family capital is playing a big role in developing innovative ways to deal with climate change. A good example of this is how prominent families are co-investing with entrepreneurs and institutional capital to develop low carbon food alternatives. And in the mix, these investors are making a lot of money.

Although institutional money is moving into the sector, most notably some big food companies, a lot of the startup and development capital for groups like Beyond Meat is coming from wealthy families and entrepreneurs

Uber’s initial public offering may have tanked this week, but Beyond Meat’s stock market debut a week before became one of the best performing first-day IPO in nearly 20 years. It closed the first day on NASDAQ at 164% above its IPO price. All of its investors are no doubt very happy. Not only that, they are backing a company that ticks all the right boxes when it comes to dealing with the ever-pressing issue of climate change.

Beyond Meat is among a growing number of companies making plant-based meat substitutes and cultivated meats – meat and fish grown in the lab rather than reared on the hoof, or at sea. Other prominent companies in the sector include plant-based Impossible Foods, and cultivated meat/fish groups Memphis Meats, SuperMeat and Finless Foods.

All these groups are making food substitutes that will help to lower carbon emissions. Their products also have other benefits like improving animal welfare and potentially helping the dietary intake of consumers.

Since one of the biggest sources of carbon emissions is livestock farming, plant and cultivated meat/fish producers are a big part of the global effort to slow down/reverse climate change. And given the growing importance of finding solutions to global warming, these companies are becoming very valuable, as the Beyond Meat IPO shows.

Although institutional money is moving into the sector, most notably some big food companies, a lot of the startup and development capital for groups like Beyond Meat is coming from wealthy families and entrepreneurs.

Backed by Gates Ventures, a venture group owned by Bill Gates, Beyond Meat was also funded by a number of America’s richest families. These included the family office of Gigi Pritzker and  Michael Pucker, DNS Capital; a trust linked to Gary Lauder, a member of the Lauder family who own Estee Lauder; Lukas Walton, who is a member of the Walton family, the owners of Wal-Mart; and the Swartz family, who were the founders of the Timberland shoe brand and company.

Beyond Meats has also been backed by notable entrepreneurs, including a trust linked to Jack Welch, the former CEO and chairman of General Electric, Steve Cohen, a well-known hedge fund manager, and Seth Goldman, the CEO of Honest Tea.

Gates Ventures has also backed Impossible Food, which raised earlier this week – no doubt on the back of Beyond Meat’s success – $300 million in a Series E funding round. Other notable backers of the San Francisco-based plant meat maker are Serena Ventures, the investment group of Tennis ace Serena Williams, and Horizons Ventures, an investment group owned by the hugely successful Hong Kong-based entrepreneur Li Ka-shing.

Memphis Meats has also attracted the interest of Gates, as well as the family office of Carl Westcott, a US-based entrepreneur, Richard Branson, the UK-based entrepreneur and founder of the Virgin Group, and KBW Ventures, a private investment group owned by Khaled bin Alwaleed bin Talal, the son of arguably Saudi Arabia’s best-known investor, Prince Al-Waleed bin Talal.

These companies in the alternative food sector will help to determine better environmental and welfare outcomes, which most would say is a good thing for the world. Family and entrepreneur capital is playing a big role in making this happen.

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