Chinese impact investor Dao Foods launches alternative protein fund
Dao Foods Venture Fund 1 will support and invest in 30 alternative protein start-ups within the next three years
Cross-border impact investor Dao Foods has set up a new fund to support and invest in 30 alternative protein companies within the next three years.
Founded in 2018 by Tao Zhang and Albert Tseng, in collaboration with New Crop Capital and the Good Food Institute, Dao Foods aims to help entrepreneurs develop new plant-based meat and alternative protein products in China to reduce the consumer demand for industrial animal agriculture.
The investors believe that supporting talented entrepreneurs who are targeting the 400 million millennials in China with new plant-based proteins is a huge business opportunity with massive social impact.
Dao Foods: Foodtech focus
Dao Foods entered the market to introduce plant-based and clean meat in China.
The new fund builds on the creation of Dao Food’s new China-focused incubator programme. Launched in April in collaboration with New Crop Capital.
In addition to the founding members, the new fund is supported by Chinese venture capital firm Matrix Partners, family offices, and individual investors. Wayne Silby of the ESG-led investment management company Calvert Investments is also bucking the fund.
The fund will invest 500,000 Chinese yuan ($73,280) in each company selected by the incubator, reaching a total of 15 million Chinese yuan ($2.2 million) in the next three years.
Tseng argued that the growth seen in alternative protein sector in the US over the last few years will soon be repeated in China.
“We are excited to work with New Crop Capital, Matrix Partners and other visionary and impact-oriented investors to accelerate investment in China-focused entrepreneurs who aim to increase the availability of great-tasting plant-based and alternative protein products in China,” he said.
While the focus of the incubator is on China-based entrepreneurs, the new fund is open to overseas start-ups willing to tap into the Chinese market.
The selected start-ups will undergo a six-month accelerator programme on top of financial support.
In March, Dao Foods invested in an angel round for plant-based meat start-up Starfield. Based in Shenzhen, the company uses seaweed protein to create a range of beef and pork products as well as tofu. Five months later, Starfield raised $10 million in a Series A round.
This is the second fund to focus on alternative protein in China. Last week Lever China announced the completion of five seed investments by its first fund in partnership with New York-based venture capital firm Lever VC.
