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Temasek-backed Impossible Foods is in fresh funding talks

A banh mi sandwich made with a plant-based Impossible Pork patty at the Impossible Foods headquarters in Silicon Valley, San Francisco, December 19, 2019. (PHOTO: REUTERS/Richa Naidu)

(Bloomberg) -- Impossible Foods Inc., maker of the eponymous soy-based burger, has been in talks with investors about raising more funds after receiving excess demand for a US$500 million funding round in March, according to people familiar with the matter.

The firm has held initial talks with potential investors including some Chinese funds, said the people, who asked not to be identified because the information is private. The discussions come as a potential meat shortage is bringing attention to substitutes and lifting the shares of rival plant-based protein manufacturer Beyond Meat Inc.

Impossible Foods is considering investment offers because of the uncertain business environment caused by the Covid-19 pandemic, one of the people said. Companies around the world have been tapping credit lines, cutting jobs and trying to shore up cash to deal with the economic damage.

Impossible Foods’ valuation was about US$4 billion in the March round, which was oversubscribed. It’s unclear what valuation it would seek in a new funding round and it could decide to change its plans, the people said.

A representative for Impossible Foods declined to comment.

In March, the company secured about US$500 million in a series F round led by new investor Mirae Asset Global Investments of South Korea. Existing investors including Singapore’s Temasek Holdings Pte. and Horizon Ventures Ltd., backed by Hong Kong’s richest man Li Ka-shing, also participated. The firm has raised about US$1.3 billion since its founding in 2011.

It said at that time the cash would allow it to “continue to thrive in a volatile macroeconomic environment, including the current Covid-19 pandemic.”

Beyond Meat’s shares have risen 21% this year, driven partly by news of meat-packing plant closures that could reduce the amount of pork and beef products available for U.S. shoppers. Analysts cautioned that Beyond Meat’s exposure to the beleaguered restaurant sector is a potential threat to its performance going forward.

Impossible Foods has had a slow roll-out in supermarkets. This means the company is likely to benefit less from the pandemic, which has brought restaurants to a grinding halt while the grocery business has exploded, than some competitors.

In April, Impossible Foods said it would expand into 777 more grocery stores throughout the U.S. as Americans are doing more cooking at home.

Impossible Foods, headquartered in Redwood City of California, has about 550 employees, according to its website. It’s been less than a year since the company signed a major manufacturing deal with OSI Group LLC, one of the world’s largest food producers.


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