Meatless Farm gives customers chance to put money where their mouth is

Yorkshire-based plant-burger and vegan sausage maker launches £5m crowdfunding drive

Plant-based burger and sausage maker Meatless Farm is giving its customers the chance to put their money where their mouth is and invest in the fast-growing company, which hopes to follow in the footsteps of runaway “alt-food” successes such as Oatly.

The £5m crowdfunding programme is the first time the Yorkshire-based company has offered retail investors the chance to invest with a starting stake of just £10. It comes at a time when eating meat-free meals a couple of times a week is no longer niche, according to its founder, Morten Toft Bech.

“We are reaching a tipping point,” said Toft Bech. “We could reduce around 8% of the UK’s total emissions if we all ate just one less meat meal per week.”

The company says it is “not anti-meat or pro-vegan”, but aims to provide affordable and tasty meal alternatives in an effort to build a more sustainable global food system. Its products, made using pea protein, include mince, hotdogs and sausage rolls.

The loss-making company, which increased sales by 150% in 2020, anticipates revenue of up to £30m this year. This is lower than previous estimates due to the impact of lockdowns on its food service arm, which works with high street brands such as Pret, Leon and Itsu.

Investors are eager to cash in on booming sales of plant-based foods. Swedish alt-milk maker Oatly, which listed on the US stock market last month, is currently valued at $17bn (£12bn) after a near-70% increase in its share price. In the UK alone the meat-free and plant-based dairy categories have doubled in size over the past five years and are now worth just under £600m.

Meatless Farm, whose UK base is in Leeds, has previously pulled in cash from larger investors, raising £38m in the last three years from private and family offices. It continues to weigh up the merits of a stock exchange listing, but Toft Bech said there was no urgency to pursue one.

“We are talking to London Stock Exchange about what the future looks like,” he said. “There’s so many different financing possibilities for companies like ours at the moment because of our growth. We also talked to the to US exchanges. They’re very active in Europe and say they have access to more investors and growth.”

Toft Bech, who is confident that the fundraising on the Crowdcube platform will be oversubscribed, says the prize for alternative meat brands is 50 times bigger than for dairy, given the scale of a $1.2tn global meat market.

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“It’s so humongous that even with 1%, you are a huge company,” he says. “There’s a lot of money and power lying in meat, so the conversion will come – it’s just going take a bit longer before it’s really mass market, maybe similar to what we are seeing with electric cars.”

Meatless Farm will use the £5m for expansion and product development, and says “taste, texture and price parity with meat” are key to the success of its range. It needs the best crops and factories as well as chefs and nutritionists to develop plant-based pizza toppings, chicken and snacks.

The investments will take the form of a convertible note that will convert to shares at a discounted price during the next corporate equity funding round of up to £75m, which is pencilled in for the end of this year.

Contributor

Zoe Wood

The GuardianTramp

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