Alfa-Backed Food Startup Targets Coca-Cola Growth Model
(Bloomberg) -- The Live Green Co., a plant-based food producer startup in Chile, wants to use the financial backing it recently got from Sigma Alimentos, a unit of giant Mexican conglomerate Alfa SAB, to help the whole industry clean up their act.
The company’s strategy won’t be to flood supermarket shelves around the world with its plant-based hamburger and pancake mixes or its ice creams. Those were created to show the potential of Charaka, an algorithm that it plans to license in the future to larger food producers to help identify synthetic, animal-based or processed additives in their own product labels and replace them with natural plant-based alternatives.
“As an early-stage startup it was very difficult to reach to food manufacturers to convince them to switch” to Charaka, so The Green Live developed its own products to show how the system works, said The Live Green Co’s chief executive officer and founder Priyanka Srinivas in an interview. In the future “our revenue would come from royalties and base mixes. Like the Coca-Cola model,” Srinivas said.
The Live Green’s ice-cream has the taste, feel and consistency of regular ice cream, Srinivas explained, but has replaced additives like gum, sucralose, emulsifiers and anti-freezing agents with things like avocado, bananas, sunflower seeds and oil. The company has a production facility near the city of San Fernando, about 140 kilometers (87 miles) south of Santiago, where it sources its ingredients from local farmers.
Sigma invested in The Live Green Co’s seed round after running tests of Charaka in one of its own products, Srinivas said. The Mexican conglomerate will allow it to showcase Live Green’s products in the 18 markets where it operates with an aim of securing more Charaka licensees. “We don’t want to build an FMCG brand,” Srinivas said, referring to what are known as ‘fast moving consumer goods’ in industry parlance. Eventually, other plant-based FMCGs such as Beyond Meat, Impossible Burger, Oatly or even Chile’s NotCo could become clients.
Now The Live Green is in talks with several protein-focused venture-capital funds as well as family offices and some retailers to raise another $5 million valuing the company at about $21 million.
Srinivas (37) was born in Hyderabad, India and previously worked in marketing for Target Corp. She traveled to Chile to found The Live Green Co. in 2018 lured by the country’s Start-Up Chile program, which provides seed money and assistance to new companies. Chile also had the bonus of being a small market with characteristics similar to the U.S., where it could test its products.
The chief technology officer of The Live Green and the mastermind behind Charaka is also from India.
For further growth, The Live Green is looking elsewhere for more funding as Chilean venture capital funds have proven too risk averse. Other startups like plant-based food producers NotCo and grocery delivery firm Cornershop have also looked elsewhere for funding, with Cornershop founder Oskar Hjertonsson complaining that local investors are more concerned about losing money than about missing out on the next big thing.
“We don’t want to lose out on time” looking for more funding in Chile, Srinivas said. “We already have a $6 billion company validating us.”
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