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Impossible Foods vs. Beyond Meat: 5 Key Differences You Should Know

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Michael Wenner   May 02, 2019




2019 is shaping up to be an exciting year with several tech companies gearing up for IPOs. Amongst them is a highly anticipated food technology startup called Beyond Meat, which is planning to disrupt the consumption of meat as we know it. The company is raising $240 million at a $1.6 billion valuation. Beyond Meat plans to accelerate all aspects of the business through the capital raised and hopes to move the world closer to plant-based protein that mimics animal-based meat.

Although Beyond Meat considers all meat producers to be its competitors, realistically the company competes against Impossible Foods, another ode to the fake meat movement. Impossible Foods has created their version of meatless burgers called Impossible Burgers, which also uses plant-based proteins. Although the company hasn’t officially set its eyes on an IPO, the CEO’s comments concerning turning down an acquisition by Google indicate a possible IPO for Impossible Foods in the coming years. Nevertheless, to understand the two companies better, let’s break down their key differences.

Funding and Valuation

In terms of private funding, Beyond Meat has raised $122M from high profile investors such as General Mills and Tyson Foods (which has liquidated their 6.5% equity stake ahead of the IPO). Beyond Meat has also enjoyed the backing of VC giants Kleiner Perkins in addition to a slew of traditional agricultural investors. Impossible Foods, on the other hand, has raised three times the capital as Beyond Meat, totaling $388M with investors including Khosla Ventures and Temasek Holdings. Curiously, Bill Gates has opted to back both horses by investing in the two companies.

Production

With two production facilities in Missouri totaling 100,000 square feet, Beyond Meat produces and sells its plant-based products in over 33,000 grocery stores, restaurants and hotels in the U.S. One main appeal of Beyond Meat’s products are that its 100% plant-based recipe is less resource intensive compared to meat-based equivalents. According to a University of Michigan study commissioned by the company, each Beyond Burger generates 90% less greenhouse gas emissions, requires 46% less energy, has more than 99% less impact on water scarcity, and 93% less impact on land.


On the other hand, Impossible Foods is producing 500,000 pounds a month in their 67,000 square foot facility, and serves over 5,000 restaurants. The company recently launched a new burger, called the Impossible Burger 2.0, and partnered with White Castle and Burger King to sell it. Impossible Foods claims that the Impossible Burger 2.0 will reduce aquatic eutrophication by 78%, global warming by 60%, land occupation by more than 99%, and water consumption by 79%.

It should be no surprise based on the statistics above that environmentalists are cheering the rise of these plant-based meat alternatives.

Management 

The two companies have highly motivated founders. Beyond Meat was started by Ethan Brown, who turned vegan himself after his experiences working on his father’s dairy farm. Seeing the lack of plant-based options in the main stream fast food culture, he came up with the idea to create meatless burgers and started Beyond Meat in 2009.

Impossible Foods was founded by Patrick Brown – also a vegan – who was a professor from Stanford University. While on sabbatical, he set out to solve what he saw as one of the biggest climate change contributors, animal agriculture, and started Impossible Foods in 2011.

Both companies set out to curb climate change by changing consumer habits through plant-based meat options.

Products

Both companies’ flagship products are their meatless burgers. Beyond Meat, though, has expanded its offerings to include sausages and ground beef. In addition, only Beyond Meat is GMO-free while both companies are gluten free. Beyond Meat and Impossible Foods though have used different strategies to capture the market. Beyond Meat has primarily offered its products via grocery stores and recently has broken into the food service industry. Impossible Foods has taken the opposite tactic, focusing on the food service industry with hopes to launch in grocery stores this year.


Both companies are constantly experimenting with their formulas, attempting to mimic the taste and feel of meat. Beyond Meat expects to roll out new products in 2019, potentially including chicken. Impossible Food’s CEO has stated that he aims to completely replace the use of animals as a food production technology by creating sustainable meat, fish and dairy products directly from plants.

Taste

Beyond Meat uses a proprietary system that applies heating, cooling, and pressure to align plant-proteins in the same fibrous meat structure. In addition, the company uses plant-based proteins from pea, faba beans and soy to mimic the composition of animal-based meats. Using this method, Beyond Meat claims to be able to mimic the hallmark burger “bleed.” Additionally, the company asserts that its products are vegan and non-GMO.

Impossible Foods focuses on delivering a product that has all the flavor, aroma, and beefiness of meat from cows. The company uses heme, which is a molecule found in hemoglobin, that the company believes recreates the meat-eating experience. Impossible Foods derives heme through genetically-modified yeast and asserts that its products are 100% plant-based. 

Beyond Meat priced its IPO at $25, the top end of its revised range, on Wednesday, May 1, 2019. The company debuts on the public markets today, testing the public markets' appetite for plant-based alternative foods.

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Lyft Beats Uber to First Ride-Hail IPO

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Adam Augusiak-Boro   March 28, 2019

Lyft, Inc.’s public debut will kick off one of the most highly-anticipated IPO seasons in recent memory. As companies stay private longer and the number of public companies in the U.S. remains at an all-time low, blockbuster IPOs like Lyft are an increasingly rare occurrence. We cover some of the reasons behind the fall in IPO activity in EquityZen’s 2019 IPO Outlook, which predicts that Lyft and 15 other companies, including its larger, global competitor Uber, will finally go public in 2019 and reignite what has been a largely muted IPO calendar over the last several years compared to previous bull markets. With Uber on its heels, Lyft is set to begin trading on March 29 at a fully-diluted valuation of around $25 billion (Lyft’s latest S-1 filing indicates a price range of $70 to $72 per share), allowing public investors access to Lyft’s stock for the first time in its history. Previously, investors looking to purchase Lyft shares had to participate in private financing rounds with high minimum investment thresholds or seek secondary offerings on pre-IPO trading platforms like EquityZen.


Now that we finally have access to Lyft’s full financial statements and management commentary within Lyft’s Form S-1, we have prepared the below mentioned report with our thoughts on the company’s total addressable market (TAM), path to profitability, comparable companies, and a number of growth levers and downside risks. As Lyft cements its IPO pricing post-roadshow, we expect that institutional investors have asked Lyft’s management many of the same questions that we cover below.

Sector Overview: Transportation-as-a-Service

Ride-hail companies like Lyft identify as multimodal transportation networks operating within the burgeoning Transportation-as-a-Service (TaaS) industry—also referred to as Mobility-as-a-Service (MaaS). TaaS describes a shift away from personally-owned modes of transportation and towards mobility solutions that are consumed as a service, often on-demand, and tailored to the individual needs of a traveler through a variety of transportation options, like ride-hailing and carpooling.


This industry, born in the wake of the Great Recession, was made possible by the mass adoption of smartphones, which for the first time allowed millions of drivers and riders to connect via ride-hailing apps. As the industry developed, several modes of transportation have been incorporated into TaaS networks, including:
  • Ride-hail: Ride-hailing is a service that connects riders with local drivers, giving riders a door-to-door transportation option. Example: Lyft’s core, on-demand ride-hail offering.
  • Carpool: Carpooling connects drivers with other passengers looking to travel to the same long-distance destination, sharing the cost of the journey between the driver and passengers. Example: Paris-based BlaBlaCar’s long-distance service.
  • Shared rides: Shared rides are the intersection of ride-hailing and carpooling, where riders traveling similar routes share a trip, often for short distances. Examples: Via, UberPool and Lyft’s Shared rides
  • Bikes and Scooters: Bike and scooter rentals provide consumers with a first- and last-mile option, giving riders the option to pick up and drop off these rentals anywhere they are available. Examples: Bike and/or scooter rentals are now offered by a number of companies, including Uber, Lyft, Lime and Bird.
  • Autonomous Vehicles: Autonomous vehicle (AV) rides are still in their infancy, but ride-hail companies like Lyft and Uber hope AVs will eventually provide all of the rides on their respective networks. Examples: In addition to Uber and Lyft, a number of diverse companies are chasing AV ambitions, including General Motors, BMW, Tesla, Apple and Waymo.
So how large is this TaaS market? And where does Lyft fit in? Download our report to dive in.
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What To Expect When You're Expecting An IPO

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Risun Udawatta   March 07, 2019

The moment we’ve all been waiting for is finally here. No, we’re not talking about the Game of Thrones trailer dropping. We’re talking about tech unicorn IPOs, with Lyft’s recent S-1 filing kicking it all off (check out our blog post on reviewing S-1s). With more companies slated to enter the public markets this year, it’ll be important to understand the IPO process, which we breakdown for you in this blog post.

Source: Crunchbase

The IPO

For startups, an IPO is not for the faint of heart. It can require years of preparation to ensure the right people and processes are in place to comply with the various securities laws and to pass muster in the public markets. IPO preparation is largely done behind the scenes — once plans for an IPO are disclosed, any backtracking may seriously impact the company’s ability to successfully list on a national exchange in the near future. Below are the major steps that companies take during the IPO process:



Stages of an IPO

Hire an Investment Bank

One of the telltale signs a company is pursuing an initial public offering is the hiring of an investment bank to lead the IPO process. Investment banks typically have years of IPO experience and also investor relationships that corporations may lack. Some investment bank responsibilities include preparation of financial statements, valuation, investor outreach, and book-running (the process of tracking information about investors interested in participating in the IPO). Hence, hiring an investment bank signals to the market that a startup is preparing to go public.

Confidential Submission of Draft Registration Form to the SEC

As discussed, an IPO can be taxing on a startup, as it requires complying with securities laws and regulations, like the Securities Act of 1933 or Sarbanes-Oxley Act of 2002. Born out of those regulations, a company is required to file a registration form, commonly known as the S-1, in order to sell securities to the public. An S-1 is an initial registration form for new securities that is required by the SEC – for more information on what is in an S-1 and what to focus on, check out our blog post. As a first step, a company will confidentially submit a draft registration form to the SEC for review and comment. Recently, unicorns like Postmates and Uber have confirmed confidential S-1 filings with the SEC.

Publicly File the S-1

Once a company has gone through a couple rounds of comments from the SEC, a company will publicly file an S-1. At this point in the IPO process, a company has signaled its firm commitment to pursue an initial public offering, and barring any extreme turns in the public markets, a company will likely list on a national exchange like the NYSE or Nasdaq. It is important to note here that the first S-1 filing will exclude the number of shares and the share price that will be offered to the public. However, this public filing will disclose detailed financial information and will give public investors a look under the hood of a company for the first time.

IPO Road Show

After publicly filing the company’s S-1, the company, along with its investment bankers and lawyers, will go on a “road show.” An IPO road show is the presentation given to potential buyers. Management, bankers, and lawyers will travel the country presenting an investment deck to wealth managers, institutional investors like hedge funds, and other sophisticated buyers. It gives investment professionals direct access to management and allows them to ask key questions. Ultimately, the road show is meant to determine appetite for the security and at what price investors are willing to buy the IPO shares.

SEC Declares the S-1 Effective

Following the IPO road show, the investment bank will divvy up the total shares offered to the various investors and determine the final pricing of the shares. Subsequently, the company will complete the S-1 filing by filling in the number of shares to be offered and the price of the security. The SEC will then declare the S-1 effective, meaning the company has met all the disclosure requirements to sell shares to the public.

Trading Begins

After the SEC declares the S-1 effective, the company’s shares will officially begin trading (typically the next day) on the chosen national exchange. Trading is usually commemorated by the company ringing in the trading day on its exchange of choice. The first few days of trading are closely watched by the investor community as investors hope for an IPO pop in share price. In the event the newly-public shares trade below the IPO price, it may point to some fundamental weaknesses of the company or that the IPO was incorrectly priced. In the event the shares trade higher than the IPO price, the offering will be deemed a success, albeit having left money on the table for the company.

An understanding of the above steps will help you keep track of the process and how close certain unicorns are to their IPO. Timing and speed of the IPO process will differ for each company, and certain companies may have fewer disclosures or an easier-to-understand business model that may speed up the process. In the event of severe market turbulence, IPOs may be delayed or postponed indefinitely even up until trading day. In the end, companies control their destiny and can pull out of the IPO process at any point.

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