For Abby Lyall, food touches every area of sustainability and there are many challenges to be solved in the space. Without food and a secure supply chain, we don’t have the basic needs to attack other climate change and environmental issues. And unfortunately, food and agriculture are huge contributing factors to these issues. The good news? Technology and innovation are driving sustainable transformation in everything from alternative proteins to regenerative agriculture.
In this episode of The Understory Podcast, we introduce an investor’s perspective to sustainability. Abby Lyall of Big Idea Ventures talks about investment opportunities within the burgeoning foodtech and agricultural space. Abby shares her journey within the venture capital industry and how she was drawn to solving grand challenges. She highlights her firm’s key investment criteria, especially the importance of technology differentiators in the crowded alternative protein space. Listen in to learn a new term and find out what’s trending in this growing sector.
JJ (the host of the Understory Podcast): Welcome to another episode of The Understory Podcast. Understory is a global community that fosters innovation and innovators that are trying to make a world more sustainable. And we have wonderful podcast guests.
Today I'm so excited because we have Abby Lyall, who is VP of Big Idea Ventures, to come to us and talk about what she's working on. Abby, thank you so much for taking the time. Tell us a bit more about yourself and then we can jump into Big Idea Ventures.
Abby Lyall: Thank you so much for having me. It's great to be here, super excited about the sustainability topic, so it's a great conversation to be having.
My name is Abby Lyall. I'm a Vice President at Big Idea Ventures (BIV). We're a global venture firm that invests in the food and agriculture space. We've got a few different funds: one focused on early stage alternative protein, another focused on later stage food and food technology, and then a third fund focused on commercializing university intellectual property.
I'm based in New York, but we also have offices in Singapore and Paris. We have a global focus and we're a fairly new firm. We've been around since 2018. I joined in 2019 as one of the first employees. I've been in VC my whole career. Prior to joining BIV, I worked for an industry agnostic VC fund called Quake Capital and I have a business degree from NYU Stern. That’s a little bit about me and our firm.
JJ: That's so cool, Abby. I think you're the first investor on our podcast, and we have lots of startups, lots of entrepreneurs talking to us about ideas. Let's start there about the fund and about the firm.
One of the things is about investing in some of the world's biggest challenges and in sustainability and all those different spaces that you're talking about. How do you assess companies and their impact and what are some of the theses that you have in terms of evaluating startups?
Abby: That's a great question. As a firm, we started with alternative protein. The goal overall for Big Idea Ventures is to solve lots of different challenges across lots of different industries. But our partners had a background in food, and a network in food. We decided to start with food both because of their backgrounds and because that's an industry that, in my opinion, really touches every area of sustainability.
If you don't have food, you can't move on to solving a lot of these other big challenges. If you don't have food, if people are fed, it's pretty basic, and if you look at global climate change, food is a huge contributing factor. I think the COVID pandemic really underscored this. You know just how fragile our food system was and how so many parts of it from supply chain to manufacturing could break under pressure.
Food is a great starting point to tackle the sustainability issue, and there's lots of great sustainability challenges to be solved in food. We chose protein first because there's a lot of movement in that space. There's a big movement away from animal agriculture, or at least conventional animal agriculture, both with plant-based and cultured meat solutions.
There's clear health and environmental benefits as well as animal welfare benefits to that. We were seeing a lot of great innovation happening in this space. We're seeing a lot of investment activity in this space, and our founder Andrew decided that he wanted to launch a fund focused on that. While we're in food right now, we'll be in many other verticals in the future.
JJ: As you said, the food space as a theme is huge, and people may not realize all the complexity that goes into that. You talk about alt protein, alternative proteins. Obviously, we've seen that market has grown significantly, even with the customer adoption and attraction that we've seen in the marketplace.
For those people who haven't really looked at alternative protein, what are some of the interesting things that you're seeing or challenges? And if entrepreneurs are building something in the old protein space, what advice would you give them?
Abby: It's really important to have some sort of technological or process differentiator. There's a ton of brands in the space, and there's a ton of brands in the space that have raised a lot of money. We're seeing alternative milk plant-based milk as a really good example of this. You've got Ripple and Oatley and Califia Farms duking it out in the supermarket aisles and pending huge amounts of money to win a brand war. It's really, really hard if you're an early-stage startup and you're not doing anything different from a product or technology standpoint. It's going to be impossible to win that war without raising a huge war chest of capital and basically burning it all.
The companies we're most interested in right now, a brand is super important. It's important for any business, but we're looking at a lot of companies that have some sort of unique technology or IP differentiator, whether that's on the cultured meat side. There's lots of companies that are doing a combined cultured meat and plant-based meat approach, which we think is really interesting. There's also a lot of unique technology using microbial fermentation on the alternative dairy side.
Those are two big trends to watch. Otherwise, be different be different than what else is out there. Most investors that specialize in the field have seen a lot of startups doing the same thing over and over at this point, so having something that you're doing differently from a technology perspective will make you stand apart from the crowd is important.
JJ: That's great advice! From a consumer perspective, you're absolutely right. The Whole Foods of the world start carrying some of these products and you have restaurants starting to use these products. The alternative proteins concept that went from being a concept to something that's novel to Increasingly normalized for a lot of people.
Do you think the barrier to entry on the customer side has really lowered? In other words, there's minimal education needed on the customer side and people get the impact of consuming alternative protein et cetera.
Abby: I think it's absolutely gone mainstream. You're totally right about that. It's funny, I'm not vegan or vegetarian, but I have lots of friends that are. I have some friends that have been vegan and vegetarian for a long time, and they talk about what the landscape looked like 10 or 15 years ago.
From what I gather, flavorless tofu and was the only option 15 years ago. Now you have this whole myriad of choices, so I definitely think the bar is a lot lower. If you want to be vegan or vegetarian, it's certainly a lot easier today, or even if you don't want to be vegan or vegetarian, I think the flexitarian movement is growing really rapidly. We're starting to see a lot of people. I count myself in this category.
JJ: That's a new word. I heard it. What's is a?
Abby: Flexitarian. Basically you only eat meat sometimes or you try to cut back on your meat consumption. You're not committed to going full vegan or full vegetarian. You’re committing to cutting back for you know health, environmental, or animal welfare reasons.
Getting meat eaters to eat non-meat products is a really big win for the industry, because it helps you reach this whole target audience and whole group of people that weren't your customers previously. It’s something that is new and growing.
JJ: That's super cool. I learned a new word today and I think our audience will be very happy to just to learn so much from you about how a VC thinks about the space. Let’s talk about your other funds. You obviously invest in new protein. I think you talked about also looking at food systems. Are there areas of the global food systems that also interest Big Idea Ventures?
Abby: Absolutely. For the later stage fund that we're launching. The new protein fund is our first fund that's been around since 2018. We've deployed a decent amount of that capital. The other two funds are very new. We just launched them. The later stage fund we were looking at later stage alternative protein deals in the Series A to C range.
We're also focused on a lot of other different challenges that are sustainability and climate related. I'd say materials and alternative packaging is another one that we're really focused on and that we think there's a lot of room for innovation and growth. If you look at what large food companies are doing in the types of climate promises they're making - A lot of big food companies like Nestle, for example, have really ambitious climate goals. For example, phasing out plastic by 2030 or cutting plastic by 2050. It's a huge problem so solutions to single use plastics are huge. There's a lot of them out there, but none of them are perfect. Seeing more innovation in that space is really interesting to us.
Water is another area that I think is going to be huge. If you look at the impact that climate change is having on regions, like for example, the Southwestern United States and California, which is one of our biggest farming states. There's massive water problems there. Technologies to mitigate that are going to be really important for the food system long term.
JJ: It's interesting to talk about packaging. Everything from candy wrappers to delivery packages. So many things in that value chain needs to be transformed to meet those goals. I think you're absolutely right about both opportunity and the challenges in terms of scaling to meet those goals.
I see on your website as well that you guys have an accelerator. Is that right?
Abby: The accelerator is part of the new protein fund, so that's the for the alternative protein companies that I was talking about. They are mostly early stage to pre seed and seed stage. The majority go through our accelerator program. We do occasionally make direct investments, but most of them go through our programs in either New York, Singapore, or Paris.
JJ: For companies that want to pitch to you, the firm or get to an accelerator, what are the things that you want to tell entrepreneurs? Please have these before you knock on my door. Or please think about these questions.
Abby: Having a good product is so important. We won't invest in something if it tastes bad. That's for consumer product companies, the plant-based companies.
On the cell-based end, the technology is a lot more important. We understand that companies aren’t going to have the kind of traction and sales that that we would look for on the plant-based side. We've seen all different levels of traction. You know we've had lots of companies through the program that were pre-revenue. We've also had companies go through the program that were in several doors already or had a strong online presence.
I wouldn't say there's a hard, fast rule for where you need to be at stagewise, but you need to be fully committed to building the business. We don't want to invest in founders that are just doing it on the side or also working on something else. You need to be full time committed to building your business want to build something that's scalable and grows quickly because that's the VC model of investment. There are certainly lots of great companies out there that that have a slower growth model or just want to be a sustainable, profitable business and not grow very quickly. There's absolutely nothing wrong with that, but you shouldn't be seeking VC money in that case because our model is predicated on fast growth and really large returns.
We want to invest in founders that are passionate about what they're building, are committed, and have a fantastic product. One of the nice things about the accelerator is that if you have those pieces, if you're a great team and you've developed a great product, we can help you with the rest. We can help with all those incidentals, like legal and accounting and HR and connect you to the right people. We can help you with manufacturing and distribution. We have connections in in those areas that we can use, but the core strengths of the product and the team need to be there.
JJ: I love that advice and find it super helpful.
Abby, last question - where can people find more about the accelerator, the fund, Big Idea Ventures or follow you to get more of your insights?
Abby: Our website, bigideaventures.com, is the best place if you're interested in the accelerator or just investment from us. In general, you can apply directly on our site or contact us directly on our site. That is the fastest way and the best way to go about it.
We have a very streamlined process through that site, so it’s the best way to get our attention. The fastest way to get our attention is by using the appropriate contact form or application on that site. We also post a lot on LinkedIn. We're proud of our LinkedIn presence, so follow our Big Idea Ventures page on LinkedIn.
I personally am horrible at LinkedIn. I am like your grandmother with LinkedIn, but our company page is fantastic, so definitely follow Big Idea Ventures on all social platforms, but especially LinkedIn. We have a monthly newsletter, and you can sign up for that on our site as well.
JJ: Excellent, well Abby. Thank you so much for your time. We will invite you back anytime if you want to talk more about Big Idea Ventures as you guys launch exciting new funds. I'll be happy to talk your portfolio companies as well. Thank you so much for putting capital to work where it can make a lot of impact.
Abby: Thank you very much. It was great to be here.