Impossible Foods, the hot Silicon Valley maker of plant-based burgers, predicts its revenue will more than triple this year and the company is in discussions with an array of fast food chains, including Little Caesars, about putting its vegetarian meats on their menus, according to documents viewed by The Information.
The documents—part of an investor presentation the company used to raise money for a funding round announced Monday morning—said Little Caesars presented Impossible Foods with a proposal in February for something called an “Impossible Supreme Pizza” that could be offered in all the pizza chain’s U.S. locations, one of several possible chain partnerships it is considering. The presentation also revealed a host of previously unreported details about Impossible's financial performance in 2018 and its financial forecasts. The $300 million funding round it announced Monday valued the company at around $1.9 billion, according to a person with knowledge of the matter.
The Takeaway
• Discussing deals with Little Caesars, Subway, Dunkin’ Donuts and others
• Company lost $179.2 million on $29.2 million in revenue in 2018
• Announced $300 million funding round Monday at a valuation of around $1.9 billion
Impossible needs money to help it boost production capacity for its plant-based products, which simulate the taste and “mouthfeel” of real meats, at a time when the company is struggling to keep up with demand. In April, Impossible’s Chief Financial Officer David Lee told the Financial Times that it is “straining to meet demand” after it struck a deal with Burger King to supply vegetarian patties for a new Impossible Whopper, vowing to use any new capital it raises to expand capacity. 
Impossible Foods is one of several companies that have developed meat alternatives aimed at a growing segment of the public seeking to shun beef and other animal products for ethical and environmental reasons. Impossible’s biggest rival, Beyond Meat, went public earlier this month and, while its stock has been volatile, it has a market capitalization of nearly $4 billion. Silicon Valley investors have begun plowing money into food startups at a time when it is becoming harder to fund breakout consumer tech startups, as the market consolidates around a handful of powerful mega-companies.
The $300 million round was led by existing institutional investors Temasek and Horizons Ventures, along with a collection of professional athletes and other celebrities, including tennis star Serena Williams, hip-hop artist Jay-Z and the singer Katy Perry. Prior to the latest $300 million round, Impossible had already raised about $477 million from investors through a combination of equity and debt, according to the research firm PitchBook. Earlier investors include Bill Gates, Serena Capital, Khosla Ventures and Horizon Ventures.
A spokesperson for Impossible declined to comment on the details in the company’s investor presentation.
For now, Impossible’s sales are significantly smaller than that of Beyond Meat’s and its losses much higher. In 2018, Impossible lost $179.2 million on $29.2 million in revenue, according to the investor presentation. Beyond Meat reported a $29.9 million loss on $87.93 million in revenue in 2018. Impossible was founded in 2011, two years later than Beyond Meat.
For 2019, Impossible predicted revenue of $91.5 million, which could jump to $1.24 billion by 2023, according to the presentation. After years of losses, it forecasts a profit—$37.9 million—for 2021. It said it sold 3.5 million pounds of its vegetarian products last year, forecasting a jump to 225.8 million pounds in 2023.
In addition to the proposal from Little Caesars—described as a “letter of intent”—Impossible said it received an “influx of inbound interest” from other top 50 chains, including Subway, Dunkin’ Donuts, Wendy’s, Papa John’s and Arby’s, according to the presentation. The company already has deals with White Castle, Qdoba and Red Robin.
Spokespersons for Little Caesars, Subway, Dunkin’ Donuts, Wendy’s, Papa John’s, and Arby’s didn’t immediately respond to requests for comment.
In the presentation, Impossible said it has plans to increase capacity at its existing factory in Oakland, Calif., but it will also need to do more, including building another facility, which it called “Plant Next,” that will cost $100 million to build. The presentation said Impossible has selected Ohio as the location for the new factory.
“In almost every scenario, we believe we need to build significantly more capacity to meet demand in 12 to 18 months, demonstrating the need to move forward with Plant Next,” it said in the presentation.
