Alternative protein company Exo announced the close of a $4 million Series A funding round today. The company’s cricket flour protein bars are “formulated for taste” to “appeal to everybody” by Kyle Connaughton, former Head Chef of R&D at The Fat Duck. The funding round was led by AccelFoods, an early-stage venture capital firm focused on food and beverage companies.
“Exo represents the greatest disruption to our food supply; introducing possibilities in sustainable protein sources never contemplated before,” said Lauren Jupiter, co-founder and Managing Partner at AccelFoods.
“This is true innovation in the food space with transformative global implications. Exo is reimagining the food system, and protein bars are just the beginning,” added co-founder and Managing Partner, Jordan Gaspar.
The funding round attracted a diverse group of investors, including the Collaborative Fund; entrepreneur and author of The 4-Hour Workweek, Tim Ferriss; Midwestern startup incubator and funding organization, Start Garden; multi-platinum musician Nas, and endurance athlete Amelia Boone. AccelFoods, the Collaborative Fund, and Ferriss also participated in Exo’s $1.6 million seed funding round in 2014. The company also previously raised $20,000 from its Kickstarter launch in 2013, bringing its total funding to date to $5.6 million.
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“Exo is leading the charge on developing sustainable food for the future. We've supported them from the start, and are excited to continue on this journey with them as they grow," Jupiter said.
The New York-based startup will use the latest round of funding to develop new products, expand their physical retail presence, and bring on new talent. Exo’s cricket flour protein bars are primarily sold online, but they have recently been stocked in Wegmans, the airport mini-supermarket chain CIBO Express Gourmet Markets, all North-East Whole Foods, and select gyms including CrossFit boxes and Equinox.
“This new capital will help us accelerate the edible insect movement and execute on our huge vision for insect protein in all its potential forms.”
“We don't think that eating crickets is going to be quite normal anytime soon, and there have always been challenges associated with changing perceptions that are so deeply entrenched (how people feel about eating insects),” an Exo spokesperson told Sustainable Brands in an e-mail.
“This is why we prioritize the taste, ingredients and nutrition of our bars - we make sure that once people get past the initial hurdle of convincing people to eat insects, it's easy to love our product. We're inundated by the growing demand, have expanded our team, released limited edition flavor lines and new flavors and are just about to change offices - so we've come a long way from when we started.”
Insects are slowly emerging as a viable source of protein for both human consumption and animal feed. Steep challenges lay ahead for the protein system as the global population surges to reach 9.6 billion by 2050; plant and alternative proteins – such as insects and algae – will need to account for greater shares of our diets alongside animal proteins. Companies such as Target, Hershey and Waitrose recently joined a collaborative effort to shape the future of protein and address these challenges.
Research from Fera Sciences Ltd (formally the UK Food and Environmental Research Agency) has proved that insect protein is economically viable in many cases. Dr. Rick Mumford and his team conducted life-cycle analyses of insect protein and found it to be comparable with soy. “Of course, commodity prices change, so you can only do a snap-shot comparison,” he told Food Manufacture.
Dr. Mumford currently has two insect-related projects underway, one funded in the UK, and one led by a pan-European Commission consortium. The latter is “looking at everything from insect rearing, nutritional values and safety, through to processing and product trials.”