Simulate raises $50M to expand its plant-based chicken

Dive Brief:

• Simulate, parent company of plant-based chicken analogs Nuggs and Discs, raised $50 million in a Series B funding round. The investment was led by Reddit founder Alexis Ohanian’s Seven Seven Six venture firm. Ohanian is joining Simulate’s board of directors. Other investors include Chris and Crystal Sacca, NOMO Ventures, McCain Foods, Imaginary Ventures and Day One Ventures.
• The funds will be used to triple Simulate’s internal team, accelerate development of new products and technologies, scale manufacturing, increase its retail and foodservice presence and continue expansion into international markets. 
• Simulate has been growing its sales and footprint quickly since it launched in 2019. Nuggs are now available at more than 5,000 retail locations nationwide. Simulate plans to be in an additional 10,000 locations by the end of the year. Nuggs launched in Canada the same day the investment was announced.

Dive Insight:

It seems 2021 is ramping up to be the year of plant-based chicken. In the past few months, the space has seen launches of both new products and different spins on older ones. It’s also witnessed lots of new capital, including this $50 million investment for the Gen Z-styled Simulate.

The Nuggs maker — which is valued at more $250 million after this funding round, according to Bloomberg  — has been riding the plant-based chicken wave since its launch. The company was started by Ben Pasternak, then an Australian teenager who had success in developing phone apps.

Pasternak, now 21, started his company by creating plant-based chicken nuggets that were first only available direct-to-consumer. The feedback the company received allowed it to alter its recipes to create better versions. This is the same kind of iterative development model used by tech companies to improve applications.

Ohanian said in a statement about the latest funding round that he supports Simulate because it’s like a tech company.

“The entire team’s commitment to rapid product iteration and building products that can infinitely scale is why we’re backing Simulate,” he said in the statement. “The best technology companies that I’ve invested in over the past decade have operated with similar principles.”

Simulate grew significantly in the last year, launching into retail and hiring top level staff who are veterans in the CPG industry. The company also took advantage of the pandemic ghost kitchen trend — restaurants that have no dining rooms and only do delivery — by starting a popular San Francisco-area delivery operation. Simulate launched its first new product called Discs, which are round sandwich-sized plant-based chicken patties, in December.

Both Ohanian and McCain Foods have been high-profile backers of the company. McCain led Simulate’s first funding round in 2019, and signed on as a manufacturer of its products. Ohanian got involved last year in a $4.1 million funding round.

Simulate’s branding targets younger consumers. Unlike other plant-based meat companies that play up their similarity to meat from animals, Simulate goes all in on the fact that its products are — as the company name suggests — a simulation of it.

The company’s website looks like it belongs to a software application. It has the type of loading screen ever-present on 1990s-era computer programs and language that describes Nuggs and Discs as simulations.

This is likely a positive for the youngest consumers with purchasing power. A Packaged Facts study released last year found Gen Zers and the youngest millennials make up the largest share of plant-based protein eaters. They are 22% more likely to eat the analogs than any other consumer group.

As Simulate expands, it will find crowded store shelves along the way. Nestlé’s Sweet Earth, Kellogg’s Incogmeato and Greenleaf Foods’ Lightlife have all launched new plant-based chicken products in recent months. Fermented mycoprotein maker Quorn plans a new push for its chicken products in the U.S. after parent company Monde Nissin’s successful IPO. And Daring Foods just received a $40 million funding infusion to expand its employee count and retail footprint.

However, Simulate’s ability to find new customers and outlets during the pandemic, its ranking at the top of consumer taste tests, its well known backers and the ability to appeal to younger consumers may help it stand out in the freezer case.