When Nature’s Fynd sought a venture capital partner, the alternative-protein maker tapped Andrew Chung and 1955 Capital. Chung admits that there were “many exceptional investment firms” in the running for the lead position, but his fund prevailed.
“That is a real honor to be chosen by a compelling entrepreneur and team,” he says.
Landing Nature’s Fynd as its signature deal cemented Chung’s standing as an expert in sustainable food investments. Since 2018, 1955 Capital has invested $50 million in the startup.
When Andrew Chung founded 1955 Capital, the largest venture capital firm to debut in 2016’s first quarter, he already knew his mission. He wanted to invest in early-stage technologies to solve the developing world’s most significant challenges.
“I thought there was a really big opportunity to change humanity for the better and use advanced technology to be the mechanism to accomplish that,” he says.
Chung didn’t know that his investment success in sustainable food production would put him on history’s stage. Since then, the pandemic and climate change have renewed the public’s focus on addressing the world’s most pressing challenges in sustainable agriculture.
After joining Khosla Ventures in 2011 as one of six general partners, Chung managed more than $500 million in 20 portfolio companies and delved deeply into the sustainable food industry with his team.
He notes, “We were early investors in Impossible Foods, Just Foods, Ripple, and Kite Hill. Many of these names have now made it to market. We were one of the first firms, if not the first firm, to see it as a big opportunity.”
With 20 years of experience in sustainability and eight unicorns in his rearview mirror, including climate tech (climate technology) leaders LanzaTech and QuantumScape, Chung has become a sage in the relatively new field. Before founding 1955 Capital, he focused on sustainability startups at tech-heavy Khosla Ventures and Lightspeed Venture Partners, where he created what he calls “save-the-world” portfolios.
“There are a lot of investors dealing in this category who really don’t have the deep experience level — and frankly, the battle scars — of understanding how to manage a technology company,” Chung says.
Chung explains that many venture capital firms have not gone through a cycle or two of the positives and the negatives. “This is a category where you learn from your successes.”
With experience, Chung has crafted a deliberate method for making startups like Impossible Foods hum. Creating alternative food products requires knowledge in deep technology and science-based categories, which 1955 Capital’s team has. Additionally, such startups need a manufacturing process that’s straightforward enough to create multiple types of alternative proteins.
“We want to back a company where the process is so elegant that a layperson coming in can see why this is so simple to make,” he says. “Then the food products themselves are more natural and include fewer extra ingredients.”
Success also requires a methodology for scaling up the business.
“We’re in the second cycle of doing this, so Nature’s Fynd was about looking for a diverse platform — not just single-product or single-category companies, more typical of the other companies in the field,” Chung explains. “We wanted a long-term bet on a company that could invent products in all the food groups with 20 tasty options ready on day one.”
Nature’s Fynd, based in Chicago, initially launched with meat and dairy alternatives, like meatless breakfast patties, with Fy™, a nutritional fungi protein. The breakthrough fermentation method used to produce Fy™ uses a small fraction of the water, land, and energy used in traditional agricultural practices to cultivate animal protein.
The patties by Nature’s Fynd recently landed in select Whole Foods Market stores, which Chung calls “the most credibility any startup can get from a first distribution partner.”
Chung already had more than 10 years of experience investing in sustainable food products when Nature’s Fynd founder and CEO Thomas Jonas chose 1955 Capital to lead his Series A round and propel his company’s growth. At the basic level, Chung feels Jonas appreciated 1955 Capital’s knowledge of the space.
“There was a lot of trust in my knowledge about the food space and understanding of scaling companies up, like what my team did with Impossible Foods at Khosla Ventures. We also learned a lot in our process of scaling that and other food companies up from startup to market leader,” Chung says.
1955 Capital and Andrew Chung continue to be involved with its strategy, marketing, geographical launches, and capital formation strategy. Nature’s Fynd has raised close to half a billion dollars since its inception.
“We were an important part of that by advising the CEO on how to approach it,” Chung explains. “We introduced a number of the investors involved in the financings. We also thought about how to manage that scale of capital going forward. It is something where we have a deep relationship between the entrepreneur and our team.”
Chung says one of 1955 Capital’s strengths is its global perspective. While at Khosla, he led the firm’s China activities with the benefit of being fluent in Mandarin and Cantonese. He knows how to develop cross-border collaborations in countries that desperately need technological help with sustainable food production and agriculture.
“I was the Khosla partner most focused on Asia and thinking about opportunities there,” he explains. “There is a complete mismatch between food demand driven by the fastest-growing middle class of all time in China and the limited supply of arable land and clean water for irrigation they have. They must also use agricultural practices that are not environmentally friendly to keep pace with this survival-driven demand.”
Chung learned early on to be keenly aware of this predicament on the other side of the globe. He credits Vinod Khosla, the founder of Khosla Ventures and co-founder of Sun Microsystems, with sounding the alarm about the sustainability of food production.
“Vinod deserves a lot of credit for being one of the first people to see the global food supply problem as being broken,” Chung says. “He saw that we were headed toward disaster as a planet. The writing was on the wall.” Chung named his firm “1955” after the year that Khosla and several other revolutionary thinkers like Steve Jobs, Bill Gates, and Eric Schmidt were born.
Chung passionately carries that torch and does so with intentionality. “To invest in the categories we’re investing in, the ones I think are highly beneficial to the world, you need a revolutionary approach,” Chung says. “It’s not your dad’s venture capital firm.”