Plant-based business venture Fable Food is on the verge of collecting up to $25 million in new finance, as the alternative meat industry continues to gain traction among both meat eaters and vegetarians. Grill’d, Guzman y Gomez, and Heston Blumenthal are among the companies that use shiitake mushrooms to manufacture meat products. Fable Foods has settled on two individuals as prospective lead investors—one American and one from the UK—who would supply the majority of the cash and bring on additional smaller investors, according to co-founder Michael Fox, whose previous venture was the failed fashion start-up Shoes of Prey. Fox said the next step was to negotiate the terms and determine which offer was better aligned with the start-up’s mission and valuation of the business.
“We’re looking for investors that have worked with high-growth companies before and know how to work with and help company like ours scale,” he said. It will be Fable’s third round of funding if the deal is completed. The first was led by Grok Ventures, Atlassian co-founder Mike Cannon-Brookes’ personal investment firm, which invested $1.5 million in the company in December 2019. The second was a seed round led by Blackbird Ventures that raised $6.5 million nine months ago. The extra funds will be used for two things: research and development and existing expansion activities in Singapore, the United States, and the United Kingdom.
“At the present, we don’t have any salesmen in the firm—in any market, including Australia,” Fox explained. Fable Food has a tiny retail presence, but their objective is to engage with celebrity chefs and high-end foodservice companies to target the upper crust of the market (The Coffee Club and meal kit subscription service Marley Spoon are also customers). Fable hopes to expand its business model beyond the United States. Fable presently has three patented mushroom products and wants to add more with the new funds. It intends to develop its mushroom breeding programme and do more mushroom farming research.
Australians eat only 3.5 kilogrammes of mushrooms per year, compared to 120 kilogrammes of land animals—a number the co-founder hopes to change. “There’s a lot of work to be done,” Fox stated. “We want to continue investing in it so that we can help Australians eat less meat and eat more mushrooms.” What if investors are concerned about a replay of what happened with Shoes of Prey, which went bankrupt in early 2019? “The best rebuttal to that is that Fable has raised two rounds of funding so far,” he said, noting that Grok Ventures and Blackbird were also investors in the fashion start-up. “They went through the whole Shoes of Prey experience with me,” said Fox. “You get those things wrong and it’s difficult because you’re trying to do something completely new and different. That’s why we want venture capital investors who understand that.”