July 18, 2019 / 8:59 PM / 2 months ago

Brazil's Monashees buys stake in plant-based meat producer Fazenda Futuro

SAO PAULO, July 18 (Reuters) - Brazilian plant-based meat producer Fazenda Futuro said on Thursday it has received its first round of investments, led by venture capital firm Monashees.

In the transaction, which valued the company at around $100 million, Monashees and investment firm Go4it Capital acquired an 8.5% stake in Fazenda Futuro for $8.5 million, the company said in a statement.

Founded in 2005, Monashees is also an investor alongside other international funds in delivery startups Rappi and Loggi, as well as in the mobility group Grow and the fintech Neon, among others.

"As Brazil is one of the largest meat exporters in the world, we want to be a global name in this market. It is our obligation," Marcos Leta, founding-partner of Fazenda Futuro, said in a telephone interview with Reuters.

But the plant-based meat producer faces tough competition in both Brazil and abroad.

Seara, a subsidiary of giant meatpacker JBS SA, recently started selling plant-based meat, while Brazil's largest chicken exporter, BRF SA, considers a potential return to the vegetarian market.

Outside of Brazil, Beyond Meat and Impossible Foods have already received millions of dollars in investments.

With the investment led by Monashees, Fazenda Futuro aims to accelerate its production capacity from 150 tons per month to 550 within 18 months, according to Leta. The expansion, however, is still not enough to make plant-based meat prices compatible or lower than actual beef, he added.

Leta estimates that Fazenda Futuro will have to reach monthly production capacity of at least 1,000 tons to gain scale and improve margins.

The company is mostly focused on having its products on the shelves of large retail chains such as Casino's GPA and Carrefour Brasil, but also eyes fast-food chains operating in Brazil.

"Our focus is 65% in retail and the rest in food-service," said Leta.

Fazenda Futuro currently sells its products in approximately 2,000 places across Brazil, with a major presence in the south and southeast of the country, besides Brasilia and Salvador. (Writing by Gabriela Mello; Editing by Dan Grebler)

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