Investing in Sustainable Alternative Proteins to Reinvent Food

Steve Molino, Principal, Clear Current Capital

Could you talk about your roles and responsibilities at Clear Current Capital?

The beginning of my career was in traditional finance, but gradually I shifted my focus to private equity and venture capital firms. As my career progressed, I developed a passion for sustainable food systems.

My decision to leverage my financial expertise to support a cause closer to my heart brought me to Clear Current Capital. In essence, Clear Current Capital is a venture capital firm that invests in early-stage companies in the alternative protein and sustainable food sectors. It makes investments in early-stage businesses that are concentrating on plant- and cell-based agriculture. My current responsibilities include overseeing our firm’s investment practices. I am responsible for leading new investment and diligence activities, portfolio management needs, and internal operations support.

Can you please talk about the recent trends in the food tech space?

From an investment standpoint, in the last two financial quarters, there has been a lot of hype around the alternative protein or plant-based protein. Compared to traditional technology companies, alternative protein and sustainable food sectors exhibit more representative valuations. This led to an uncontrollable increase in the value of alternative proteins.

Investors are expecting growth rates comparable to those seen in technology companies, but food companies do not scale the same.  

A food company is different from a technology company, meaning it takes many co-manufactures and a long time to build a million-dollar revenue stream.  As a result, the hype surrounding alternative proteins and sustainable food is starting to wear off, although still showing sustainable growth.

The valuations are now returning to reality. Investors contend that alternative protein and sustainable food tech companies should be valued similarly to conventional food tech firms rather than as technology firms. I believe that the industry will benefit from this recalibration and eliminating the hype surrounding alternative proteins.

What are some recent innovative ideas that you have come across?

One of the fascinating ideas at the moment is precision fermentation. In the pharmaceutical sector, precision fermentation has been used for years. It has only recently started to be utilized in the food sector. It’sIt’s probably one of the more exciting technologies out there now because it creates natural animal protein or real animal products—just without the animal. That’sThat’s quite exciting because it minimizes environmental impact.

Change Foods is an excellent illustration of a business specializing in precise fermentation, and we have invested in them. They’reThey’re employing precision fermentation to make true dairy, protein, and casein protein. They are also using it to create different lipids, proteins, and fats, essentially producing real cheese without using animals.

It is different from plant-based cheese, which does not possess animal-based cheese’s stretchiness and melting properties. Plant-based cheese has, therefore, not struck a chord with consumers and has had limited market success. Change foods and other precision fermentation firms are providing vegan consumers with the same experience as they would have gotten from regular cheese.

Can you share your insights on your role in your company?

The best aspect of Clear Current Capital’sCapital’s work is that it serves as a change catalyst. Although we don’t create the businesses, we are uniquely positioned to guide their success in the alternative protein and sustainable food sector.

In addition to providing the required capital, we assist them with future fundraising and overall business strategy, growth strategy, and go-to-market strategy. We work with the smartest and brightest people creating positive change and influencing the food industry. Whether through financial investments or finding new finance partners, we help our clients with all their needs.

“Clear Current Capital is a venture capital firm that invests in early-stage companies in the alternative protein and sustainable food sectors.” 

What would be your advice for your peers in the food tech and venture capitalist space?

I can offer them two bits of advice. The first would be to devote time to developing a company or investing in firms that can truly impact the world. Many businesses are simply good to have, but there are many more that are genuinely resolving significant global issues. If you’re going to devote your life to something, I strongly advise you to concentrate on something that is required to make the world a better place.

The second piece of advice is to focus your career, if feasible, on doing something good for the world in an area that you care about. There are areas where you can attempt to bring improvements. As for myself, I am concerned about changing to a more sustainable food system for personal reasons, and that has become my obsession. That’s where I want to change things. When you care about something, it becomes much easier to go to work every day and make a difference.