The Future of Protein Production Summit Speaker Profile: Gautam Godhwani, Managing Director, Good Startup

Gautam Godhwani is an entrepreneur and investor with +25 years of experience in the technology industry and has previously held positions at Hewlett-Packard, IBM and Microsoft. Now he is helping a new wave of innovators in alt proteins build the next generation of food

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Hello Gautam, thanks for joining us. Could you fill us in on your journey into food-tech?

Following the sale of my last startup, I became interested in sustainability. As I delved deeper, I became increasingly fascinated by the impact of animal agriculture, which spans climate change, resource usage, sustainability, human health, and animal welfare. I became particularly interested in animal welfare, which is a cause that remains close to my heart. I felt alternative proteins would play a meaningful role in transitioning from animal agriculture to a more sustainable food source. As my background has been in Silicon Valley building startups, I felt I would be able to contribute to the startup ecosystem in the sector.

The alternative proteins sector almost has as many VC companies as producers. What makes you different?

Our average check sizes are US$0.5-US$1 million. We have 24 portfolio companies to date. As an Asia-based investor, we feel we are well positioned to contribute to the massive change in the food system that will be ushered in by alternative proteins. Although we invest globally, Asia has an especially meaningful role to play given that China consumes half the world's pork, India is the largest producer and consumer of dairy, and Asia as a whole consumes around 60% of the world's seafood.

How concerned are you about the investment landscape at the moment, given the boom we saw in 2020-2021?

The alternative proteins sector is early in its development. As a result, we are still seeing products that don't match the mainstream consumers needs, and a relatively small number of startups and investors compared to larger sectors. Although US$5 billion in funding in 2021 was a milestone for the sector, it is a small part of the +US$300 billion in global venture capital funding.

In Q3 2022, we saw alternative protein funding drop by 51% while overall venture capital funding was 34% lower. As a result, we're seeing entrepreneurs have a challenging time raising capital. Rounds are taking longer to close with deeper diligence cycles at lower valuations. However, there is capital that will continue to be deployed, and innovation in the sector continues at a rapid pace.

So, yes, this is a challenging time for the sector, and will likely remain difficult for some time to come. Still, we have seen historically that some of the most innovative companies (e.g. Google, Airbnb) have been started in downturns. The sector will see reduced funding but it will thrive as the macroeconomic picture improves. There is a long-term imperative from both a health and sustainability standpoint that will attract entrepreneurs and investors to the sector.

Your home in Singapore is still the only country in the world to allow cultivated meat. What were your thoughts the FDA-UPSIDE development in recent months?

The FDA no objections letter to UPSIDE Foods is difficult to overstate in its significance to the sector. First, it indicates that the US government is willing to introduce these products to consumers. Secondly, the USA is a bellwether for regulatory agencies around the world, who will likely follow with their approvals globally. As a result, we can expect to see consumers around the world getting exposure to these products in the coming years.

Consumer acceptance is still a massive hurdle, price parity is challenging, even taste and texture remains a barrier for some products. In your opinion, are there things that are not being discussed in alt proteins that should be?

The sector is in its infancy. While taste and texture are being discussed, we need more awareness of how consumers see these products today, both from the perspective of product quality and brand. Ultimately, consumers will need to form an emotional connection and trust with a brand to demonstrate repeat purchase behavior. We are early in this journey, but need to think carefully about how to position these brands to lure mainstream consumers.

‍But you're convinced we'd all be better off with a mass shift to alternative proteins in the future?

Absolutely. Animal agriculture is the number one reason for deforestation, ocean dead zones and biodiversity loss. It also contributes more to global warming than the transportation sector. It is also responsible for zoonotic diseases (such as Covid) and a major contributor to chronic disease. In addition, we slaughter 80 billion land animals and one to two trillion fish annually. There is a vast opportunity here to make a broad impact across all these areas by moving away from animal products.

What are the biggest challenges you see when it comes to scaling alt protein products? And how can they be overcome?

A recent Good Food Institute report said that to reach 6% market share for plant-based alternatives by 2030, we would need US$27 billion in capital expenditures, and US$17 billion in annual operating costs. We must see both funding and innovation for infrastructure across plant-based, cultivated and fermentation products if the sector is to reach its potential.  

You will be appearing on a panel at The Future of Protein Production on the topic of ‘Alternative Protein Investment Gaps’. What will be the key takeaways for our delegates from what you bring to the table?

Delegates to the conference will have an opportunity to hear varying perspectives about where the sector requires funding. This will address both problems in the sector today, and significant opportunities ahead. For example, only 18% of overall funding has gone into the supply chain. Further, this sector has not one but three supply chains to contend with – plant-based, fermentation and cultivated – and each require their own innovation and infrastructure. It will be fascinating to see the different points of view about how the sector will evolve, and investors' role in it.

Finally, what fills you hope about the alt proteins sector?

It is exciting to see engagement from key stakeholders across the ecosystem, including universities, incumbents, investors, entrepreneurs and governments. This is key for the sector to thrive, as they each have an important role to play. In addition, we have seen that new companies continue to push the bar on innovation with new approaches and better price points for their products.

‍The Future of Protein Production Summit takes place virtually on 21/22/23 February 2023. Tickets are on sale now so to register to hear Gautam and more than 80 other speakers, 50 presentations, eight panel discussions, and three start up pitch symposiums, click here