Did The ‘Vegan Mafia’ Overhype Beyond Meat Stock?

This week, Unovis Asset Management announced its oversubscribed fund, raising $166 million and telling Forbes that it “warns ego-driven valuations and the mentality of rushing to exits could ultimately damage entrepreneurs’ well-intentioned impact.”

That seems rather rich.

Unovis is a chief investment vehicle of the “vegan mafia,” a term used by CNBC in 2017 to describe a group of “secret investors” betting on start-up companies that are aiming to remove animals from the food supply.

The main agenda of the vegan mafia is to create as much hype as possible to drive investments and media coverage of their favorite start-ups. Ironically, Unovis has financially benefited from said hype, particularly from IPO darling Beyond Meat.

This business model, driven by a select group of (mostly) privileged white men, operates by pouring massive amounts of cash into a few golden brands that promote “food tech.” The model fits right into the standard VC-driven approach that has been taking over the vegan movement for several years.

Indeed, the Unovis press release announcing its fund quotes no fewer than four white male representatives, despite the firm’s DEI statement on their website claiming “we are all connected”.

The precursor fund to Unovis was New Crop Capital, which became an investor in Beyond Meat and later exited (sold the stock) when the company went public.

In more evidence of concentration of white male power, one of New Crop Capital’s managing trustees was Bruce Friedrich, better known as the leader of the non-profit organization The Good Food Institute (GFI). GFI is essentially the PR arm for drawing investment capital into vegan companies, putting out annual reports celebrating record-setting investments. In other words, the vegan mafia’s most vocal proponent.

Here is how Friedrich himself described the relationship between his two entities:

“The Good Food Institute and New Crop Capital are speeding [the] transition [to an animal-free food system] by increasing the number of companies operating in the plant-based and cultured space and by helping the companies that exist to be as successful as possible.”

While GFI was busy promoting Beyond Meat’s IPO, New Crop Capital was sitting on its investment, waiting on the big return that would come from the overhyped stock. The payoff was huge. In 2019, Beyond Meat enjoyed a record-breaking IPO with shares soaring 163 percent.

But what goes up must come down. As of January 10, the stock was getting shorted (betting the stock price will decline) more than any other company, at 42 percent of total shares. According to Seeking Alpha, despite being down 50 percent, analysts still think the stock is over-valued, describing “a wild ride” with share price swings as high as $221, concluding that “excitement about the company's products has faded.”

But the vegan mafia wants to warn us about “ego-led investments”. Perhaps they should take their own advice.

GFI also heavily promotes Impossible Foods, another white male founded, food tech media darling. The leading competitor to Beyond Meat has raised almost $2 billion in investment capital, claiming a valuation of an incredible of $7 billion.

Because Impossible Foods is not a public company, we don’t have access to its revenue or other metrics. But some analysts are extending the concern of overhype of Beyond Meat to Impossible Foods, as well as the entire category. And that is the problem with overhype: other brands that may have a more viable, long-term business plan can be looked upon with suspicion.

Plant-based foods are essential for a variety of important reasons: our health, that of the planet, unspeakable cruelty to animals, just to name a few. And yes, “ego-driven valuations” are definitely a huge problem—because they tend to backfire and undermine the rest of the sector. But the hype will only stop when the white men in power put aside their own egos to allow for more diverse strategies put forth by more diverse voices in the vegan movement.