By way of plant-based chicken, Daring Foods is creeping up on the leaders of the alternative meat industry like Impossible Foods and Beyond Meat (NASDAQ:BYND). The company is fresh out of a Series B funding round, which means it's set for research, development, and expansion on its commercial-scale products.
But does a hearty funding round equate to a potential public offering? Not necessarily.
Daring Foods scores funding for meatless poultry
In the second funding round, Daring raised $40 million. The company has only been out of stealth mode for a year, so this is a major deal.
According to the company, it plans to use the funding to increase the size of its team three-fold. Daring Foods plans to continue developing its soy-based products while increasing brand awareness through partnerships.
Daring Foods has already struck deals with major grocery chains like Wegmans and Costco. The company also has a partnership with HelloFresh—an industry-leading meal kit delivery service. An expansion could put Daring Foods on par with more prominent names like Quorn Foods, MorningStar, and more. To date, Daring's total fundraising is $48.8 million.
Drake is one of Daring's lead investors.
The $40 million that Daring raised mainly came from institutional investors like D1 Capital Partners, Maveron, and Palm Tree Crew.
However, globally recognized musician Drake has also joined the investment round. This shouldn't be a surprise since Drake is a well-versed investor with his hand in a lot of pots. His most recent investments include WealthSimple (in which he contributed to a private equity round) and Overtime (as part of a series C funding round).
Daring Foods might go public eventually.
After just a year of operation and two funding rounds under its belt, Daring Foods still has a long way to go until it's ready for the public domain. However, this series B serves as a potential springboard to more growth.
Given the company's existing success, it's obvious that there are more opportunities for funding down the line. However, it will take more than a $40 million round to satisfy concerns from the retail sector.
How many funding rounds does it take to go public?
There isn't a set number of funding rounds that a company must complete before an IPO. Most companies pursue 4–5 large rounds before diving into an IPO. Also, going public and remaining a public company is expensive (aggregate costs can reach tens or hundreds of thousands of dollars annually).
Funding for a meatless poultry company amid higher chicken prices
The price of chicken is currently rising. This can be traced back to a supply shortage throughout the food industry. Chicken is one of the many commodities that has faced difficulty since the beginning of the COVID-19 pandemic. It's difficult to say how long it will last, but a large funding round for a plant-based chicken startup is an interesting message at the moment.