No Evil Foods Secures New Financing
After facing financial challenges that led to layoffs and a pivot in manufacturing, plant-based meat brand No Evil Foods yesterday announced it had secured bridge note financing from Big Idea Ventures’ New Protein Fund I. The brand plans to use the capital to execute a previously announced switch from self-manufacturing to co-packing and to launch new innovations. The amount of the loan was not disclosed.
Founded in 2014 and sold at retailers like Whole Foods, Sprouts and Walmart, the brand offers a number of plant-based meat alternatives including Comrade Cluck (vegan chicken) and El Capitan (vegan crumbled chorizo). Meanwhile, Big Idea Venture’s $50 million New Protein Fund I invests in early-stage plant-based and cell-based food companies as well as innovators in food tech and ingredients. Its portfolio includes Actual Veggies, Melibio and Aqua Cultured Foods.
Previous investor Siddhi Capital remains a shareholder in the business, Woliansky said, with the firm’s co-founder and general partner Melissa Facchina remaining on No Evil’s board of directors.
Big Idea Ventures Chief Investment Officer Tom Mastrobuoni said he’s known No Evil’s co-founders, CEO Mike Woliansky and Chief Creative Officer Sadrah Schadel, since his time as CFO at Tyson Ventures, where he worked from 2017 to 2019. He called the pair “smart operators.”
“Investing is a long term relationship business,” he said. “No Evil has strong brand recognition, broad distribution and a clean label approach we find unique and differentiating in a highly crowded space.”
Securing funding has not been easy for the brand. In June, negotiations for an influx of capital “fell through suddenly,” Woliansky told NOSH at the time, though it was able to secure approximately $2.5 million to cover operating expenses. Soon after, the company laid off over 45 employees, including its full production team, along with R&D, sales and plant management staff, shuttering its North Carolina manufacturing facility and shifting to co-manufacturing in Illinois. The cash crunch came after the company also paid former employees $45,000 in legal settlements last October following labor disputes regarding unionization.
The new funding will further support this manufacturing shift, which Woliansky said has been a “huge challenge” but is the “way we are able to move forward.”
Capital will also be used to back new product launches, including taking to retail a shelf-stable jerky first previewed in 2019. The plant-based “beef strip” line, set for early 2022, will also help No Evil gain new merchandising, field marketing and direct-to-consumer sales opportunities, Woliansky said. The company is also continuing to work on lowering prices, Woliansky said, cutting suggested retail prices of its products from $7.99 to $5.99 over the last two years.
Competing against Impossible Foods and Beyond Meat is no easy task, Schadel noted, especially as these companies amass the support of nine-figure investment deals. As a result, she’s noticed smaller plant-based brands like No Evil Foods can find themselves in a “limbo space” in terms of fundraising, where it takes “surprisingly little effort to throw a brand off track.”
“We have so many wonderful financial partners in our space that do a really great job of getting brands to step A and step B. There’s a gap there, that exists, that’s difficult for those financial partners to get those same brands to step C, D, and E,” Schadel said. ”You’ve got some really great traction, but then what’s the next step? And that’s [what we ran] into — not as much support as we would like to see.”
While the brand has faced notable and widely publicized financial and labor struggles, Mastrobuoni said Big Idea Ventures recognizes that “building and operating a business is not an easy, linear exercise” and was still eager to partner with the team. What matters most, he noted, is how a company handles issues and if its team can demonstrate tenacity.
“Have there been challenges? Of course there have been, and tomorrow we’ll deal with a whole other set of challenges,” he said. “The No Evil team has done exactly what we would expect them to do. Picked themselves up, leaned into the difficulty, made the necessary changes and moved forward.”
No Evil aims to raise more funding next year, Schadel said. Once the company is able to “get more stability” in its finances, it also anticipates hiring new team members.
“I think that we have used this time to refine our strategy to develop and really laser focus our vision for what we want out of this company,” she said. “We are better positioned in terms of strategy and vision as a company than we’ve been at any other point in our existence.”
