Everyone’s favorite food-disrupting nutritional slurry, Soylent, has just closed a $20 million funding round, led by existing investor Andreessen Horowitz. Another prior investor in its 2013 $1.5 million seed round, Lerer Ventures, also participated in the new financing, along with Index Ventures.
Announcing the raise on his blog, a16z partner Chris Dixton noted Soylent is already profitable — taking in “millions” of dollars per month in subscription revenues — and is not apparently in need of additional capital, but wants to take money to invest in “long-term R&D”.
What specifically is coming down Soylent’s pipe? Improved taste and a cheaper overall price-point. The mission: to disrupt Big Food with a subscription ecommerce liquid alternative to junk food.
“In addition to improving the current product and introducing new products, the focus will be on dramatically reducing the price of Soylent, from the current $3 per meal to a fraction of that. We are very excited to continue working with [founder] Rob [Rhinehart] and his team on this important project,” said Dixon.
Soylent’s ambitions for growing its business are aimed at eating into Big Food’s junk food business — or at least nibbling its edges, given that junky McBurgers can cost as little as a buck. Pushing its cost per meal to well below $3 would help to position the drink to compete on price with junk food (if not on fingerlickin’ grease), as well as — presumably — allowing its makers to boast about better health credentials.
The drink is comprised of a secret recipe of herbs and spices an assortment of carbohydrates, amino acids, proteins and dozens of other vitamins — and its makers claim it can replace meals, fulfilling all a person’s nutritional needs. (Although Dixon says Soylent is “mostly” replacing unhealthy meals at present, rather than acting as a complete meal replacement.)
Aside from attacking the Big Food industry, Dixon flags up the community of food and nutrition enthusiasts precipitating around Soylent as another core part of the value a16z sees in the company — noting that it sells both core produce and also specific ingredients to those who want to blend up their own DIY nutrition cocktails.
Developing more products to sell to a community of health-focused individuals willing to spend money on their personal well-being is presumably part of the grand Soylent growth plan.
“If you look at Soylent as just a food company, you misjudge the core of the company, the same way you would if you looked at GoPro as just a camera company,” Dixon adds.