Why Alexis Ohanian gave a second chance and funding to plant-based meat startup Simulate
As a successful tech founder and investor, Alexis Ohanian has a well-rounded perspective when it comes to determining whether a startup has what it takes to succeed.
Seven Seven Six, the venture capital firm Ohanian founded last year, says on its website that “776 is a reminder to make great achievements, but not repeat great mistakes.”
In June, Seven Seven Six led a $50 million Series B in Stimulate, a company that makes plant-based chicken nuggets under the brand name Nuggs.
“Historically our food system has rejected the use of technology, resulting in a system that is highly inefficient and primitive,” Ben Pasternak, Simulate’s cofounder and CEO, tells Fortune “Simulate was founded to create and protect the intersection of technology and nutrition.”
- Name of Startup: Simulate
- Year Founded: 2018
- Valuation: Over $250 million
- Investment Level: Series B
- Number of Employees: 20
- Location: New York, N.Y.
- Other major investors: Marcy Ventures, Chris Sacca and Crystal Sacca, Nomo Ventures, McCain Foods, Imaginary Ventures, and Day One Ventures
Why he invested, in his own words
I nearly missed being an early investor in Simulate, because a couple years ago when I first tried Nuggs, they weren’t fooling anyone. But a few months later I tried the next iteration of the product and was blown away by how much progress they’d made. That is the kind of velocity in product-improvement I look for as an early stage investor.
I’ve been an early champion of the plant-based food industry, investing in companies like Impossible Foods and Eclipse, as well as executive producing the documentary, Gamechangers—I know that taste is the most important part of the ‘user experience’ of food, especially when it’s plant-based.
Since that first taste and investment, Simulate has quickly made a name for itself as a leading brand, especially among the internet generation. It’s the first product that has ever gotten people going into the frozen foods section of a supermarket to snap a photo and share it on social media. No one is taking selfies with frozen fish sticks.
I led Simulate’s $50 million Series B through my new venture firm Seven Seven Six and joined their board because I believe in their amazing product that people love and continues to get better, just like software. Also, their world-class brand presence online has catapulted their sales offline in places like Target and Walmart.
I’ve been the earliest investor in pure software companies like Patreon and Ro. SIMULATE shares the same characteristics that have made them a leader in the plant-based food industry. Rather than settle for a product that’s “good enough,” Ben Pasternak and the Simulate team have approached their process like a company obsessed with improving and consistently shipping a superior product as if they’re pushing updates to software in the AppStore.
The plant-based food movement is here to stay, and as more and more people wake up to the harmful effects of our factory-animal-processing practices, we can only expect to see greater adoption. Simulate is a pioneer in the industry, and if the stacks of Spicy Nuggs squirreled away in my freezer are any indication, I could not be more excited to see what they cook up next.
This is an installment of Why I Invested, a series featuring famous investors from all different backgrounds and industries, revealing what inspired them to invest their own money in a new business.