Deal focus: Prosperity7 widens mandate with Australia’s Vow

Saudi Arabia’s Aramco, the largest oil company in the world, officially launched its latest VC unit, Prosperity7 Ventures, last February although it has been investing under that name since 2020. The short explanation is that the pandemic delayed the PR department. Luckily the investment team had no such hang-ups.

Prosperity7 has already agreed 30 deals while setting up offices in Beijing, Shanghai, New York, and San Francisco. About half the deals are in China and half are in the US; there is a smattering in other regions. Series A is the sweet spot.

Most importantly, this is Aramco’s first stab at a sector-agnostic strategy. The oil giant has invested in energy start-ups since 2012, gradually creeping into tangential parts of the industry. With Prosperity7, the idea is to take a diversified, returns-driven approach to VC and combine it with a strategic vision that transcends any one fund horizon.

“If you look at the top 10 or 20 of the Fortune 500 in 2010, half of them were oil and gas companies. Today, it’s a different picture. Most of the Fortune 100 like the Google, Meta, and Facebook were backed by VCs,” said Aysar Tayeb, Prosperity7’s executive managing director (pictured).

“The question is, what is the picture going to look like in 2030 and 2040? Those champions are definitely going to arise from the VC ecosystem.”

Even with a high level of success, the returns generated by Prosperity7 would equate to little more than a rounding error in Aramco’s overall economics. Yet at USD 1bn, the first fund is massive by early-stage corporate VC standards, and there are expectations to extend the programme with subsequent vehicles of similar scope.

“It’s partially a statement that we’re serious, that this is not just a test for us. We’re setting this up to stay. We’re not tourist investors,” Tayeb said.

The earliest deals stayed close to Aramco’s engineering strengths, preferring areas like robotics and IT. Now, Prosperity7 is leaving that comfort zone, having made its first investment in food-tech as well as its first in Australia.

Last month, the firm co-led a USD 49.2m investment in cell-cultured meat company Vow alongside Sydney-based Blackbird Ventures. The deal was touted as the largest-ever Series A round in the category globally, bringing together Toyota Ventures, Square Peg Capital, Grok Ventures, Cavallo Ventures, Peakbridge, Tenacious Ventures, HostPlus Super, NGS Super, and Pavilion Capital.

Morsel magic

Propserity7 studied the food-tech space for a year before making its move, ultimately deciding plant-based meats were overplayed and subject to too many sustainability concerns around land use. Cell-cultured and fermented proteins were seen as more promising areas for a breakthrough – if economies of scale can be achieved. This is where the Aramco factor comes into play.

Vow, like many alternative protein companies, expounds a passionate environmental agenda that might suggest wariness to take fossil fuel money. But cell-based meat is an asset-heavy world with significant cost burdens in terms of chemical inputs that behove Middle East connections.

“What better place to grow your giga-scale project than a place that has these feedstock resources easily available,” Tayeb said.

Part of the attraction with Vow was an uncommonly sophisticated artificial intelligence (AI) system for sorting out combinations of proteins that Tayeb compares to the way biotech companies use AI to build molecules for new drugs. This process is said to allow for optimal approximations of the textures and tastes in animal-grown meat.

Approximation is the keyword, however. Vow knows that meat-eaters will detect the inferiorities of cell-cultured products in terms of structure and fat. Burger patties and meatballs can get away with it, but proper cuts of meat cannot. When consumers can afford to choose, they will generally go for the real thing.

To circumvent this problem, the company has decided not to attempt copying beef, chicken, pork, fish, or lamb. Instead, it is making a completely new category of meat using cells from 22 species, including crocodiles and alpacas. It’s branded as Morsel and said to have a flavour in the neighbourhood of Japanese-style quail.

Vow is rolling out Morsel with the “chef-first” strategy that worked well for fake meat giant Impossible Foods. The plan is to build hype in trendy restaurants, where consumers are willing to try something new and first impressions are in fancy recipes. Grocery stores come later. Singapore is the test market.

Alternative quail is a decidedly niche play for a VC firm looking for world-changing ideas, but Prosperity7 sees potential in both Vow’s technical abilities and creativity. In theory, the company can continue using AI to invent new meats with new brands. And if that doesn’t work, there’s enough imagination to pivot.

“The common thread is this team has been very resourceful and creative in dealing with the different challenges of cell-based – more than we’ve seen with other teams,” Tayeb said. “That’s important because they will face more challenges going forward as they scale.”

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Australasia
• Early-stage
• Technology
• Consumer
• Australia
• Prosperity7 Ventures
• food & beverage