Navigating New Frontiers: Impact Investing in China’s Alternative Protein Sector

About Albert Tseng

Albert Tseng?is a seasoned entrepreneur and impact investor, co-founding Dao Foods International to transform China’s food market through plant-based and alternative proteins. With over 20 years of experience in impact investing, social enterprise, and business development, Albert has a notable background that includes serving as COO at BlueDot and collaborating with Horizons Ventures. He also founded Moonspire Social Ventures, focusing on investments that align with the UN Sustainable Development Goals. Albert holds degrees from Harvard University, the University of Toronto, and the University of Waterloo. His work aims to address global environmental and health challenges by advancing sustainable food solutions in China.

About Dao Foods

Dao Foods International?is an impact-driven investment firm dedicated to revolutionizing the food system in China through plant-based and alternative protein solutions. Founded by Albert Tseng, Dao Foods focuses on addressing the environmental, health, and food safety challenges associated with traditional animal agriculture. The firm invests in innovative companies developing meat and dairy alternatives, synthetic biology, mycelium fermentation, and cultured meat.

China, with its growing consumer base and increasing meat consumption, presents a significant opportunity for alternative protein products. Dao Foods aims to capture this market by supporting entrepreneurs who are creating sustainable and culturally relevant food options. Through its Venture Fund I and Dao Foods Incubator, the firm provides both financial investment and mentorship to help companies scale and succeed. Dao Foods is committed to building a more sustainable and health-conscious food system in China, aligning its mission with broader global goals for social and environmental impact.

Relationship with Bolder and Fund Management

Mike Sim: How has your partnership with Bolder contributed to the growth and management of Dao Foods Funds?

Albert Tseng: When we launched the fund in 2020, there was so much to do.? In addition to establishing the operations of our Incubator, we needed to work globally to raise funding with LPs, as well as recruit, screen and select entrepreneurs and companies.? Not only that, alternative protein was a brand-new concept in China so we also had to spend a lot of time helping to build the entire ecosystem by hosting events and seminars and communicating the opportunity with industry stakeholders.

We recognized the critical importance of fund establishment and fund administration, but it was not something we were experts in and definitely wanted to find a partner who could manage this properly for us.? We assessed several fund administration companies and ultimately selected Bolder Group who we felt listened carefully to our unique needs as a small and emerging fund manager.

Know more about Bolder Group: Singapore - Bolder (boldergroup.com)

The team at Bolder has managed our fund exactly as they promised in their proposal and have assigned capable and responsive fund administrators to coordinate between us, our LPs, and our portfolio companies.? It has allowed us to focus our efforts on our investment strategy and the growth of our companies.

Albert Tseng’s Expertise and Passion

Mike Sim: What inspired you to start Dao Foods International and focus on plant-based and alternative protein companies in China? Can you elaborate on the role of business in addressing social issues, and how you integrate this philosophy into your work with Dao Foods?

Albert Tseng: I appreciated the first 10 years of my career in medical engineering and business in North America, but my travels around the world made me realize that there were many global issues that weren’t being adequately addressed through non-profits alone and that the concepts of Social Business and Impact Investing could be a powerful force for change. This led me through interesting work in HIV health systems (South Africa), economic development in developing countries (United Nations), and a big data startup in predictive analytics for global health (Canada).?

In 2018, I learned about the variety of environmental harms of industrial animal agriculture and saw that while there was food tech and alternative protein innovation and investment happening in the US and Europe, the greatest protein demand in coming decades would come from China (see below charts).? This represented a huge business opportunity and a massive opportunity for impact.

Dao Foods International’s Mission and Challenges

Mike Sim: Can you discuss the competitive landscape for alternative proteins in China and how Dao Foods differentiates itself? What are the biggest obstacles in scaling alternative protein products within China’s diverse and vast market?

Albert Tseng: The alternative protein sector is still quite nascent in China.? While traditional plant proteins are regular parts of the culinary culture in China (tofu, gluten, peas, etc), animal protein consumption continues to rise at high rates.? The impact and business opportunity is to create next generation alternative protein products that can diversify the consumer options for protein and reduce the demand for animal protein sources. The challenge that stands before food innovators and entrepreneurs is producing tasty, price competitive and healthy products that consumers love.? So far, we are at 1.0 so many products have not achieved this and have thus failed in the market.? At Dao Foods, we are convinced that with the right entrepreneurs with the right innovations, the products will improve and win over consumers.

Strategic Goals and Achievements

Mike Sim: How do you measure the success and impact of the companies you invest in? Can you share any recent success stories or milestones achieved by Dao Foods International and its portfolio companies?

Albert Tseng: Impact can only be achieved at scale, which requires successful companies reaching consumers.? An example of a company that is constantly testing the market and seeking to truly understand consumer preferences is Starfield Food Science and Technology.? Dao Foods met the Starfield team in 2019 and participated in their first round of funding in 2020. Since then, Starfield has forged over 100 partnerships and entered 50,000+ restaurants and retail outlets in China, including Sam’s Club, KFC, 7-11, FamilyMart, and Luckin Coffee.

From a funding perspective, Starfield has completed seed, Series A and Series B rounds for a total of more than $100M from top Chinese PE/VCs.

Mike Sim: What role do partnerships and collaborations play in achieving Dao Foods' mission?

Albert Tseng: Dao Foods has mapped out 5 regions of focus in China, each with a population of over 100m to 200m people, and each with diverse and vastly different culinary and business cultures.? We believe that there are many entrepreneurs, investors and food industry executives in these regions who have yet to be exposed to the great potential and opportunity of alternative proteins, and just need to be introduced and inspired to join the movement.? Initially, we focused on China’s top-tier cities Shanghai, Beijing, and Shenzhen, but we have expanded our efforts and activities to other regions such as Chengdu, Chongqing, and Zhengzhou (Summary and video of the China Multi-Region New Protein Initiative).? One example is our collaboration with the Rugao Municipal government in co-hosting the 8th China Next-Gen Good Food Bootcamp and the signing of a strategic collaboration agreement with the local government where Rugao will provide facility and funding support to growth stage sustainable new protein companies.? A second recent example is our 9th China Next Gen Good Food Bootcamp in Zhengzhou, capital city of China’s leading agriculture and food province Henan (with a population of over 100M), where local government stakeholders, big food businesses, and investors were exposed to the importance of protein innovation and diversification. These organizations included government-owned Yuanyang Prepared Dishes Innovation and Industrial Park (where dozens of local food players are domiciled), government-run industrial guidance fund Huirong Fund (RMB billion-level government fund willing to consider investing in tech-driven, bio-related food companies), and China’s biggest pig farming company Muyuan (who expressed an interest in working with Dao Foods to explore protein innovation). With additional resources and dedicated staff, we hope to be able to expand our reach and fly the flag of new proteins to a broader audience in all these untouched cities and regions.???

Future Outlook and Industry Trends

Mike Sim: How do you see the plant-based and alternative protein market evolving in the next 5-10 years, both in China and globally? What emerging trends or innovations in the alternative protein sector are you most excited about?

Albert Tseng: As China’s population gets richer, the demand for protein will rise, as it should.? Attempting to satisfy this demand through the existing livestock system is extremely resource intensive and damaging to the environment.?

Dao Foods is extremely excited about New Protein Entrepreneurs who are creating exciting new protein options for consumers by using a variety of technologies such as biomass fermentation (mycelium, microalgae, etc.), cellular agriculture (synthetic biology and cultivated proteins) and traditional plant proteins (soy, peas, lentils, beans).? The industry is still nascent, with products in their 1.0 to 2.0 revisions.?

However, we are convinced that if resourced properly, these innovations will rapidly improve, with exciting new products expanding the diversity of protein choices within the next 5 to 10 years.

Thank you, Albert for taking time to share with me your impactful venture! I look forward to meeting you in person in November 2024!

Mike Sim

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