The Grounded Foods founders Veronica Fil and chef Shaun Quade were obsessed with making vegan cheese that "didn't taste like crap."
The couple aren't vegans or even vegetarians but Quade, who once guest judged the TV competition show Masterchef, had been trying to perfect imitation Camembert, Gruyere and Roquefort while the executive chef at the Australian upscale foraging restaurant Lûmé.
For more than a year he tweaked his recipe serving his clients "cheese" plates made from hemp. When his wife, Fil found out she thought he was onto something. After all, Velveeta is a household name, so why couldn't other faux cheeses be?
A trained economist Fil knew he could mass market the product and thought, "I'm going to steal my husband's recipe, commercialize them and build a company out of them just as a side project."
Veronica Fil, co-founder of Grounded Foods
She did. Grounded Foods was born in 2019. The two went out to find backers and it was then during a meeting with one investor that changed their strategy.
Originally, they hoped to open up a restaurant in West Hollywood to feature their cheese, but when the investor offered $2 million for the recipe they knew they had to think big.
"That's when we reevaluated everything," Fil said. "That was the moment I convinced my partner to just give up on the restaurant and just double down on becoming plant-based cheese moguls."
Fil's side hustle turned into a full time business.
The couple decided to move from Australia to Los Angeles where there is a much larger market for vegan products. Seven days after receiving their first investment of $200,000 in venture capital, the couple sold everything, packed up their poodle, and flew to New York for the accelerator program (Big Idea Ventures), getting ready to commercialize the product.
"When we got to the US, we quickly realized that those products would be too niche for the market here," she said of the Gruyere and other cheeses Quade was serving often as part of a charcuterie board. So they switched to cheese that appealed to the mass market in the U.S. including cheddar.
The company uses a fermentation process that harnesses the proteins and fats contained in hemp and allows them to achieve textures that closely replicate dairy cheese. One of the main ingredients is cauliflower, which has a rich flavor that the company allows it to forgo artificial additives.
Grounded Foods offers three cheeses - a Hemp Seed Cream Cheese, Hemp Seed Goat Cheese that packages in cubes and its Cheese Free Cheese squeeze-on sauce akin to American cheddar. The 8 ounce package ranges in cost from about $4 to $7 dollars. All three are available online and at some Whole Foods Markets and Bristol Farms in Los Angeles.
The global vegan cheese market size was valued at $1 billion in 2019 and is expected to grow at a compound annual rate of 12.8% from 2020 to 2027, according to Grand View Research.
Fil said the product is so good that she thinks the company can go head to head with dairy makers for their customers. Because the product is made of hemp and cauliflower, it is a healthier alternative to dairy cheese that's high in cholesterol and saturated fat.
"I think vegan consumers have options that they already like, we're not trying to compete with that," she said.
The Australian duo announced Wednesday they raised $2.5 million in funding from investors, Big Idea Ventures and Stray Dog Capital, Route 66 Ventures, Nucleus Capital, Kale United, and Presight Capital.
The startup will use the money to get the company through the next six months and act as a buffer throughout the holiday season, as they are expecting this period to be a bit slow.
Fil said they had zero savings when they started the company, "it blows my mind that we've been able to get to the other side of the world and have a company at this level, and be in a position where we can ask investors for another 2.5 million just for the next few months."
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At a time when the clinical health care workforce is suffering from burnout and attrition in the wake of the pandemic, Regard’s technology looks to alleviate some of the pressure on health care workers. The startup’s AI-enabled software is integrated directly into a provider’s system and uses an algorithm to analyze patients’ medical records, allowing physicians to more easily diagnose them.
Since launching its flagship product in 2020, Regard’s technology has been used on more than 30,000 patients, according to the company. The startup charges health care providers around $500 to $700 per month for access, co-founder and CEO Eli Ben-Joseph told dot.LA, with its customers including Torrance Memorial Medical Center, Cedars-Sinai Medical Center and roughly a dozen other hospitals across the U.S.
“We’re building something that’s a game-changer for doctors,” Ben-Joseph said. “It’s helping them catch medical conditions that they would have missed. So regardless of market conditions, we’re able to have value and I think investors saw that and got excited.”
Co-founders from left to right: CEO Eli Ben-Joseph, CTO Thomas Moulia, and COO Nate Wilson. Courtesy of Regard
Founded by pre-med students Ben-Joseph, Nate Wilson and Thomas Moulia in 2017, Regard got its start through Cedars Sinai’s Techstars-backed accelerator program. It was at the accelerator program that Ben-Joseph observed physicians’ workflows and saw the need for a product like Regard’s; he recalled noticing how doctors would constantly pop in and out of a patient’s room, shuttling between the patient and a computer where they could enter data and notes.
“I think that’s why so many doctors are burning out now, as they just don’t have software that really enables them,” Joseph said.
Ben-Joseph—who coupled a bachelor’s degree in bioengineering from MIT with a master’s in computer science from Stanford—noted that Regard’s technology can automatically detect up to 50 of the most common medical conditions, including heart failure, diabetes, obesity, depression and anxiety.
“We have a 90% accuracy rate at the minimum,” he said. “Physicians will look at our software and accept it, but it’s not perfect. We tell physicians to treat it like the relationship [with a] medical student.”
This year’s focus will be different from the typical accelerator: Startups in this group will test their products directly with companies active in the ocean economy for four months, collecting data on what works, what doesn’t and further developing proof of concept. Braid Theory will help these startups come up with their business plan and pitches, and connect them to investors and potential partners in the field. In return, it takes an equity warrant that can be converted after three years.
The startups joining Braid Theory typically span industries like port logistics, aquaculture and energy, all of them aiming to test their technologies and untapped opportunities of the burgeoning industry. The accelerator’s goal is to bring those companies from pre-revenue into commercialization.
And all of them are looking to solve challenges within the blue economy ecosystem, many of which have also been exacerbated by the COVID-19 pandemic. With 31% of all goods floating across the ocean to and from the U.S. pass through the Port of L.A. and the Port of Long Beach, COVID-19 strangled supply chains and increased the volume of goods handled at L.A. 's premiere dock by nearly 16% between 2020 and 2021. This created numerous logistical challenges for the dwindling workforce at the nation’s busiest ports while increasing emissions.
“The thing that we're trying to think about are ways in which we can leverage biological systems and software to make more immediate changes in markets that have a low barrier to entry,” Braid Theory co-founder Jim Cooper said of accelerator’s approach to addressing a wide range of climate and logistical issues.
Cooper founded Braid Theory with his colleague Ann Carpenter after the pair left PortTechLA, a maritime and logistics incubator that shuttered in 2016. The two wanted to create an accelerator for port and ocean startups that went beyond logistics and took into account other promising sectors of the ocean economy, including sustainable fish and plant cultivation as well as tools to make the shipping sector more efficient.
Jim Cooper co-founded Braid Theory with his former colleague from PortTechLA, Ann Carpenter.Image courtesy of Braid Theory
Accelerators like Braid Theory are attempting to fill a void in the blue economy ecosystem. Despite being home to several universities with robust maritime research centers and a giant port infrastructure that could be better optimized, few startups survive in Los Angeles due to a lack of early stage funding, according to a 2020 report from the Los Angeles Economic Development Corporation. The accelerator provides funds and lab space and investor connections to nascent startups tackling a wide range of ocean-related problems.
The same report found that ocean startups, particularly early-stage ones, have a difficult time getting funding to accommodate the need for expensive lab equipment like centrifuges, chillers and pipettes. Startups in the blue economy space are primarily funded through federal and state dollars, NGOs and philanthropies, and competitions. But while angel funding has historically been slow to trickle into blue economy startups, some are starting to take note of the size of the market. In the first cohort, eight out of 12 startups received federal funding and investor funding with the help of Braid Theory.
The accelerator’s first graduating class included Florida-based Tampa DeepSea Xplorers, which makes seafaring autonomous vehicles that can scrape the bottom of the ocean and collect data faster for researchers to use as they study climate change impact or source for different medicines. Irvine-based ReCreate Energy is another graduate, which sources algae to create a more sustainable bio-crude oil that can be used at gas and oil refineries. While FlashQ, a Canada-based AI platform, is trying to reduce truck congestion and the emissions caused by them at the port by creating a scheduling platform that optimizes waiting and shipment times.
“The key is the opportunity, the opportunity was there,” Mimi Carter, a biotech investor with the Pasadena Angels, said of the business opportunities in the ocean market. “We saw a market that was unaddressed and is still an emerging market.”
A cluster of cranes at the Port of Long Beach.Photo by DJANA 575/ Shutterstock
To Carter’s credit, L.A. County boasts 75 miles of coastline that the LAEDC expects by 2023 will produce more than $80 billion in regional output, make roughly $50 billion in gross county product, and create over 200,000 direct and indirect jobs, according to a 2020 report. And, according to the Los Angeles Economic Development Corporation, economic and job growth in this sector relies heavily on the creation and implementation of new technologies, making angel investors necessary players in bolstering the ocean economy.
“Not only do we want to be investing in a sustainable product, but someone we count as a first mover,” Carter said of her investment approach. Already, groups like the Pasadena Angels and Techstars L.A. have made investments in the space. Reece Pacheco, a blue economy angel investor, is quietly working on a new venture fund around the blue tech space that hasn’t been announced yet.
“What we're starting to see is there are entrepreneurs who are either coming up through these research firms, or there are entrepreneurs who have cut their teeth elsewhere but care about the ocean,” Pacheco said.
There’s also Braid Theory’s neighbor (and landlord), AltaSea, the nonprofit research hub that has facilitated a number of partnerships with companies across the world.
“We do want to become the leading destination for the blue economy in terms of technology, finance, the education pathways it takes for students to get into these jobs in the future, and then the actual workforce development for the jobs of the future,” said Terry Tamminen, the new CEO of AltaSea.
Braid Theory’s makeshift shipping container-turned-lab is next door to a slew of other startups and projects in the blue economy space. USC researchers are incubating bubbling cauldrons of kelp that could create biofuels and alternative food sources. While Oceanographer Robert Ballard, who found the Titanic wreckage in 1985, set up a sea exploration program a few doors down.
“The ocean is more than a destination for tourists and a place for Jacques Cousteau and David Attenborough to go diving,” Tamminen said. “It's actually something right at our doorstep that we need to protect for our own survival, but it’s also an economic opportunity.”
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