Exo makes protein bars made from…crickets. And they’ve just raised a $1.2 million seed round to help get the protein-filled product out there.
For the record, crickets need a lot less feed than cattle, sheep and pigs to produce the same amount of protein – and they don’t emit methane gas, for the environmentally-concerned..
So, yes, it is Exo, as in ‘exoskeleton,’ and it’s cricket flour, actually, which happens to be gluten-free (and paleo approved), good for you and once you taste them, you’d have to believe that it’s just not cricket. Not that you’d notice, that is.
The company graduated from AccelFoods Accelerator’s inaugural class and also mounted a very successful Kickstarter campaign. Their investors were a mix of food and tech investors and cofounder Gabi Lewis explains how they wrangled tech investors into putting their money into something this, um, buggy.
Who were your investors?
Our investors include Collaborative Fund (Prior Investments: Lyft, Kickstarter, Hampton Creek Foods, etc.), Start Garden (Prior Investments: Boxed Water is Better, Zipments, etc.), and Tim Ferriss (Prior Investments: Twitter, Uber, Alibaba, etc.).
What was the funding process like?
Surprisingly fast–we found a handful of awesome investors who were passionate about the mission fairly early on in the process.
What are the biggest challenges that you faced while raising capital?
Balancing the expectations and needs of food investors and tech investors simultaneously was quite challenging–we occupy a pretty unique space that exists at the overlap of those two spheres. Although there are some investors with experience in both worlds–and we were lucky to eventually find such investors–the two groups speak different languages and can have vastly different expectations around things like valuation.
What factors about your business led your investors to write the check?
The opportunity to define and dominate an entirely new food category doesn’t come around often and I think that’s pretty exciting to a lot of investors. We also have social impact built into the very foundations of our business–if we’re successful at selling product, then we’re successful at shifting eating habits in a more sustainable and healthful direction. Doing well and doing good are rarely so directly linked. Because of these factors, we’ve already been able to attract an incredible team at such an early stage–our Head of R&D came to us from the former #1 restaurant in the world, for example.
What advice can you offer companies in NY that do not have a fresh injection of capital in the bank?
Assuming they want a fresh injection of capital in the bank (and I think often entrepreneurs assume they want or need extra capital when it isn’t actually needed), then I’d encourage them to think carefully about constructing an optimal portfolio of investors who can help them in different ways, beyond the cash. At Exo, we wanted some investors with megaphones who could help us sell a lot of protein bars online in the near term, as well as some investors with more traditional backgrounds in CPG who could help us navigate retail, and so on.
How do you maintain a supply of crickets?
We work closely with a handful of domestic cricket farms to ensure a sufficient supply of human-grade, organic non-GMO crickets.
Where do you see the company going now over the near term?
Over the next few months, we’re focused on making great protein bars. But we plan to move beyond those initial products pretty quickly, and release a wider range of food products with insect protein being the unifying theme.
Would you recommend that startups consider a kickstarter campaign?
It depends entirely on their goals. Unless the product is very unique, executing on a successful kickstarter is surprisingly hard, and extremely time consuming. If a startup is trying to raise initial funding, I’d say there are probably easier and quicker ways to accomplish the same goal. But if press and buzz are the main goals, a kickstarter can be a great launch strategy.
What’s your favorite restaurant in New York?
Ceveceria Havemeyer in Williamsburg.