Australia’s agricultural sector is on the radar of the investment community.

The potential to become the “food bowl of Asia” is one common theme, along with the rise of plant-based alternatives to traditional meat products.

But investing in the ag-boom is a more complex investment process than, say, early-stage tech startups looking for seed capital.

Agri-businesses are more capital intensive operations which need advanced supply-chain logistics to become commercial.

So the current framework in Australia can be summarised as: big potential returns – if you’re willing to put up the cash.

Victoria-based EAT Group occupies an interesting position in that landscape, as it positions itself adjacent to the macro shifts under way.

Founded in 2008, its operations include Australian Plant Proteins — a facility in Horsham which extracts proteins from plants and legumes such as chickpeas.

The company is also sourcing capital to establish its King Island premium grass fed beef operations.

Speaking with Stockhead, EAT Group founder and director Gavin Evans highlighted the complexities involved in building a sustainable agri-business.

Who’s afraid of commitment?

As a measure of agriculture’s potential in Australia, the sector is very much in the sights of Main Sequence Ventures, the $230m VC fund backed by the CSIRO.

But Evans highlighted that launching capital-intensive projects can be difficult here.

“I think it’s quite challenging in Australia to raise capital from pre-revenue projects,” he said.

“No matter how strong the investment thesis or the thematic is, we spoke to a lot of groups who found it hard to understand the opportunity and back an idea.”

APP eventually sourced a $20m investment on the basis of an “excellent strategic alignment” with an existing industry player. The funds will be used to build out its manufacturing facility which will eventually produce around 5,000 tonnes of plant protein extract per year.

Ultimately, raising capital for APP took a more sophisticated approach.

Before presenting to investors, “we spent a couple of years refining the intellectual property, planning the facility and de-risking the project”, Evans said.

“These sorts of businesses have complex supply chain assets, and you’re talking about much bigger numbers — it’s not the same as dabbling in one or two small tech rounds. Once you’re talking about commercial scale it falls outside of that family office, $500k-$1m range.”

At the same time, the opportunity is compelling. Government support for the sector is evident and the macro environment is strong, with Australia viewed globally as a high-quality producer of safe food products.

To capitalise on that thematic, APP took steps to offer investors certainty around the demand outlook once the protein is produced (“they’re not quite off-take agreements, but they’re close”), along with its own R&D facility and “a tech solution that’s been proven in other markets”.

“Once you’ve done that, it’s still about getting investors to accept they got to make a pre-revenue commitment to get these things off the ground,” Evans said.


Along with its APP facility, the EAT Group is now sourcing capital for its King Island beef operation. The company is targeting a $25m equity component of a $50m raise, having already secured $25m in debt funding.

EAT’s philosophy is tied to the thesis that the rise of plant-based food won’t cannibalise meat products. Rather the two will be complementary as people become more sophisticated in their diet choices.

“The trend is for the majority of the population to become flexitarian — still eating meat but being more choosy about their animal protein, while increasing the intake of plant-based protein as a percentage of their diet,” Evans said.

And he highlighted that any scalable solution — the group is targeting returns on investment of 15 per cent — will need to have a supply-chain strategy tied to export growth.

“We think it’s difficult to underwrite an investment in agriculture if you’re only looking at the Australian market,” he said.

Creative approach

To foster links with the investment community, EAT Group has created a dual-model platform which provides options for potential investors.

The company accepts direct investments, and also offers exposure to its Agri Select Fund — a portfolio of managed investments.

Ultimately, Evans wants to build a framework with provides EAT with a “strong pipeline of committed capital, where we can be more dynamic in deploying those funds across the portfolio rather than going back to the market each time”.

He said in the current macro environment of low interest rates, sophisticated investors are looking more seriously at agri options as part of a diversified portfolio.

“At the end of the day, you’ve got the supply-chain commitment up front, but with the right opportunities there’s some strong returns on offer,” he said.

“We think it’s an asset class which offers a counter-cyclical hedge to market volatility, because people have to eat.”