Israeli Cheese-substitute Maker Weighs IPO on Tel Aviv Stock Exchange

Vgarden, controlled by Kibbutz Gan Shmuel, is riding global foodtech wave

Eran Azran
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A screenshot of products seen on the company's website.
A screenshot of products seen on the company's website.Credit: Screenshot
Eran Azran

The Tel Aviv Stock Exchange already has two companies in the meat-substitute business amid growing interest in food technology, so a cheese-substitute company is a natural for a listing.

That may be happening soon: TheMarker has learned that Kibbutz Gan Shmuel is taking the first steps toward an initial public offering in its company Vgarden, a maker of yellow cheese, cream cheese, ricotta and feta all without milk.

Vgarden declined to comment on the IPO rpeorts, but sources said the plan right now is to sell shares at the start of next year at an IPO that values the company at 350 million shekels ($102 million).

The Israeli and global foodtech industries are burgeoning as consumers opt for healthier alternatives to animal fat and disapprove of the way animals are treated. Global investment in foodtech startups has grown from $2.2 billion in 2013 to $20 billion last year according AgFunder, a venture capital manager specializing in the industry.

The global industry got a big push in May 2019 when Beyond Meat went public on Wall Street at a $1.5 billion valuation in the first IPO of a meat-substitute company. Since then its market cap has soared to $10 billion.

In Israel, there are some 250 foodtech companies and investment in them has grown from $52 million in 2013 to $135 million in 2019, data from Crunchbase show. Israel has emerged as a footech power, drawing the interest of global industry leaders such as InBev AB, which has opened a research and development center here.

Foodtech companies have made their way to the TASE, too. Millennium Foodtech, an R&D partnership specializing in the sector, went public in July. Its first investment was in SavorEat, which is developing a method to create plant-based meat substitutes using cellulose and 3D-printing technology.

MeaTech, which is also developing 3D-printing technology to make meat substitutes, has seen its TASE shares soar 120% this year to give it a market capitalization of 280 million shekels. In June, it raised another 20 million in a secondary offering on the TASE.

Vgarden’s cheeses are a good match for health-conscious consumers, not to mention Jews who keep kosher. Its products, sold under the Mashumashu brand name since 2016, contain no preservatives, lactose, gluten, trans fats or cholesterol and don’t use any genetically modified organisms, or GMOs. It also makes meat substitutes for the institutional market. Hadar Food Technology, which co-owns Vgarden with Gan Shmuel, is responsible for developing new products.

Gan Shmuel is not new to the TASE. Its 41%-owned Gan Shmuel Food, a developer and maker of fruit- and vegetable-based inputs for the food and beverage industry, has a market cap of 500 million shekels.

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