Cocoa-Free Chocolate, Sweet Potato Curry & The Secrets of Sandhill Road

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💥 Cocoa-Free Chocolate

Chocolate is one of my guilty indulgences, but parts chocolate’s story are not so sweet.

Cocoa is in the news as the price of cocoa futures reached $10,000/ton last week, up from ~$3,000/ton this time last year.

Price of cocoa futures (Sources: Guardian, Nasdaq)

Cocoa’s soaring prices may not necessarily mean higher pay for farmers. And behind cocoa’s pricing is also a series of concerns:

• 🌱 Environmental concerns: Africa produces 70% of the world’s cocoa. Large producers like Ghana lost 1.4 million acres of forest for cocoa production from 2000 to 2021, associated with nearly 739 million tons of CO2 emissions.

• 🧒 Humanitarian concerns: cocoa production in countries like Ghana is rife with child labor and trafficking, with 1.5 million children working illegally on chocolate farms.

The handful of conglomerates controlling the chocolate supply chain do not pay farmers enough to ensure living wages, promote fair conditions, and invest in sustainable production.

Around 5 million tons of chocolate are produced each year and the demand keeps rising: we need more ethical and sustainable alternatives.

A Willy Wonka-esque chocolate utopia (Source: MidJourney)

Some companies like Alter Eco are working on organic, regenerative, and ethically-sourced cocoa to make more conscious chocolate.

But many start-ups are brewing new innovations altogether: cocoa-free chocolate.

Here are three technologies making the chocolate of the future: cellular agriculture, fermentation, and molecular reconstruction.

1. Cellular Agriculture

California Cultured uses cell-culture technology to grow cocoa plant cells and reproduce chocolate without the plant.

Here’s how it works:

1. 🦠 Cacao cells are selected from cacao variety with the best flavor properties.

2. 🌱 The cells are grown in a controlled bioreactor environment that mimics the nutrients and conditions of the rainforest.

3. 🍫 The cells are harvested, fermented, and roasted to bring out chocolate flavors.

Source: California Cultured, Indie Bio

I got to try their dark chocolate in San Francisco a few weeks ago – and it was delicious. It had a pleasant mouthfeel with fruit and coffee notes.

2. Fermentation

A few companies are using alternative beans and fermentation to reproduce the chocolate flavors we know and love.

UK-based start-up Nukoko is making chocolate from fermenting and roasting fava beans. The team selected a locally-grown and nitrogen-fixing bean to circumvent cocoa’s environmental and humanitarian issues.

The Nukoko team recently raised $1.5M seed round to scale their cocoa-free chocolate. With fava beans, the team is able to make chocolate with 90% fewer carbon emissions and 40% less sugar.

Other companies are in similar pursuits:

• 🍫 Germany’s Planet A Foods makes a cocoa powder alternative from roasted oats and cocoa butter from precision fermented oleaginous yeast to reproduce the taste and mouthfeel of chocolate.

• 🍫 UK’s WNWN makes chocolate from shea butter, fermented barley, and fermented Italian carob to meet the delicious profile of chocolate.

3. Plant-based molecular reconstruction

Companies like Voyage Foods are producing cocoa-free chocolate with alternative ingredients.

This includes vegetable oils, grape seeds, sunflower protein, sugar, and flavors. They recently announced a global distribution partnership with Cargill to bring their cocoa-free and dairy-free chocolate to market.

This partnership will focus on initial applications like ice cream, sweet bakery, and chocolate confectionary.

Cocoa-free chocolate and ice cream (Source: Voyage Foods)

Some start-ups are also taking a different approach, using upcycled ingredients from waste streams. For instance, the Kawa project is making cocoa powder from spent coffee grounds.

Assuming the taste was identical, would you switch to cocoa-free chocolate? Let me know in the comments and who I missed.

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Answer at the end of the newsletter.

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🥘 Recipe: Sweet Potato Curry

You can taste when recipes are made with love 👨‍🍳💕

Let these slow-simmered sweet potatoes, cauliflower, carrots, chickpeas, and lentils in a Thai tomato curry base soothe you in the chilly days before summer.

This curry is also a great way to incorporate the leftover veggies in your fridge before they go to waste.

PS: If you make it, please send pictures! :)

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📚 Book: The Secrets of Sandhill Road

The Secrets of Sand Hill Road by Scott Rupor unveils how VC capital turbocharges start-ups and what every founder should know.

Scott Rupor is a managing partner at a16z and Silicon Valley veteran, previously working with Ben Horowitz at LoudCloud during the dot com boom.

His approachable book is an essential read for first-time founders, with invaluable advice and considerations when raising VC capital.

A few key takeaways:

1. Appreciate the VC Mindset: Venture capitalists look for huge upside in start-ups – 10X or 100X returns – given that most of their investments fail. VC firms tend to be highly specialized to make the right bets.

2. Understand the GP-LP Relationship: Limited Partners (LPs) invest in funds and make returns on the performance of the fund, while General Partners (GPs) deploy capital and earn on management fees and carried interest.

3. Finding the Right Financing Type: Venture capital can make sense for companies without strong cash flow. However, it is also worth exploring non-dilutive options like grants and debt financing with cash flow.

4. Due Diligence Matters: VCs conduct thorough due diligence on start-ups, and start-ups should similarly conduct due diligence on their investors. For instance, the age of the fund matters, as a VC might favor an earlier liquidity event if it could serve her fund’s timeline.

5. Term Sheets and Negotiation: The terms make the deal. Founders should be mindful of terms like common stock, preferred stock, and liquidation preferences, which can have huge consequences in a liquidity event.

6. Long-Term Relationships: Raising a round isn’t just about the money, it's about building long-term relationships. Investors will be on your company’s cap table for quite some time. Founders should look for investors with strategic alignment, industry expertise, and a network of contacts.

7. Maintaining Investor Relations: Transparent communication and regular updates – sharing the good and the bad – is essential to maintain trust. Monthly investor updates are common.

8. Navigating Exits: Venture capitalists earn on their investment through liquidity events like acquisitions or IPOs. Founders should be ready for exit strategies and their implications.

What also surprised me is how small VC funding is compared to other capital like buyout funds or hedge funds, yet the disproportional impact it has on society.

For context, start-ups raised $33B from investors in 2017. At the same time:

• the buyout industry raised $450B

• hedge funds manage $3T

• the US GDP is $17T

Only accounting for a mere 4% of GDP, VC funding supports start-ups that account for 35% of employment and 85% of R&D spend in the US. Mind-blowing.

Start-ups are effective vehicles for change when equipped with the right people, culture, systems, and willpower to do things differently and better.

The fundraising environment is currently tough and I am optimistic it will improve later this year. I hope you enjoy and I’d love to hear what resonates with you.

Some favorite quotes:

• “Live to fight another day” is another great startup mantra to always keep front and center in your mind.

• You have to be partly delusional to start a company given the prospects of success and the need to keep pushing forward in the wake of the constant stream of doubters.

• Whatever the evidence, the fundamental question VCs are trying to answer is: Why back this founder against this problem set versus waiting to see who else may come along with a better organic understanding of the problem?

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Thank you for reading – BRB next week ✌️

With mush love,
Nathan

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📊 Poll answer: it takes 400 cocoa beans to make 1lb of chocolate! There’s around 40 beans per cocoa pod, so 10 pods for 1lb of chocolate. A Theobroma cacao tree bears 20-30 pods per season, enough to make 2-3lbs of chocolate.

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🥘 Recipe: Sweet Potato Curry

Recipe adapted from Nora Cooks

Ingredients (4 portions)

• 2 cups of rice

• 1 tablespoon olive oil

• 1 medium yellow onion, diced

• 3 cloves garlic, minced

• 1 tablespoon fresh ginger, grated

• 2 tablespoons curry powder

• 1 medium sweet potato peeled and cubed small

• 2 cups cauliflower florets

• 2 cups broccoli florets

• 2 medium sized carrots peeled and cut into chunks

• 1 red bell pepper seeded and sliced

• 1 cup of red lentils

• 2 x 13.5-ounce cans coconut milk

• 2 tablespoons Thai red curry paste

• 1 1/2 teaspoons salt, or more to taste

• 1 lime, juice squeezed

• 3 cups fresh baby spinach

• Fresh chopped cilantro, optional

Instructions (40 minutes)

1. Heat the oil in a large pot over medium heat. Add the onion and sauté for 2-3 minutes. Now add the garlic and ginger, and cook for 1 more minute. Add the curry powder and sauté 1-2 minutes more, until fragrant.

2. To the pot, add the sweet potato, cauliflower, broccoli, carrots, red pepper and lentils. Pour in the coconut milk, red curry paste and salt and stir well. Bring to a boil, then simmer for about 10 minutes, until the sweet potatoes and other vegetables are tender.

3. In a small bowl, whisk together the cornstarch with 2 tablespoons water, then stir into the curry to thicken. 

4. Now stir in the sugar, lime juice and the spinach until it wilts. Taste; season with more salt if desired. Serve hot with rice (that you rinsed before cooking!), fresh cilantro, hot sauce and naan. Enjoy with your besties :)

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Two Ways I Can Help:

1. Can I support your start-up, venture, or fund by featuring them in this newsletter? Reply to this email if you’d like to get featured or collaborate.

2. I’m offering tailored business & marketing strategy consulting for start-ups in the alternative protein, precision fermentation, and biomanufacturing space. Book a 1:1 consulting intro call here.

Want to get in touch or chat further? Anything you’d like to hear more of?

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