Soylent, a startup that offers a powder mixture that can act as a replacement for food, got a $US20 million investment from top venture capital firms Andreessen Horowitz, Lerer Ventures, and Index Ventures.
Chris Dixon, who works at Andreessen Horowitz, wrote a blog post explaining the firm’s investment in Soylent.
Dixon thinks people are missing the big picture when it comes to Soylent. He was struck by the community Soylent has built around its product, comparing it to GoPro.
“Many investors decided not to invest in GoPro because they saw it as a camera company, and camera companies generally get quickly commoditized. However, investors who properly understood GoPro saw it primarily as a highly engaged community of sports enthusiasts, something that is very hard for competitors to replicate.”
Dixon believes the community Soylent has built around its product is irreplaceable and that “this community of people who are enthusiastic about using science to improve food” makes the company “an obvious investment.”
“If you look at Soylent as just a food company, you misjudge the core of the company, the same way you would if you looked at GoPro as just a camera company,” says Dixon.
Though Soylent only makes money by selling its food product, the brand also hosts an active discussion forum and a DIY Soylent site where users share their own Soylent recipes.
The company has grown exponentially since its 2013 seed round and currently generates millions of dollars per month in subscription revenues.
Here’s how Soylent works: You can subscribe for $US70 per month, and you get 7 bags of Soylent, which should last you a month. It will make 21 meals. Or you can buy 7 bags for a one time fee for $US85. Here’s the full pricing:
Soylent is currently profitable, so it will use its additional fund to invest in long-term R&D.
According to Dixon, the food industry is ripe for disruption. He explains that for too long the industry and research surrounding nutrition has been dominated by self-interested traditional food companies that have left consumers confused, sick, and unhappy.
He believes Soylent isn’t some high-end smoothie, it’s a convenient, affordable, and nutritious replacement for unhealthy meals.
“Soylent inverts the Big Food business model, spending nothing on advertising and distributing solely through e-commerce,” he says. “Soylent’s ‘marketing plan’ is to invest in its online community and in peer-reviewed scientific studies.”
Along with improving its current product, Soylent plans to introduce several new products and dramatically reduce the price of Soylent from the current $US3 per meal to a fraction of that.
Disclosure: Marc Andreessen, co-founder of Andreessen Horowitz, is an investor in Business Insider.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.