How to Invest in Upside Foods Pre-IPO

Upside Foods is a pioneer in the food industry. It can grow meat in labs, directly from real animal cells, that taste like farm-raised meat. This process is more humane and environmentally friendly than traditional farming.

The company has created the world's first cultivated beef meatball, chicken, and duck. It's in the process of bringing its regulatory-approved chicken filets to market. It has more products in the works, including breakfast sausages and chicken patties.

Upside Foods is hoping to take a big bite out of the $277.9 billion U.S. meat market by enticing carnivores and even some vegetarians to try its cultivated meat products. It's in the very early days of capitalizing on this massive opportunity to produce more socially responsible meat.

The company's enormous opportunity has many investors salivating for its initial public offering (IPO). Here's a guide to everything you need to know about how to invest in Upside Foods ahead of its eventual IPO.

Is it publicly traded?

Is Upside Foods publicly traded?

Upside Foods is a privately held company. It doesn't trade publicly on stock exchanges like the New York Stock Exchange or Nasdaq.

Will they IPO?

When will Upside Foods IPO?

As of late 2023, Upside Foods didn't have an IPO on the calendar. The food technology company likely won't complete an IPO anytime soon. It's still an early-stage company that received approvals from the U.S. Department of Agriculture (USDA) and the Food and Drug Administration (FDA) to sell its cultivated chicken products in 2023.

How to invest

How to buy Upside Foods stock

Most investors can't buy shares of Impossible Foods yet. It's not a publicly traded company, so you aren't able to purchase shares in a brokerage account.

However, accredited investors (i.e., high-net-worth individuals or those with high incomes) can sometimes buy pre-IPO shares of companies like Upside Foods on secondary platforms like Equity Bee or Forge Global. Accredited investors who really want to own shares ahead of its IPO should check out those platforms to see if they have shares available.

Meanwhile, unaccredited investors will have to wait for the company's IPO to buy shares. In the meantime, they can consider alternative food stocks. Here are three top alternatives to Upside Foods that interested investors can buy right now:

Beyond Meat

Beyond Meat (BYND 0.95%) is a leading plant-based meat company. It designs products to have the same taste and texture as animal-based meat. That differs from Upside Foods' approach, as Upside cultivates meat from real animal cells. However, it's a more mature business since it has already released several commercially successful products that generate hundreds of millions of dollars in annual revenue.

Oatly

Oatly (OTLY 14.37%) is the world's largest oat milk company. It focuses on dairy alternatives and has developed and commercialized a growing portfolio including milk, ice cream, yogurt, cooking creams, spreads, and drinks. The company is also mature, having developed several commercially successful products that produce hundreds of millions of dollars in annual revenue.

Tyson

Tyson (TSN -0.43%) is one of the world's largest food companies focused on protein. It has a large portfolio of well-known meat product brands, including Tyson, Jimmy Dean, Hillshire Farm, and Ball Park. However, it also invests in alternatives to animal-based protein. Tyson has a plant-based protein brand, Raised & Rooted, and has partnered with leading global insect-ingredients company Protix to support its global expansion. Meanwhile, an investment in Tyson gives investors some exposure to Upside Foods. The company was an early investor in the cultivated meats company through its venture capital arm, Tyson Ventures, which has participated in several Upside Foods investment rounds.

People who want to buy one of these Upside Foods alternatives can purchase shares in any brokerage account. Here's a step-by-step guide to investing in these food stocks.

• Step 1: Open a brokerage account: You'll have to open and fund a brokerage account before buying shares of any company. If you still need to open one, here are some of the best-rated brokers and trading platforms. Take your time researching the brokers to find the best one for you.
• Step 2: Figure out your budget: Before making your first trade, you'll need to determine how much money you want to invest. You'll then want to decide how to allocate that money. The Motley Fool's investing philosophy recommends building a diversified portfolio of 25 or more stocks you plan to hold for at least five years. You don't have to get there on the first day. For example, if you have $1,000 available to start investing, you might want to begin by allocating that money equally across at least 10 stocks and then grow from there.
• Step 3: Do your research: It's essential to thoroughly research a company before buying its shares. You should learn about how it makes money, its competitors, its balance sheet, and other factors to make sure you have a solid grasp of whether the company can grow value for its shareholders over the long term.
• Step 4: Place an order: Once you've opened and funded a brokerage account, set your investing budget, and researched the stock, it's time to buy shares. The process is relatively straightforward. Go to your brokerage account's order page and fill out all the relevant information, including:
  • The number of shares you want to buy (or the amount you want to invest, to purchase fractional shares).
  • The stock ticker (BYND for Beyond Meat, OTLY for Oatly, or TSN for Tyson).
  • Whether you want to place a limit order or a market order. The Motley Fool recommends using a market order since it guarantees you buy shares immediately at the market price.

Once you complete the order page, click to submit your trade and become a shareholder of one of these Upside Foods alternatives.

Investors would follow a similar process to buy an IPO stock like Upside Foods when it goes public. Once shares become available, select Upside Foods' chosen stock ticker to buy shares through your brokerage account.

Profitability

Is Upside Foods profitable?

Upside Foods is a privately held company and doesn't need to publicly disclose its financial data. As a result, there isn't currently any publicly available information on its revenue or profitability.

However, the company is likely a long way from profitability. It's in the very early stages of commercializing its products. The company received approval from the USDA and FDA to begin selling cultivated chicken to consumers in 2023. It initially plans to sell to select restaurant partners until it has more production capacity to sell products to consumers through other channels. Since it only recently started to record revenue, the company is likely a long way from producing a profit, especially given that it needs to build production facilities to scale up its business while investing in developing new products.

Should I invest?

Should I invest in Upside Foods?

Upside Foods isn't a publicly traded company yet, so only accredited investors can buy shares right now. However, that gives other investors ample time to thoroughly research the company before it goes public. That process might excite you even more to buy shares or could turn you off to investing in the company.

Here are some reasons why you might want to buy shares of Upside Foods:

• You like the company's more humane and environmentally friendly approach to producing meat.
• You think consumers will embrace lab-grown meat products.
• You believe Upside Foods can gobble up a sizable share of the traditional animal protein market.
• You want to invest in a company backed by well-known investors like Bill Gates.
• You believe Upside Foods will eventually be able to sell lab-grown meats that are competitively priced.
• You think the company will eventually reach consistent profitability.

On the other hand, here are some factors that might lead you against investing in Upside Foods stock when it goes public:

• You have concerns about lab-grown meat.
• You think the company's products will be more of a fad and won't take a big bite out of the traditional animal protein market.
• You're not a fan of Bill Gates and prefer not to invest in companies he backs.
• You're not sure if Upside Foods can profitably produce lab-grown meat.

ETF options

ETFs with exposure to Upside Foods

Since Upside Foods isn't yet a publicly traded company, you can't get passive exposure through an exchange-traded fund (ETF).

However, people interested in investing in the future of food have some ETF options to consider. Here are three ETFs focused on food technology and related companies:

• Global X AgTech & Food Innovation ETF (NYSEMKT:KROP): This ETF focuses on companies advancing innovation and technology usage in the agricultural and food sectors, which includes things like vertical farming, hydroponics, and protein/dairy alternatives. The fund held shares of 29 companies in late 2023 and had an ETF expense ratio of 0.5%.
• VegTech Plant-Based Innovation & Climate ETF (EATV 0.06%): This ETF concentrates on companies using plant-based ingredients to make animal-free products. The fund held shares of 36 companies in late 2023 with an expense ratio of 0.75%.
• VanEck Future of Food ETF (NYSEMKT:YUMY): This actively managed ETF invests in companies leading, supplying, disrupting, or benefiting from new environmentally sustainable agricultural and food products. The fund had investments across 43 companies in late 2023 and had an expense ratio of 0.69%.

The bottom line on Upside Foods

Upside Foods is a pioneering food technology company. It's developing lab-grown meat from animal cells that tastes like farm-raised meat. It has massive upside potential as it begins to sell its products to consumers.

However, it's just begun commercializing its products. That would make it a very risky IPO if it completed one soon. Investors need to carefully consider the risks before buying shares of Upside Foods.

FAQs