Neat Burger raises $18M to support expansion

Dive Brief:

Neat Burger, a British plant-based food group that operates restaurants in the U.K., U.S. and United Arab Emirates, raised $18 million in Series B funding last fall, the company announced in a press release Tuesday.
Private investment firm B-Flexion and a fund managed by LionTree, an American investment bank, joined Lewis Hamilton, an existing investor and seven-time Formula 1 champion, in backing the vegan concept.
In April, Neat Burger opened its first U.S. location in Lower Manhattan, and the company says that location is outperforming sales expectations.

Dive Insight:

Neat Burger’s New York store is a prelude to further expansion, as the company plans to open new restaurants in Italy and the Middle East. In October 2022, the company’s first franchised location opened in Dubai in the UAE, according to the press release.

Zack Bishti, co-founder and CEO of Neat Burger, said the New York location and the fundraising opened the possibility of further U.S. expansion as well, based in part on a high rate of repeat visits.

“We see New York as a tastemaker gateway to the US and by all metrics it has been our most successful launch to date,” Bishti said.

Neat Burger’s expansion comes during a turbulent moment in the plant-based market, as some restaurant brands pull back from plant-based offerings, others face troubles, and new product tests continue. Last year, McDonald’s stopped testing its McPlant sandwich following low sales in pilot markets. Plant-based product supplier and McDonald’s partner Beyond Meat now faces a lawsuit from investors claiming it misled them over its growth potential.

However, major brands are continuing to add plant-based menu items. Fogo de Chão has found plant-based fare to be a key part of its efforts to attract younger and more diverse consumers. Chick-fil-A began testing its own plant-based sandwich in several markets earlier this year, and Beyond Meat and Taco Bell launched a plant-based steak test last fall.

Neat Burger’s funding and expansion shows there is still interest from some investors in the plant-based limited-service segment, and the company said it has a growing business-to-business vertical based on partnerships with hospitality groups.