Nuggs Maker Simulate Bought By Ahimsa Companies After Period of Uncertainty for the ‘Tesla of Chicken’

Vegan chicken startup Simulate, famous for its Nuggs, has been acquired by Ahimsa Companies to get the business back on track after months of (dis)quiet.

Simulate, the plant-based meat brand known for its meme-famous Nuggs, has been taken over by Ahimsa Companies, a recently formed holding company.

First reported by Axios, the deal is a combination of cash and equity (the amount was undisclosed), and will be used to help the startup return to shelves and consumer’s plates. In recent months, its products have reportedly disappeared from grocery stores, leaving many wondering whether the business was going under.

Having raised $57M already, Simulate chose to find a buyer rather than try and secure more money in an increasingly difficult funding environment for plant-based meat companies.

It comes months after Ahimsa Companies, which is affiliated with the Ahimsa Foundation, bought vegan food brand Wicked Kitchen and its subsidiaries Good Catch and Current Foods for an undisclosed sum.

Simulate’s journey from lockdown-favourite to recent struggles

Simulate first came on the scene in 2018, with founders Ben Pasternak and Sam Terris banking on the company’s tech-forward software-like approach – which involves constantly improving its formula and publishing its updates – to win customers over.

The social-media-savvy brand became (in)famous for controversial taglines such as ‘the Tesla of chicken’ and ‘Kill you slower’, leaning it to a silly-yet-serious approach that left a lot of impressions (and memes). The startup’s investors include Reddit co-founder Alex Ohanian, hip-hop legend Jay-Z, and frozen food behemoth McCain Foods.

The brand blew up during Covid-19, with its frozen chicken nuggets reaching online consumers at a time when most other vegan alternatives were only available in retail stores. By the end of 2021, its annual revenue hit $8M.

Simulate had also introduced vegan chicken breast, tenders, strips, cutlets, and the now-discontinued discs, and was once valued at $250M. But then, at the end of 2023, Pasternak stepped down as CEO (remaining as chairman), with Terris (who was COO) taking over.

“This was a decision Ben and I made together over many months, and we ultimately aligned that this would be best for Simulate as we scale up our new technology,” Terris told Forbes at the time.

In the last few months, things have been muted. The brand’s social media – its best marketing too – had largely gone quiet, with no posts since the end of June. The previous two were related to a new product, Insta-Chicken, that the brand said it would release online (but can’t be seen on its website now).

This led many fans online to wonder if this was it for Simulate. “Are you still going to make nuggets? The stores near me(in Philly)have stopped carrying them & I read you might be getting rid of them,” wrote one Instagram user. On a Reddit thread titled ‘Has Simulate Nuggs Gone Out of Business?’, customers said the brand’s website was down at one point, and its products could no longer be found on shelves.

Now, the mystery is out, and it seems Simulate is getting back on its feet. “We’ve spent the last year searching extensively for the right mission-aligned partner to help push Simulate’s technology forward. We found our match in Ahimsa,” Terris wrote on LinkedIn. “Feeling especially grateful today for our team (past and present), the Board, our investors, and NUGGS fans everywhere.”

Ahimsa Companies looks to amp up M&As

Ahimsa Companies’s takeover of Simulate is the latest in an increasingly lengthy list of M&A deals in the plant-based sector, and the food tech industry overall. Research has shown that M&A activity in the food business reached an eight-year-high in the first four months of this year. And in Q2, the number of deals was up by a third compared to the same period last year.

Vegan chicken startup VFC’s evolution into the Vegan Food Group, a holding company that now owns Meatless Farm, Clive’s Purely Plants and Tofutown, is one of the most prominent examples of the importance of consolidation in the plant-based meat sector, which has faced sales and investment declines since the tail-end of the pandemic.

“There’s been a lot of cash deployed to develop great products, brands and technology, but not under the right economic conditions to thrive,” Ahimsa Companies CEO Matthew Tullman told Axios. “To carry forth the plant-based movement, consolidation is really required.”

He outlined why driving the industry forward is important. “It is impossible to conceive of a future (in which) we can feed seven-to-10 billion humans on an animal-based diet,” he said, noting that he still has hopes for “a plant-forward future”, but the industry doesn’t work well with the typical venture capital timeline anymore.

Tullmann confirmed that Ahimsa Companies had no operational overlap with the Ahimsa Foundation, whose head Satish Karandikar is an investor in the holding company, and which led a funding round for alternative protein startup Eat Just last year.

As part of a roll-up strategy, Ahimsa Companies is now looking at companies in the precision fermentation, cultivated meat, extruded pea protein, non-dairy alternative, and plant-based food segments – it already has two larger deals in the pipeline, according to Axios. Additionally, it has bought a 50,000 sq ft factory in Ohio to produce meat analogues.

The vegan nugget category is lucrative, but also overcrowded and highly competitive. In the US alone, there are 20 brands of plant-based chicken nuggets, such as Gardein, Quorn, Beyond Meat Impossible, Jack & Annie’s, Alpha Foods, Daring, MorningStar Farms, Yves, Rebellyous, LikeMeat and Boca – and that’s before you get to private-label brands. That has made it hard for companies to stand out, and some, like Nowadays, have exited the space.

Simulate seemed to have been facing a similar squeeze. But it will be buoyed by the takeover, and the fact that people love vegan nuggets – more so than even the conventional thing. In a recent taste test, more meat-eaters liked plant-based nuggets made by a leading brand (70%) than chicken-based versions (53%), and Simulate was among four other companies identified as the leaders.

“Generally, breaded and fried plant-based meat categories receive higher ratings than non-breaded and fried categories,” explained Caroline Cotto, director of Nectar, which carried out the research. “These products stood out for their superior flavour, which was most central to overall liking.”