With private funding for cultivated meat almost drying up in 2024 with a couple of exceptions (here and here) and key players warning that the sector could struggle to survive without a massive influx of public money, where does it go from here?
Speaking at the cellular ag innovation day at Tufts University on Thursday, Steve Simitizis of early-stage agrifoodtech investor Solvable Syndicate noted that “the science is much further along than it was even two years ago, but valuations are at their absolute lowest.”
That said, “I think people have worked through the feelings of, oh no, everything is doomed, and we’re in a good place for growth,” he insisted, despite concerns about souring political sentiment around alt meat in the US, with several states either banning cultivated meat (Florida, Alabama) or seeking to, and signals that prospective HHS secretary Robert F Kennedy Jr. is not in favor.
“The fundamentals haven’t changed. The climate is continuing to warm, supply chains will continue to be under stress, and people are still going to need food. We just saw what happened with [surging] egg prices and cocoa prices. No one could have imagined that cocoa would be outperforming bitcoin and cryptocurrency. And we’re going to see that happen to commodity after commodity. We’re already seeing pressure on dairy and cattle.”
Meanwhile, “biomanufacturing actually could be emphasized under Trump,” he speculated. “We heard China is going to be making big pushes around cellular agriculture and biomanufacturing and there’s this feeling that we need to compete against that. So there’s this new space race dynamic that I think, that I hope, will emerge over the next year or two.”
AgFunder data shows that funding for cultivated meat startups peaked at $989 million in 2021, dipped to $807 million in 2022 and then fell to $177 million in 2023.
Worryingly for startups in the space, there is little evidence that things picked up in 2024. Preliminary data indicates just two notable rounds in the sector (Mosa Meat’s $43 million raise in April and Ever After Foods’ $10 million raise in June) and undisclosed rounds for Hoxton Farms, Meatly and Meatosys. However, some companies with tech relevant to the industry including Prolific Machines (which harnesses light-sensitive proteins to control cells used in biomanufacturing) raised significant sums during the year.
Meat industry partnerships
In this environment, partnerships with large meat companies may be critical to get the tech off the ground, said Simitzis, echoing comments made by Andrew Ive at Big Idea Ventures at the Future Food-Tech summit in London last fall and Meatable’s new CEO Jeff Tripician.
“I think earlier in the cultivated meat space, there was a lot of focus on these amazing chef tastings. Let’s sell this [to] consumers, figure out the right branding. But I think meat producers are ultimately going to be the customer of this [cultivated meat].
“And that’s where we can see approaches like bringing in or blending in ground meat, for example, into existing supply chains. Let’s get it into fast food at maybe 1% or 2% to start… that would be enormously impactful, rather than try to push consumers to buy a brand of cultivated steaks. I also think there’s a lot of opportunity in pet food, again, through working with existing brands to get ingredients into their supply chain.”
Cultivated meat ‘in a weird space’
Bruce Friedrich, founder and president at alt protein advocacy group the Good Food Institute (GFI), added: “The meat industry is incredibly inefficient. For 12,000 years, we’ve been growing crops to feed them to animals so that we can eat animals. The most efficient animal turning crops into meat is chicken and it still takes nine calories into a chicken to get one calorie back out in the form of meat. We can improve those metrics with cellular agriculture… and that’s why ADM, Nestlé, JBS, Tyson, and Cargill… are not wedded to the inefficiencies of the current production system.”
Nonetheless, cultivated meat “is a weird space where it’s going to take a ton of money to get all the way, because there’s no ecosystem in place,” claimed Steven Finn at growth equity investor Siddhi Capital, an investor in several cultivated meat companies including cultivated seafood firm BlueNalu, and now-defunct startups New Age Eats and SCiFi Foods.
“It will take government support to get the ecosystem in place such that investors like us can write much smaller checks that are fundamentally de-risked and not have to take all that risk on.”
Meanwhile, starting with a high-value product such as Bluefin tuna makes for more appealing unit economics out of the gate, said Finn. “Bluefin toro tuna is 100 bucks a pound, what you can pull out of the ocean is half mercury and microplastics, and it’s hard to farm. So there is a real demand for clean tuna [that could be produced from cells in a bioreactor] in a way that maybe doesn’t exist for clean chicken or beef, which is [worth] maybe five or 10 bucks a pound and could be as cheap as one or two.”
New Age Eats and SCiFi Foods: what went wrong?
Having the right cap table is also critical, said Finn , something that became clear at New Age Eats (which called it quits in 2023) and SCiFi Foods (which closed shop in 2024).
“New Age had as a lead a corporate that was fundamentally misaligned with what New Age wanted to do from day one. New Age wanted to sell consumer sausages, whereas its lead investor wanted a cultivated pork fat company. It took the money because it felt like it had to, with a view that it would get a financial lead [investor] the next time. But that fundamental misalignment never broke at all.
“And when things got tough, there was not enough good blood there to keep it going from the perspective of the corporate lead, and there was not enough outside interest to pump it up without the support of the previous lead. So that’s a really easy way to die.”
SCiFi Foods meanwhile, “had a lead that was a brand name global financial investor with the ability to raise tons of capital, which effectively pushed everybody else out. Its model was, we’re going to come in and take it all because we can, and if it works, we’re going to keep taking it all, and if it doesn’t work, we’re going to go take all of something else,” claimed Finn.
“And it basically just walked away in the night. Where that left the company was with a bunch of investors who were all small potatoes because we were all pushed out of the previous couple rounds and not even given the chance to get the meaningful skin in the game that might have given us the opportunity to say we want to save this thing.”
In both cases, while very different, he said, “the lead investor leaves and you have no one else around the table, and it costs too much money to get from here to there.”
De-risking cultivated meat
Stepping back, said Meghan McGill, senior investment associate at Breakthrough Energy Ventures, “A lot of conversations over the past year have been about the missing middle and how it’s hard to fund when you’re beyond early stage VC but not mature enough yet for these more risk averse investors.”
In such scenarios, offtake agreements from partners can significantly de-risk investments, said McGill, citing the recent large Series B round for plant cell culture startup GALY, which makes cotton from cells in bioreactors. “The key to securing that next financing was that they got a long-term offtake agreement. We’re seeing companies across the climate tech space do this, whether it’s in sustainable aviation fuel and now Galy with its cotton.
“Having someone come in and say, I’m going to buy this from you for 10 years, and I’m committing this much money, it just brings down the market risk so much. But it’s a bit of a chicken and egg thing, where if you want to get to good unit economics, you need to build a larger plant, but in order to build a larger plant, you need money.”
Government interest in cellular ag
According to Friedrich at the GFI, who has spent years building connections between academics, startups, corporates, NGOs, and governments in the alternative protein space, progress is being made, however.
“In 2024 we saw so many hopeful examples from governments around the world. India is taking multiple steps including integrating cellular agriculture into its bioeconomy plan… Israel is integrating alternative proteins into its national security plans. And in Brazil, both the science ministry and the agricultural ministry are leaning in on these new ways of making meat.”
Dr. David Kaplan, Tufts: Firms too wedded to traditional pharma approaches
As for the technology, said Tufts University Center for Cellular Agriculture (TUCCA) director Dr. David Kaplan, significant progress has been made on cell lines, cell media, and using AI to optimize both.
However, too many firms remain wedded to “traditional pharma approaches to scale up with stainless steel tanks,” added Kaplan, a professor of biomedical engineering who launched the cell ag center at Tufts in 2020 and secured a $10 million grant from USDA in 2021 to establish the National Institute for Cellular Agriculture within Tufts University.
“We still need a lot of you out there to rethink the entire paradigm. It doesn’t mean we’re not going to use pharma methods, but we need more than just pharma methods. This is a great opportunity to rethink the entire process of how to build a system. It may be things we don’t even know what they look like today, to take plant waste or brewery waste and grow cells on there in a way that we haven’t even thought about before.”
As for scaffolding, which can be used to create more structured cultivated meat products, he said, “It’s astounding, how [big] the gap is between what we produce today for edible food-safe carriers, and what the needs are going to be as this field takes off. So there’s a lot of need to think about not just scale up for production of cells, but also scale up for the biomaterial fundamentals that are going to go into all these products that just doesn’t exist today.
“The only real commodity product out there available today to meet the needs is cellulose, which is a great starting point as it’s cheap and available, but it’s a non-digestible polymer in the human body, so we need innovation there.”
Looking at cell ag more broadly, he added, “What I don’t see is the innovation in what I would call non-traditional cell sources as host systems to produce alt proteins, or as the cells themselves. How do we bring insect cells to the floor? And it doesn’t have to be insect cells. There’s so many fungi out there and so many bacteria, but traditionally, we’ve picked only a handful or a dozen that are the usual suspects to grow and produce these proteins.
“How do we pick the right ones? And that’s where AI and related tools are going to play a bigger and bigger role going forward.”
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