A flurry of departures at California-based Finless Foods—one of the first players to enter the cultivated seafood segment—suggests the firm has engaged in a fresh round of layoffs as the funding environment has deteriorated.
The startup—which laid off a tranche of people last April—has not responded to requests for comment, but multiple employees at the Emeryville-based firm added the ‘opentowork’ banner to their LinkedIn profiles in early January, while several have shared posts explaining they are looking for new positions and would appreciate help from industry colleagues.
According to Politico, the company has also recently terminated its lobby firm in Washington DC, Esp Advisors, LLC.
Founded in 2017 by Mike Selden (CEO) and Brian Wyrwas (CIO), Finless Foods has raised $48 million to date. It most recently netted a $34 million series B round in March 2022 led by Hanwha Solutions to fund pilot-scale production of cell-cultured Bluefin tuna and to support the launch of plant-based tuna as a means of generating revenue before its cell-cultured products secured regulatory approvals.
AgFunderNews has reached out to multiple people at Finless Foods for comment but has not had a response. However, one foodtech investor told us: “Finless has struggled to raise capital for some time, and hasn’t advanced the way some competitors have.”
Finless cofounder Mike Selden did not respond to our calls or emails to address rumors that the firm is going into ‘hibernation’ mode, but told delegates at the Future Food-Tech summit in San Francisco last March that the funding environment for cultivated meat and seafood was getting increasingly challenging: “VC is supposed to … create the market. It’s supposed to build the future. And it seems like a lot of people are sort of scared of that now.” Foodtech companies in turn, he said, need to manage expectations “because people are sick of talk.”
The funding environment has been particularly grim for cultivated meat startups over the past year or two, according to Ryan Bethencourt at Sustainable Food Ventures, who predicted in an interview with AgFunderNews in November that, “Probably 70-90% of companies in this space are going to fail over the next year.”
However, it seems somewhat premature to write off an industry that didn’t even exist a decade ago because it can’t immediately compete with a heavily subsidized industry (industrialized animal agriculture) and associated ecosystem that has been scaling up and driving efficiencies for decades, he observed.
“There are still companies that have been able to raise, but these are really the leaders in the space or those with unique technologies,” he said. “And honestly, this [challenging funding environment] applies not just across the future of food space, but across almost every vertical except for maybe AI.”
Laura Turner, principal at Agronomics, which has invested in several cultivated meat players including Meatable and BlueNalu, added: “I’m optimistic the funding environment will improve, but it could still be another 18 months before it picks back up again. And to entice generalist capital back into the space, we need success stories.”
Andrew Ive, founder at Big Idea Ventures, which has invested in multiple players in the cultivated meat ecosystem, said he has been encouraged by the level of interest from governments all over the world that see alt protein as key to food security in the long term.
As for the naysayers, he said, “skeptics have an important role to play, but the world isn’t changed by people telling you how you can’t do something.”
More to follow…