Cultured meat developer Memphis Meats has raised a $17 million Series A round with a laundry list of well-known investors.
Tesla and SpaceX investor DFJ Venture Capital led the round with Bill Gates and Richard Branson also participating alongside Atomico. New Crop Capital, SOSV, Fifty Years, KBW Ventures, and Inevitable Ventures as well as billionaires Suzy and Jack Welch, Kyle Vogt, and Kimbal Musk.
Notably, Cargill and other unspecified “food industry giants” joined the round, bringing the company’s all time fundraising total to $22 million.
“Investing in Memphis Meats is Cargill Protein’s entry into the cultured protein market. We invested more than $600 million last year in our traditional protein business and remain committed to growing it while exploring additional opportunities to broaden our protein portfolio and offer choices to our customers and consumers,” said Sonya Roberts, president of growth ventures, Cargill Protein to AgFunderNews.
Earlier this year Cargill announced it was selling its last two cattle feedlots, while still purchasing cattle from the buyers for processing. “Selling our two remaining feed yards aligns with our protein growth focus by allowing us to redeploy working capital away from cattle feeding operations to other investments,” said John Keating, president of Cargill’s protein business operations and supply chain, at the time. In 2016, Cargill’s protein division dropped the word “animal” from its name reportedly in order to open the door to alternatives in the department.
This marks the largest raise by far for the cultured meat space which includes Mosa Meat and Finless Foods, both of which have disclosed no fundraising numbers. Hampton Creek has also claimed that it will have a cultured meat product on the market next year, but we do not know how much of the company’s $220 million in total funding is going toward this end. Mosa Meat hosted the first tasting of a lab-grown burger in 2013. Memphis Meats revealed the world’s first cultured meatball in February 2016 and the world’s first cultured poultry in March 2017.
At the Reducetarian Summit in New York City in May, David Kay of Memphis Meats said that the product won’t make it to market until 2021 and Cargill’s Roberts confirmed that this is still the target. Kay noted in May that the cultured chicken product will likely be priced at a premium at launch.
Twenty venture capital investors invested in the 10 cellular ag startups that raised $36 million in funding last year including GV (Google Ventures), Singapore state fund Temasek, Khosla Ventures, and S2G Ventures, according to AgFunder data. This data includes companies producing products other than meat such as leather, gelatin and dairy products.
The main barriers between cultured meat producers and consumers are scale and cost. The manufacturing process to produce cultured meat is similar to fermentation, but has previously been used in the medical field and has still yet to be scaled to commercial levels. Apart from the cost of building a brewery-like facility for production, the inputs required to culture meat are costly. The main input required to culture meat is fetal bovine serum. According to recent reports, Memphis Meats has been working to create a cheaper and preferably, animal-free replacement.
Memphis Meats VP of business development told Gizmodo earlier this year that the company had “validated” its first process and cultured meat without fetal bovine serum. Michael Selden, CEO of cultured fish startup Finless Foods, confirmed in the same report that this achievement could bring down the price of lab-grown meat significantly.
Mosa Meat founder Mark Post’s lab-grown burger cost around $1.2 million per pound. Kay said in May that the last publicized cost of Memphis Meats’ chicken was $6,000 per pound and has dropped since. So progress is steady, but there is still quite a way to go to compete with even the poshest organic, heritage bird.
Though Mosa Meat, Memphis Meats, and Finless Foods have all claimed that they will have a product on shelves by 2021, funding dependent, it’s difficult to say how much funding these companies will need to meet that deadline.