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Two Months After Launch, BlueNalu Secures $4.5m in Seed Funding

August 17, 2018

Startups in seafood and aquaculture technology are rapidly growing. Some 32 startups in the sector raised $122 million in funding in 2017, a 180% dollar increase on 2014 when AgFunder data records began and half the number of startups closed deals.

“Our view is that aquaculture is the next phase of precision agriculture,” Andrew Beebe of Obvious Ventures told Quartz in April.

The industry is primed for innovation—according to the UN Food and Agriculture Organization, people are eating double the amount of fish they were eating in the 1960s. Meanwhile, nearly one-third of the commercial wild stocks regularly monitored by the FAO were overfished in 2013, and have been since 2007. With growing global health concerns around the consumption of red meat, consumer demand for fish is only expected to rise. The global aquaculture market is expected to reach $219.42 billion by 2022, according to market research.

Aquaculture, or aqua-farming, is mostly done in freshwater environments such as ponds, land-based tanks, or raceways. But as demand rises, aquaculture expands more into the open ocean—fish farming is expected to produce as much as two-thirds of the world’s fish for consumption by 2030. Some are concerned with the potentially negative impacts of poorly planned or mismanaged fish farms in open water, which can spread pollution through fish feed as well as expose wild species to disease. In addition, one-fifth of global mangrove forests, which play an important role in protecting coastlines, have been replaced by primarily shrimp and fish farms.

To help meet global fish demand while reducing the environmental impact of the industry, some plant-based companies aim to concoct the perfect recipe to mimic the taste and texture of fish—similar to the Impossible Foods and Beyond Burger of meat.

Meanwhile, others are following the new wave of cellular agriculture technology, hoping to turn existing fish cells into lab-grown, real fish for human consumption. And they’re getting pretty close.

Culturing fish: How is it done?

While neither cultured meat nor cultured fish have made it into the consumer market yet, some companies have claimed they will have some sort of lab-grown meat product ready as early as late 2018.

Cultured animal cells have been studied for a number of years, but the world’s first lab-grown beef burger was served in 2013 by Mark Post at the University of Maastricht. It used cells from a live cow that were grown in a nutrient solution—and it cost $330,000 to make.

Animal cells can be obtained from a living organism, as Post did, without causing harm—or, they can be scrapped up from recently deceased fish. While exact methods will vary by lab, culturing meat or fish essentially involves feeding these cells a nutrient solution of salts and sugars, which cause them to divide just as cells would in the body. Most of the time, these cells will double in 24 hours, or sooner. Potentially, an entire meal’s worth of fish or meat can be made with just a few cells. If scalable, this has enormous implications for large-scale meat production.

“Compared to their conventional counterparts, cellular agriculture products have fewer environmental impacts, a safer, purer product, and a more consistent supply,” writes cellular agriculture nonprofit research institute New Harvest. “This is because the product is being produced in safe, sterile, controlled conditions.”

The catch is that this process also requires a protein for the cells’ growth, and typically that protein is made from animal blood—commonly, foetal bovine serum. This serum is exceptionally pricey, and prevents the clean meat industry from becoming completely slaughter-free.

If we can make a lab-grown burger, can’t we make fish?

While coverage of and investment in lab-grown meat is certainly on the rise (in 2017 China signed a $300 million deal to buy lab-grown meat from three Israeli startups), culturing fish is a bit of an untapped market.

For large-scale cultured meat production, critics say energy expenditure could be as high as current beef production. Fish, on the other hand, theoretically has the advantage of requiring less energy. Fish are cold-blooded, so their cells can reproduce at room temperature.

However, while tissue-engineering methods and trials for meat have been relatively well-documented over the years, very little research has been done on culturing fish or amphibians. The basic idea mirrors that of culturing meat, but the conditions under which these cells will grow is unchartered territory for scientists.

“In 2003 I’ve grown, served, and eaten frog meat which is quite similar to fish as they are cold-blooded animals,” says Oron Catts, director of SymbioticA, in an email. “It was not a very efficient way to produce meat, neither was it tasty.”

Cultured Fish Pioneers

Finless Foods has been the first to take cellular agriculture into the marine animal space—they aim to transform bluefin tuna cells into spicy tuna rolls.

“You essentially need to do the science from the ground up,” Michael Selden, cofounder & CEO of Finless Foods told Business Insider. “We’ve had to invent a lot of the protocols.” Last year, they did a public tasting of the first fish cakes made from cultured seafood.

Finless recently raised $3.5 million in seed funding, led by Draper Associates, which they hope will take them to the end of their research and development phase. They’re projected to release a limited amount of the bluefin tuna by the end of 2019.

The biggest challenge? “Getting the price down,” Selden tells CGTN America in an interview. “These technologies are a medical technology, and so they’re very expensive. Our whole technology focuses on taking these areas and just making them affordable for regular people to buy as food.” He says one of the final steps in their development has simply been getting the consistency and “mouth-feel” of typical fish.

And though it’s not there yet, Selden told AgFunderNews that technology at Finless is progressing towards growing fish cells without that animal-derived serum for cell growth.

BlueNalu Enters with $4.5m Seed Round

A potentially major competitor entered the space this week: BlueNalu. Just two months after its launch, the startup from San Diego raised $4.5 million in seed funding, led by New Crop Capital, a private venture fund investing in companies developing meat, dairy, eggs, and seafood with plant-based ingredients or through cellular agriculture. Other investors included 25 venture organizations and individuals from the United States, United Kingdom, Hong Kong, Israel, and Luxembourg.

“BlueNalu will ultimately produce real seafood products directly from fish cells, in a way that is healthy for people, humane for animals, and sustainable for our planet,” the company says.

“This is the largest seed rounds to date in this category, and one of the largest that has occurred globally in the entire ‘clean meat’ space,” Chris Kerr, chief investment officer at New Crop Capital, says in BlueNalu’s press release.

Most interestingly, while BlueNalu has not disclosed its methods, it claims to have avoided that Achilles Heel of the cellular ag industry—its fish is animal serum-free.

If true, this could be what gets BlueNalu ahead in the race to release the first commercially available, culturally grown fish (or meat) product in the world.


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