Cultivated meat continues to excite governments, LPs and GPs

Venture capital funding for cell-cultured meat start-ups since 2019 has been on an explosive growth trail.

From a base of $60 million raised across the space in 2019, total funding increased more than sixfold to finish at $366 million in 2020. By the end of last year, the figure shot up by more than $1 billion to hit $1.38 billion in 2021, according to the Good Food Institute.

Along with the reassurance that the industry’s LP base grew by 62 percent to 458 unique investors last year – which already included numerous household names such as Walmart and Bill Gates – this year has brought the three biggest nations in food to the table.

China, the largest food importer, turned heads in February when its Ministry of Agriculture and Rural Affairs announced that cultivated meat and “future foods” (other alternative proteins such as plant-based, for example) would be part of its five-year agricultural plan for the first time.

The Netherlands, which is the second-largest exporter of food, followed suit in April when the Dutch government confirmed it will invest an initial €60 million to support the formation of a cellular agriculture industry in the country.

And the US, the largest food exporter, completed the set in September when the Biden administration issued an executive order to advance biotechnology and biomanufacturing in the country.

Despite the momentum, Singapore remains the only jurisdiction to give regulatory approval for cultivated meat to be sold – a landmark reached by San Francisco-based Eat Just’s chicken product in December 2020.

Upside Foods and BlueNalu looked as though they were going to clear the hurdle in the US last year, but that failed to pan out. Upside Foods vice-president of product and regulation Eric Schulze has since said the company still has hopes of getting its first product approved for sale in the US this year.

Agronomics co-founder Anthony Chow can probably be counted among those unfazed by the time being taken to get to market. When comparing cell-cultured meat with plant-based, for example, Chow had this to say in his interview with Agri Investor this week.

“It’s pretty clear to us that the US consumer has spoken on plant-based products, as they’ve stalled on just below 1 percent market share,” Chow said. “So, we made the decision long ago to avoid those and I think that’s turned out to be prescient.”

Executive director Jim Mellon added: “Even though they do quite a good job of imitation, they are processed foods – and most importantly they have very little IP protection. Our background is in biotech, so we’re very keen on IP to provide an economic moat, at least in the beginning, for the companies we’re investing in,” he says.

One company Agronomics has invested into is cell-cultured fish start-up BlueNalu, which believes it has developed the kind of IP that can provide that economic moat.

BlueNalu CEO Lou Cooperhouse earlier this month said the company has “cracked the code” to achieving a 75 percent gross margin on its product, due to innovations in CapEx and OpEx.

The company said it will be able to achieve this margin in 2027 when its 140,000 square foot production facility becomes operational. BlueNalu confirmed to Agri Investor it will be able to do this while selling bluefin tuna toro at price parity with fish markets – bluefin tuna typically sells for around $200 per pound.

It’s no surprise that BlueNalu has targeted a high value product to make its market entry (see vertical farms and high value leafy greens) but the possibility of a cultivated meat or fish product selling at price parity by 2027 does mark a step forward for the industry, at least as far as predictions and forecasts can be trusted.

Only last year Boston Consulting Group predicted price parity may not be achieved until 2032, although that may yet prove accurate with regards to affordably priced cuts of meat, chicken or fish.

What is clear right now is governments, LPs and GPs have all perked their ears up to the clamor around cell-cultured meat.