May 3, 2018

The nascent cultured meat segment continues to garner votes of confidence from investors as two more companies (both out of Israel) announced successful funding rounds this week.

Future Meat

The first is a $2.2 million Seed Round announced by Future Meat Technology, an Israeli startup focusing on developing next-generation technologies for the efficient commercial production of lab-grown animal fat and muscle cells without genetic modification or the harvesting of animals.

This round was co-led by Tyson Ventures, and included Israeli food conglomerate the Neto Group; Chicago-based venture capital fund S2G Ventures; Chinese foodtech venture capital fund BitsXBites; Agrinnovation, the investment fund launched by Yissum; the Technology Transfer Company of The Hebrew University; and HB Ventures.

This is not Tyson’s first investment in an alternative animal protein, having been an existing high profile  investor in Beyond Meat. However, this investment does represent Tyson’s first investment in an Israeli company.

“This is our first investment in an Israel-based company and we’re excited about this opportunity to broaden our exposure to innovative, new ways of producing protein,” said Justin Whitmore, executive vice president, corporate strategy and chief sustainability officer of Tyson Foods. “We continue to invest significantly in our traditional meat business but also believe in exploring additional opportunities for growth that give consumers more choices.”

Future Meat is the only company at this point that is able to conduct non-GMO production of animal fat – the component that provides meat’s unique flavor and aroma, and what “makes our mouths water”, notes Professor Yaakov Nahmias, founder and chief scientist with Future Meat. Through development, the company has also been able to redesign its processes to significantly lower its cost of production.

“It is difficult to imagine cultured meat becoming a reality with a current production price of about $10,000 per kilogram,” said Prof. Yaakov Nahmias, the company’s founder and chief scientist. “We redesigned the manufacturing process until we brought it down to $800 per kilogram today, with a clear roadmap to $5-10 per kg by 2020.”

Currently in the process of recruiting new engineers, chefs, and scientists, Future Meat Technologies is planning to use this fresh capital to fund the establishment of its engineering activities and to expand its biological research.

SuperMeat

The second clean meat funding announcement this week came from SuperMeat – another Israeli clean meat player that has added follow-on funding to its Seed Round bringing the round to $4 million with the addition of investors from the U.S. and Asia. In addition, Soglowek, a top Israeli meat company, announced its plans to launch a line of plant-based foods, pledging it will commit 20 percent of the profits from the line to SuperMeat and its pursuit of clean meat production.

“With the ever-rising global meat consumption, Soglowek is looking into the future,” said the company in a statement reports Food Navigator-Asia. “Alongside the launch of our plant-based line, Soglowek chooses to support the SuperMeat project, and the development of an animal-free meat manufacturing technology.

Initially, SuperMeat announced in the first days of January that it had raised a $3 million Seed Round backed by U.S.-based venture capital fund New Crop Capital, mission-focused venture capital firm Stray Dog Capital, and European poultry producer PHW.

Founded in Tel Aviv in 2015, SuperMeat produces what it calls “clean meat” by propagating cells extracted from a chicken, creating a system that eliminates breeding, hatching, raising, and slaughtering poultry, and also eliminating damage to the environment and food-borne illnesses.

In 2016 the company raised $230,000 through a crowdfunding campaign on Indiegogo, making this funding the first capital raised by the startup through an equity-based deal.

Off to the Races

A key driver and mission behind companies like Future Meat, SuperMeat, Impossible Foods, and others, as well as for many investors that are making commitments to the plant-based food segment, is the development of foods using modern science and technology that can sustainably meet the needs of an expanding global population with a much smaller environmental footprint than meat from animals.

The deepening of the connection between consumers and their food supply chains, along with a rising popularity of veganism, concerns over animal rights, and awareness around the hormones, antibiotic usage, and unsustainability inherent in the global livestock industry have pushed many people in Western markets to look toward alternative ways to get protein into their diet.

Global protein consumption is expected to climb at a compounded annual growth rate (CAGR) of 1.7 percent, reaching 943 million tons by 2054, according to Lux Research. On a global scale, greenhouse gas emissions generated by the animal agriculture industry in place to meet this demand account for 14.5 percent of all man-made greenhouse gas emissions – more than the worldwide transportation sector.

As these societal, environmental, and consumption trends align, the number of players developing clean meat technologies is growing.

At the beginning of April, GAI News reported that Wild Type, a U.S.-based clean meat company founded by former U.S. diplomat Justin Kolbeck and aspiring cardiologist Arye Elfenbein, successfully raised $3.5 million in funding led by Spark Capital, with participation from Root Ventures, Mission Bay Capital, and a group of angel investors.

And one month later, at the beginning of May, Israel’s Aleph Farms Ltd. announced two key breakthroughs that will advance the production of clean meat. The first is the expansion of the composition of the types of cells being used to create lab-produced meat including vascular and connective tissues, and the second is a 3D technology that can compose meat on a  three dimensional platform which enables their products to more closely mimic traditional cuts of meat.

“Consumers – especially millennials and flexitarians – care about animal welfare and the environment,” explains Didier Toubia, co-founder and CEO of Aleph Farms. “At the same time, they want to eat juicy, indulgent steak – not just ‘protein.’ Our goal is to help these consumers adhere to their personal standards, while getting to enjoy safe, sustainable meat.”

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.