October 10, 2019

By Lynda Kiernan

Chicago-based VC investor S2G and Swiss VC firm Emerald Technology Ventures have led a $14 million Series A, the second largest funding round in the cultured meat category to date, in Israel-based Future Meat Technologies.

This round follows upon Future Meat raising $2.2 million in Seed funding in May 2018 from 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.

Also participating in the round were China’s first food and agtech VC investor Bits x Bites; Henry Soesanto, CEO of Monde Nissin, a leading producer of meat alternatives; and UK-based VC firm Manta Ray Ventures.

Founded in 2018, Future Meat is pioneering the cost-effective production of meat directly from animal cells, without the need to raise or slaughter livestock. The startup’s cutting-edge process begins with rapidly growing fibroblasts – or connective tissue cells – and bringing them to a high density before differentiating the cells into cultured muscle and healthy fats.

This highly sustainable production model uses 99 percent less land than traditional meat production, and generates 80 percent less greenhouse gas emissions. 

“I personally want to make sure my children and grandchildren will be able to enjoy the same meat dishes that I grew up with,” said  Prof. Yaakov Nahmias, founder and chief scientist, Future Meat.

“The worldwide demand for protein is growing exponentially, and the only way to meet this demand is by fundamentally reinventing animal agriculture. Future Meat Technologies created a cost-effective solution for cultured meat manufacturing that is scalable and sustainable by design.”

Plans in Future Meat’s pipeline include the introduction of hybrid products that combine plant proteins for texture with cultured fats that result in products with the smell and taste of meat. However, the startup isn’t just developing new products, it is also aiming to commercialize them at scale.

At current volumes, production costs range from $150 per pound for chicken and $200 per pound for beef. But with the funding from this round, Future Meat will be expanding its R&D efforts, and plans to bring its technology from the lab to the factory with the construction of  the world’s first cultured meat pilot production facility outside of Tel Aviv, with expectations for operations to begin in 2020.

“Future Meat Technologies’ innovative approach offers a differentiated and exciting path forward in the development of cultured meat,” said Matthew Walker, managing director, S2G Ventures. “The Future Meat team has developed a technology platform and roadmap that offers the cleanest and most efficient means of cell-based meat production, both in terms of capital expenditure and cost per pound, that we’ve seen to date.”

The growing size of the funding rounds, the profile of the investors committing capital, and the increasing number of startups in the cultured meat category are all indicative of the validity of the technology and nascent potential for the industry.

Aleph Farms, another Israel-based cellular meat startup using a unique 3D, non-GMO tissue engineering technology to build meat, announced a $12 million Series A in May of this year led by VisVires New Protein, and backed by Cargill, M-Industry, the industrial group of Migros, Switzerland, and existing investors Strauss Group, Peregrine Ventures, CPT Capital, Jesselson Investments, New Crop Capital, and Technion Investment Opportunity Fund.

Aleph is also the first cellular meat startup to bring its technology to space, announcing on October 7 that it had successfully collaborated with two U.S. food companies and Russia’s 3-D Bioprinting Solutions to be the first to produce lab-grown meat aboard the International Space Station. 

Probably the most familiar name in cellular meat production is Memphis Meats, which in January 2018 announced high-profile funding from Tyson Ventures, the $150 million venture arm of U.S. meat processor Tyson Foods, who through its backing joined the ranks of Cargill, Bill Gates, and Richard Branson. 

However, competition is quickly gathering. Israel’s SuperMeat raised $4 million by May 2018, and in June of the same year, Integriculture Inc. secured ¥300 million (US$2.7 million) in seed financing led by Japanese seed and early stage-focused venture fund Real Tech Capital, who was joined by Beyond Next Ventures; A-FIVE (Agriculture, Forestry and Fisheries Fund Corporation for Innovation, Value-chain and Expansion Japan – a Japanese government fund); MTG Co., Ltd.; euglena Co., Ltd. Dr. Hiroaki Kitano (CEO of Sony Computer Science Laboratories, Inc.).

Only months later, Dutch cell-based meat startup Meatable announced in October it had closed on $3.5 million led by BlueYard Capital, with participation from Atlantic Food Labs, Future Positive Capital, Backed VC, and angel investors including Charles Songhurst and Jörg Mohaupt. And much more recently, in September of this year, CPT Capital led a $6 million Seed round for Redefine Meat, another Israeli startup developing 3-D meat printer technology. 

Cellular seafood production is also lifting off the ground with Singapore-based Shiok Meats, which announced a $4.6 million Seed round also backed by Henry Siesanto, with Y Combinator, and Big Idea Ventures, a new venture capital fund backed by Tyson that focuses on meat alternatives. And Wild Type, a cultured aquaculture startup founded by former U.S. diplomat Justin Kolbeck and aspiring cardiologist Arye Elfenbein that raised $3.5 million in April 2018 from Spark Capital, with participation from Root Ventures, Mission Bay Capital, and a group of angel investors.

– 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.