Venture capital firms are still pouring money into startups making new kinds of meat replacements for consumers.
Whether it’s the one-for-one replacement promised by companies trying to make whole cuts of meat from tissue samples, or the new protein sources from plants and fungi that promise all of the flavor of meat without the animal, the money’s still in new meat businesses.
That’s born out in recent funding rounds for the cell-ag steak maker Aleph Farms, which announced a $105 million whopper of an investment round recently. And in a new $50 million investment for Meati, which uses mycelium for the meat replacement that it’s pitching to consumers.
The Israeli-based Aleph Farms has been making headlines for the better part of two years with stunts like growing meat on the International Space Station, but now the company has real dollars behind its efforts to make a lab grown, whole cut steak.
Funding those efforts are a slew of some of the biggest names in consumer private equity and global finance — including L Catterton, the largest global consumer-focused private equity firm, and DisruptAD, one of the largest venture platforms in the Middle East.
Hoping to bring its first products on the market by 2022, the investment is significant for its Abu Dhabi and Israeli cross-border investment and the involvement of L Catterton’s consumer-focused investment firm, whose US restaurant holdings include Bar Taco, Barcelona Wine Bar, Founders Table, Hopdoddy, Noodles & Co., Primanti Bros., Velvet Taco, and Uncle Julio’s.
“With cultivated whole-muscle cut steaks, an optimized platform for cost parity at scale, and a global partnership network with the world’s largest meat producers, Aleph Farms has differentiated itself as the leading cultivated meat company poised to go to market,” said Michael Farello, a Managing Partner at L Catterton’s Growth Fund. “We are excited to support their success as they prepare for global launch, and we look forward to leveraging our significant expertise in food and sustainable businesses that meet the needs of a changing consumer and a changing world.”
Farello is referring to an agreement between Aleph Farms and BRF, the Brazilian company that’s one of the largest meat producers in the world. In March, the two companies signed an agreement to work together on bringing lab-grown meat to Brazil.
For a partner, it’s hard to do better than BRF. With $7.25 billion in revenue, the Aleph partnership is a piece of the company’s $28 million commitment to projects that reduce its environmental impact.
“BRF is ready and charged to play a leading role in this food revolution and be an active participant in one the greatest industry transformations of this generation,” said BRF chief executive Lorival Luz, in a statement. “Since 2014, we have witnessed an increasing global demand for new sources of protein driven by several factors, namely environmental concerns, new diets and lifestyles, which has spurred the growth of new dietary genres including flexitarianism, vegetarianism and more.”
Falling into that category of creating a vegetarian protein replacement that can better mimic the taste of meat is the Boulder, Colo.-based, Meati.
Unlike FootPrint Coalition portfolio company, Atlast Food, which is starting with a bacon substitute as its first foray into the market, Meati’s targeting whole cuts of meat.
The company already has chicken strips and steak replacements on the menu and now, with its $50 million in new funding led by Acre Venture Partners and BOND Capital it’s looking to build out a full scale production facility to make hundreds of pounds of meat replacement.
What really excites Meati co-founder and chief executive Tyler Huggins is the nutritional value of Meati’s mycelial meat substitute.
Two ounces of Meati’s product can give a consumer half of the daily protein and fiber they need, according to current nutritional guidelines. “There really is nothing that can compare to this product in terms of nutritional value,” Huggins said in an interview earlier this year.
Huggins doesn’t think that the mycelial product will be a one-for-one replacement for the kinds of cuts of meat he was exposed to growing up on a bison ranch in the heart of cattle country, but he does think that it can be swapped in for steak strips and chicken chunks in burritos or other prepared foods.
“A ribeye is pretty damn good… so do we really want to tackle the champ?” Huggins said.
Wherever Meati shows up on menus, it’ll be thanks to the founders impressive roster of co-investors who’re composed of several food industry heavyweights.
They include (as Forbes reported previously) Patagonia CEO Rose Marcario; the former CEO of Annie’s Organic John Foraker; the former CEO of Whole Foods Market, Walter Robb, Sweetgreen co-founders Nicolas Jammet and Jonathan Neman; former White House senior policy advisor for nutrition and a partner at Acre, Sam Kass; and co-owner of Blue Hill Restaurants and founder of Almanac Investments David Barber.
“The more and more I think through how I want to make an impact and make it a category in food. I want to make sure that people think this is an every day protein… we’ll get out there in some fun and creative ways,” Huggins said.
Meati’s co-founders didn’t intend to go into the meat replacement business initially. At first, the two phD students, Huggins and his co-founder Justin Whiteley were working on using mycelium as an electrode for lithium ion batteries. They even got some grant money for the product.
“Both of us were dedicated to create a more sustainable system,” Huggins said. “Using these biological templates to make materials for the battery was our first objective. As we developed that process out, we were trying to tweak the chemical composition of the mycelium to make a better battery. What we found was that we were making something nutritious and edible.”
The meat replacement market is scorching hot right now, but that’s because the demand for a more climate friendly approach to supplying protein for a growing global population is increasingly urgent.
Meat and dairy specifically accounts for around 14.5% of global greenhouse gas emissions, according to the UN’s Food and Agricultural Organization, as this Carbon Brief report shows.
And the number of meat eaters in the world continues to rise. Global emissions from food production are expected to rise 60% by 2050, thanks to projections of increased livestock production, as MIT Technology Review reported.
Ultimately, the world needs all of these solutions which is one reason why investors are willing to spend hundreds of millions to bite off a piece of this meaty meaty market.