You only have to look as far as the menus at Burger King or Carl’s Jr. to realize that plant-based meat is no longer a phenomenon, but practically a given. Both restaurants offer Impossible Foods’ fake meat, a Redwood City, California-based startup that offers plant-based burgers and sausage (and has landed $687.5 million in known venture capital funding to date).
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Yet, alongside the rise of companies like Impossible Foods, the public debut of companies like Beyond Meat, and the formation of funds like PowerPlant Ventures, exists a quieter subset of alternative protein. Startups around the world, from Israel to San Francisco to Memphis, are finding promise in alternative protein drawn from animal cells instead of plants.
Before we get into those cell-based meat startups, let’s do some housekeeping. Seth Bannon, an investor at Fifty Years VC, a seed fund “that backs entrepreneurs solving the world’s biggest problems with technology” warns against using phrases like fake-meat or lab-grown meat.
“‘Fake meat’ isn’t accurate because the end product is essentially identical to meat harvested from a slaughtered animal. It’s made through the exact same biological processes that take place inside an animal that cause that animal to make meat, only those processes are outside the animal,” Bannon told Crunchbase News.
And in response to lab-grown meat, he said, “While it’s true that cell-based meat was initially developed in a food lab, it’s not made at scale in a lab, but rather in large cultivators that look a lot like beer breweries. Cheerios was also initially developed in a food lab, but we don’t call it ‘lab-made cereal’.”
That said, for clarity’s sake, let’s stick with cell-based meat when discussing this alternative protein source.
A Systemic Shift
“The biggest mistake investors make is viewing the movement toward alternative protein sources as a fad versus a systemic shift that’s here to stay,” Bannon told Crunchbase News.
Bannon is an investor in Memphis Meats, which offers cell-based meat and raised a $161 million Series B round in January. Back when Memphis Meats only had $20 million under its belt, our own Joanna Glasner described it as a “pricey meatball maker.”
Memphis Meats’ nine-figure Series B round was a nod to how much promise a slew of venture capitalists think the cell-based meat company has. It’s worth noting that Tyson Ventures, the VC arm of the largest U.S. meat producer, has invested in the company, which despite its name is based in San Francisco. Other investors include SoftBank Group, Norwest Venture Parnters and Temasek Holdings, as well as high-net-worth individuals like Bill Gates and Richard Branson.
Memphis Meats is also part of an alliance with other competitors, startups, in the cell-based meat space, such as the Alliance for Meat, Poultry & Seafood (AMPS) Innovation. The alliance additionally includes BlueNalu, Finless Foods, Forke & Goode and JUST Inc.
Andrew Noyes, head of communications at JUST, helped kickstart the alliance. He said the “informal coalition” wants to have a “unified voice for just explaining this technology … this new field, to folks who are interested in learning more about it in Washington.”
“To take the step and form AMPS Innovation in advance of having a product on the market is actually a fairly new phenomenon, when you think of other groups in Washington, D.C.,” he said. “There is no [cell-based meat] product on the market yet, but we felt it was important to get ahead of it.”
While JUST lobbies in D.C. for its future cell-based meat product, it already has its original roots in a shelf-friendly product. The San Francisco startup just celebrated its one year anniversary of selling a plant-based egg substitute. The product is based on the mung bean, which when cooked scrambles just like an egg.
What Came First? The Cell Or The Plant
JUST started out with reinventing the egg because it’s the most abundant source of animal protein, Tetrick said. Thanks to deals with large grocers like Kroger, JUST has sold the equivalent of 25 million chicken eggs in its first full year on the market.
Before JUST Egg was released, however, Tetrick was brainstorming what to do next. And he landed on cell-based meat. Tertick thinks a cell-based meat will be the future of menus, which brings me to his Waffle House dream.
He imagines “the only meat that will be on the menu is one that doesn’t come from killing animals … all the meat, all the chicken, all the beef.”
“A plant-based approach is really solid for optionality, but how do you create a situation where you’re not just adding an item to a menu?” he said, adding that it starts with quality and culture.
One of the struggles with cell-based meat, Tetrick said, is the massive capital lift to get a product to market. He claims it takes over a billion dollars to bring a cell-based product to market. Tetrick thinks high cost is enough of a barrier to stop companies from trying to opt for the cell-based meat approach (and might be a reason why we see more plant-based companies in the first place). In the future, he imagines the profits from the Egg will fuel the cell-based meat alternative, from a financial perspective.
At least for now, Tetrick has been able to convince investors to bet big. The startup, which is not yet profitable, has raised over $200 million in known venture capital from investors like Khosla Ventures, Horizons Ventures and Salesforce’s Marc Benioff.
“Plants are good for some things and cells are good for some things,” Tetrick told Crunchbase News. “And that’s what we do.”
He added: “I’m not a botanist, I was not fixed on any approach; a plant is the best approach [as is a] cell for a number of different reasons.”
Illustration: Li-Anne Dias