First came plant-based meat. Now there is cultured meat. Grown from animal cells in vats, it claims to deliver real meat but without the environmental impact of livestock farming and none of the slaughter.
Not surprisingly, levels of investment and M&A in the burgeoning space has mushroomed, reaching 12 transactions worth a record USD 1.033bn worldwide in 2021, according to Dealogic. Of that, USD 844m went into North American-based companies. This year is on pace to exceed that, with six transactions totaling USD 641m worldwide, of which USD 500m involved US-based companies.
The largest investment was a USD 400m Series C in Upside Foods, previously known as Memphis Meats, in April. Led by Singapore’s Temasek and Abu Dhabi Growth Fund, the financing valued the startup at more than USD 1bn.
Feed the world
Meat giants – such as the US’s Cargill and Tyson Foods [NYSE:TSN], and Brazil’s JBS [B3: JBSS3] – have all invested in cultured or cultivated meat.
Not only does the category align with environmental, social and governance (ESG) investing, it also fits into the United Nations’ Sustainable Development Goals, which calls for zero world hunger while preserving the planet’s resources. Lab-grown meat expels 93% less air pollution and uses 78% less water and 95% less land than regular cattle or poultry.
Countries – especially small ones like Singapore, Israel and the Netherlands – also like it because it provides greater food security for their populace. Singapore is currently the only country that allows its sale. San Francisco-based Eat Just received approval to sell its lab-grown chicken nuggets there at the end of 2020 and the startup is now building a large facility on the island city-state. Eat Just’s cultivated meat division, Good Meat, has raised USD 267m.
Plans by others to build such plants – usually a bioreactor that grows liters of animal fat from harvested animal cells that can then be combined with other proteins to create ground meat – are in the works around the world, including the US.
Meat up
Besides Upside Foods and Eat Just, other developers of slaughter-free meat in the US include San Diego-based BlueNalu and San Francisco-based Wildtype, two startups focused on cultivating seafood from fish cells. Wildtype raised a USD 100m Series B from food-focused private equity group L Catterton and others earlier this year.
Other cultured meat companies exist in the Netherlands and Israel. They include Mosa Meat and Meatable in the Netherlands. Aleph Farms, in which Cargill is an investor, SuperMeat, Future Meat Technologies and MeaTech 3D [NASDAQ:MITC] are all based in Israel.
Consolidation – or at the very least, collaboration – among all those companies is expected as they look to pool their expertise, says Arik Kaufman, CEO and cofounder of MeaTech. Initially, his company was focused on growing bovine cells in a bioreactor and then printing steaks. In late 2020, MeaTech acquired Belgium’s Peace of Meat to give it capabilities in cultured chicken fat biomass, says Kaufman. That kind of transaction – in which companies team up with their different capabilities – should increase, he predicts.
In their ode to veganism, the 1980s English rock band, The Smiths, sang "Meat is Murder". Not anymore
