What Does VC Think About Lab-Grown Meat?
By Konnie Lin, Michigan PEVC Analyst
Lab-grown meat has become a hot technological trend. With the potential to revolutionize the global meat industry and reduce the negative ethical and environmental consequences resulting from meat consumption, lab-grown meat is certainly a disruptive and impactful development. It’s also attracted the attention of VC funding.
Last year, U.S.-based Memphis Meats raised $17M in a Series A funding round, and Netherlands-based Mosa Meat raised $8.8M. Israeli Future Meat Technologies raised $2.2M in seed funding as well; besides, it is also part of a $300M deal from China, which seeks to import lab-grown meat.
Venture capital financers in the lab-grown meat space include Tyson New Ventures, Tyson Foods’ venture arm. Companies like Tyson, the world’s second-largest chicken, beef and pork processor, are seeking to venture into environmentally-friendly options, whether that be lab-grown or imitation meat. Financers also include New Crop Capital, an early-stage fund for cultured and plant-based meat startups.
Despite an interest in lab-grown meat, there remain various challenges for its commercial adoption. It is not expected to be widely available for at least 5 years. Part of the reason is that startups are still working on cost reduction. When the first lab-grown burger was produced in 2013 in the Netherlands, it was at a cost of $325,000. However, Israel’s Future Meat Technologies expects to produce lab-grown beef at $2-$4 a pound by 2020.
There are also uncertainties about market adoption for lab-grown meat. A 2018 UK survey found 40% of respondents unwilling to eat lab-grown meat and only 20% willing to do so, with the rest being unsure. Taste is an issue — differences in texture and flavor have been reported between lab-grown and real meat. Furthermore, there is a tendency to see lab-grown meat as unnatural and therefore undesirable.
Additionally, lab-grown meat can have a negative environmental impact despite its role to mitigate damage from meat consumption. For one, facilities needed for its production require large amounts of heating, electricity and other resources.
Moving forward, lab-grown meat startups seeking venture capital funding may see themselves in a competitive relationship with startups pursuing other forms of eco-friendly meat options, whether that be plant-based simulated meat or insect protein. Lab-grown meat startups will need to perfect their efficiency and product quality to attract investors and persuade them — and consumers as well — that their products exceed alternative options.
Although producing clean meat and meat alternatives are trying tasks, growing interest in these new markets and widespread realization of the environmental harms of real meat consumption means we can expect to see sustained interest from venture capitalists in this industry and forward growth.
Sources:
https://www.cbinsights.com/research/future-of-meat-industrial-farming/
