Financial investments in the cultured meat sector. Hype or real opportunity?

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With widespread disruptions of the traditional supply chain of meat and the emergence of new technologies as well as an increasing sentiment toward animal welfare, cultured meat is emerging as a viable investment option in the future of protein.

Cultured meat (in-vitro meat, lab-meat, clean meat) is developed in bioreactors, taking just a few cells (biopsy) from a living animal and multiplying them under sterile conditions in order to obtain the final product – minced meat, filet, steak, etc. Pioneered by the Dutch university professor Mark Post in 2013, the idea soon speeded all over the word. Currently, there are research centers and companies active in this field on every continent, each competing for market share and trying to come up with a scalable product. 

Mathematical models and financial analysts predict that the cultured meat market has the potential to grow by US$200.21 million during 2020-2024[1], reaching US$593 million by 2032[2]. Futurists dare to push the envelope and predict the total collapse of the cattle industry by 2030[3].  

More conservative opinions predict that these trends will coexist for a while. As soon as cultured meat is produced on a larger scale, at a lower cost, and with improved nutritional content, traditional meat might become an exclusive and exquisite treat in high-end restaurants. 

Cultured meat, an attractive investment 

Investor interest has been rising dramatically over the last four years, ranging from investments of less than US$20 million in 2016 to over US$160 million in 2020[4]. The US is the country with the highest investments, mainly due to Memphis Meat’s most recent fundraising, which surpassed US$160 million. Despite its small size, Israel has managed to secure over US$37 million in investments. 

Most of the investments are in an early financing stage (seed phase), raising funds of up to  US$2 million and aiming to cover their research and product development expenses.  

Only six companies among those that chose to disclose their financial status are in the Series A funding rounds, securing up to US$10-15 million in exchange for equity, while only one company works towards a scalable business trying to market their products on a larger scale through Series B financing (average estimated capital raised of US$32 million). 

Funds raised by cultured meat companies between 2016 and 2020[4]  

…In conclusion 

Some cultured meat start-ups are financially supported by established companies, usually in a similar or tangential industry. For example, in its Series B funding round, Memphis Meat raised money both from venture capital companies, public persons (Richard Branson, Bill Gates, Kimbal Musk), but also from the food giant Cargill. Investing in cultured meat might prove useful for traditional meat producers as a back-up solution for situations such as the current COVID pandemic. 

As every emerging niche, cultured meat has both high potential as well as drawbacks. The current development phase of the industry is still relatively far away from the promised benefits. Problems such as consumer perception, scalability, energy consumption, taste, and appearance still need to be addressed. 

The Supertrends dynamic report on cultured meat addresses in greater depth the current financial landscape and future opportunities that cultured meat presents as an investment. For more information on the report, click here.

Reference

[1] TechNavio. 2019. Cultured Meat Market by Product and Geography – Forecast and Analysis 2020-2024. Market Report, Toronto: Infiniti Research Limited.

[2] Markets and Markets. 2019. Cultured Meat Market by Source, End-User and Region – Global Forecast to 2032. Market Report, Hadapsar, India: MarketsandMarkets Research

[3] Tubb, Catherine, and Tony Seba. 2019. Rethinking Food and Agriculture 2020-2030. RetinkX.

[4] Swartz, Eliot. 2019. A Bit of Science. May 31. Accessed May 11, 2020. http://elliotswartz.com/.

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