Memphis Meats, the company growing meat from animal cells, just got a huge cash injection as it looks to upset an industry which is already evolving fast.
The California-based startup, which has been working on its lab-grown meat offering for five years already, secured $161 million in an investment round led by SoftBank Group, Norwest and Temasek, and includes Bill Gates, Richard Branson and meat companies Tyson and Cargill.
Cell-based meats have a low impact on the environment compared to regular meat. The meat industry is one of the major contributors to the climate problem being described as the sixth mass extinction. Tech companies have leapt to the challenge of finding ways to either replace meat or discover less energy-intensive methods of production.
Beyond Meat and Impossible Foods have produced plant-based meat alternatives which mimic the taste of meat and provide protein. Beyond Meat went public in 2019 and enjoyed a first-day gain of 163 percent. The company priced its IPO at $25 per share and started trading at $46, before ending the day at $65.75. The stock continued to rise rapidly before falling at the end of the year, but recently enjoyed another bounce and stands at around $120 at a market capitalization of $7.4 billion at the time of publication.
Impossible Foods is still a private company, and was valued at around $2 billion in its last fundraising round, in May last year. The company is currently reportedly looking to secure another investment round that would see its valuation at least double.
Memphis Meats is looking to tap into a similar customer base as those two companies – consumers who want to lower or eliminate their meat consumption due to environmental or health concerns. But the synthetic meat offering is quite different. For a start, it’s actually meat. It’s also a lot more expensive to produce. In 2018, a report by Wired found that a pound of Memphis Meats costs $2,400 to make. The founder of the company has said the cost is decreasing rapidly, but even so, it may still be a while before the company’s products can be sold at a realistic price for consumers.
There are also regulatory hurdles on the horizon. At the end of 2018 ur was announced that both the U.S. Department of Agriculture and the U.S. Food and Drug Administration would share regulatory oversight of the nascent industry, but there are still decisions to be made on how to label, regulate and inspect synthetic meat.
With this latest cash injection, Memphis Meats intends to open a factory where it can produce prototypes to offer to customers and gauge interest. The plant will take around 18 months to two years to get started, the CEO of Memphis Meats Uma Valeti told CNN News.