A faux meat alternative food startup has successfully raised funding—with both Bill Gates and Richard Branson making a major contribution. Memphis Meats has raised $17 million in Series A funding which increases their total funds raised to $22 million. The San Francisco-based company grows meat in tanks by feeding nutrients like oxygen and sugar to living animal cells—a bold action involving several upscale investors and unconventional yet safe scientific methods. The round of participants in funding was a mixed lot and included Richard Branson, Bill Gates, Cargill, KBW Ventures, Inevitable Ventures, Suzy Welch, Kyle Vogt, Kimbal Musk and many others. Besides venture capital firms, there were also some research institutions joining in the funding frenzy to invest in Memphis Meats. The lead investing group is DFJ.
A Bold Move to Invest in Memphis Meats
As a food company, the participation of Cargill is considered a bold move and a significant achievement for Memphis Meats. Cargill is a food company that is represented in over 70 countries with more than 150,000 employees. They produce and refine edible oils, grow seeds, and produce a wide range of agricultural needs including food and feeds. As a food company, Cargill is also concerned about the future of meat. By 2050, there will be 9 billion people on the planet, creating intense pressures in producing enough meat for such a large population that is safe for consumption.
Given concerns of consumers over the health of meat and the almost certain pressures on cost, Cargill is participating in the development of fake meat. Fake meat products can provide the needed protein to feed the demands of 9 billion people. There are now a handful of companies trying to develop fake meat—using different approaches.
Investing in the Future of Meats
With its move to invest in Memphis Meats, Cargill is betting that they will have a significant hold on the future faux meat market. Its subsidiary, Cargill Protein, offered a statement that the company is committed to growing its protein business, by investing in innovative technologies to create new proteins. The company’s aim remains to provide a complete basket of consumer goods for its customers.
Memphis Meats uses stem cells to develop meat products. The attempt replicates meat cells without the need for large feedlots or housing for the animals. The cells will be grown in a factory away from the farm. The meats will be grown in tanks with nutrients feeding the tanks in which the protein grows. Although they have not produced a commercial product, they have proven the concept and been able to produce tank-grown beef and chicken, and duck from stem cells.
In the long run, the factory and tank process of cell growth will only use 1 percent of the land and only 10 percent of the water required to grow conventional meat animals. In a world of scarce resources, these numbers could mean the difference between adequate supply at an affordable price or dwindling supply at exorbitant prices.
The capital raised by Memphis Meats will be used to further develop the product and scale up while also lowering the cost of production. The act of growing meats from cells is harder than producing them in farms and feedlots. Without a doubt, new techniques have to be developed to lower the cost of production, as well as streamline the growth process.
Looking at a World Full of Faux Meats
It is interesting to note that Impossible Foods is using a soy-based formula to create a plant-based protein which tastes like real meat. The product even has juices oozing out of the burger patties. One of the big-name investors into Impossible Foods is Bill Gates who—as mentioned earlier—has also chosen to invest in Memphis Meats.
While the significant increase in Memphis Meats funding is intended mainly for product development and scaling, the increased financial support also provides funds for needed staffing. The main challenge left in commercialization is production cost, which the company has already stated they will allocate funds to as well.
Clearly, with the funding interest in faux meats like Impossible Foods, and lab-grown meat like Memphis Meats, food consumption will change dramatically in the coming years. Investors are feeling their way forward to see which companies and technologies will have bold impacts in the market place.