This week, the Good Meals Institute launched its quarterly alt-protein funding replace, so I assumed it’d be time to examine in and see which manner issues are trending.
At this level it’s well-known that the alt-protein funding local weather has had a pair robust years, and the most recent numbers present issues stay robust.
In line with knowledge shared by GFI, various protein firms raised $233 million in Q3 2024—a 37% lower from Q2, however a 25% improve year-over-year. The drop from Q2 is notable, exceeding the 20% decline throughout the broader enterprise capital market. Nonetheless, the 25% year-over-year development in Q3 is a possible shiny spot and will point out that the second half of 2023 marked the low level for the general market.
Supply: GFI
GFI additionally broke issues down by sub-sector, and it’s clear that fermentation applied sciences are the place buyers are putting their bets:
- Plant-based proteins raised $56 million in Q3, bringing the year-to-date whole to $194 million.
- Fermentation applied sciences, which noticed the most important share of funding, raised $174 million in Q3, with $572 million invested year-to-date.
- Cultivated meat and seafood firms raised $3 million in Q3, reaching $133 million year-to-date.
It’s vital to notice that the general alt-protein funding numbers could be closely influenced by a couple of giant offers. For instance, Q2 2024 noticed $118 million invested within the cultivated meat sector, largely pushed by a $55 million Collection B funding in Prolific Machines, a cultivated meat infrastructure firm, and a $42 million funding in Dutch cultivated meat pioneer Mosa Meat. These bigger offers led to a median deal measurement of $10 million for cultivated meat in Q2, in comparison with a paltry $396,000 in Q3 2024.
Equally, Q3’s fermentation funding numbers had been considerably impacted by two main offers: a $61 million funding in fermentation startup Formo for its Koji cheese merchandise and a $45 million Collection B for precision fermentation startup Helaina, centered on its human lactoferrin product.
GFI notes that decrease rates of interest transferring ahead may present a lift to the alt-protein house, however cautions that the price of capital stays comparatively excessive. They proceed to advocate for alt-protein startups to discover non-traditional funding sources, resembling government-backed loans and packages.
Trying forward, I predict that fermentation-based startups will stay probably the most engaging space for buyers within the coming yr. Funding in cultivated meat startups will doubtless deal with infrastructure gamers with game-changing expertise, like Prolific Machines. In the meantime, many cultivated meat startups that raised vital rounds prior to now few years to scale manufacturing have put these plans on maintain as they work to increase their funding runways throughout this ongoing VC winter.
In line with GFI, the alt-protein house has seen a cumulative $16.3 billion invested since 2015, an honest quantity general however nonetheless comparatively small in comparison with different sustainability focused-sectors. To provide you an concept of simply how small the house is in comparison with different sectors, the photo voltaic trade raised $6.9 billion in enterprise capital in 2023 alone, and that quantity jumps to $34.3 billion when factoring in company funding.
One factor that the house wants to draw greater {dollars} is a extra engaging exit outlook. Total, the exits in alt-protein has been disappointing, as have the outcomes of these firms which have gone public. Till we see an enormous investor success story on this house, the {dollars} could stay comparatively small in comparison with different markets.
