California-based New Age Meats raises $2M in seed funding12 Aug 2020
Cultivated meat company, New Age Meats announced that it raised $2 million in a seed extension round led by the investment firm TechU Ventures. With this supplemental money, the company plans to further expand its R&D, invest in further automation and continue to reduce the cost of its first sausage product.
The company previously closed at $2.7 million seed funding round in January that was led by ff Venture Capital; the venture firm also participated in the extension round along with previous financial backer Sand Hill Angels.
“The mission of our company is to make safer meat without slaughter, but we will never be successful unless our products are delicious. With an expanded food science department we are able to deliver on that promise,” said Brian Spears, New Age Meats CEO in a statement.
Founded in 2018, this cultivated meat company is working toward bringing a cultivated pork sausage product to market. However, cultivated meat has proven to be a slower growing segment of the alternative meat market. A poll from Charleston|Orwig, a Wisconsin-based marketing and communications firm found that four in 10 consumers think that lab-grown food is “scary.” Other studies have found that the name associated with this cell-grown meat affects how consumers perceive the desirability of these products. Only 27% of adults would try “clean meat” while 66% would sample “lab-grown protein,” according to a study from Kadence International.
Nevertheless, investors are confident in the future of these products. In 2018, investors poured $50 million into cell-based meat companies, according to data from the Good Food Institute. Not only has money been flowing in the direction of these lab-grown meat companies, but firms like Memphis Meats have gotten support from animal-protein titans Tyson Foods and Cargill. Still, the segment pales in comparison to the overall meat alternative space, which includes plant-based options. Between 2017 and 2018, the Good Food Institute recorded $13 billion of investment in this space.
Companies like New Age Meats need to not only convince consumers that cultured meat is the future of protein, but they are going to have to bring these products down to price parity with other options. While costs have improved – the first cultured hamburger patty produced by Mosa Meat in 2013 cost $278,000 – they are still high. Food Business News reported that Eat Just, Inc. produces nuggets that cost about $50 each.
While New Age Meats did not suggest a goal at which it is hoping to sell its lab-grown sausages, it will take a lot of scale to reach a price that is attractive to customers. Not to mention the millions in investment that will be required in order to educate consumers about the existence of such alternatives and the benefits of incorporating them into their diets. Only 17% of consumers were familiar with the concept of lab-grown meat according to the study from Kadence International.
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