Cellular agriculture involves the production of animal products, such as meat, milk, and leather, using cell culture technology rather than traditional animal agriculture. This approach has the potential to address many of the problems associated with animal agriculture, including environmental impact, animal welfare, and public health concerns.
But the challenges of scaling up production and reducing manufacturing costs are significant. And there is still uncertainty around public perception and regulatory treatments of these products. However, the fundamental challenges are engineering problems, not scientific ones, which gives us confidence that solutions can be found.
Many companies are emerging in this space, falling into five different buckets: cultured meat, cultured dairy, cultured leather and other materials, cultured animal and pet feed, and high-value products. Some of the highest-profile companies in this space include Memphis Meats and Hampton Creek, both of which have raised significant funding.
But it’s not just startups that are investing in cellular agriculture. Major players in the traditional animal agriculture industry, such as Cargill and Tyson, are recognizing the competitive threat and getting involved.
So why should you tune in to the deep dive webinar on cellular agriculture? For one, it will provide valuable insights into the latest trends and developments in this space. You’ll learn about the different buckets of companies emerging, as well as the enabling technologies and food ingredient plays to consider.
But perhaps most importantly, you’ll gain an understanding of the potential impact that cellular agriculture could have on our food system and the world as a whole. Cellular agriculture offers a promising path forward as our society becomes increasingly concerned with sustainability, animal welfare, and public health.
So join us for the deep dive webinar on cellular agriculture and discover the companies and technologies leading the way in this exciting and disruptive field.
Years before, they made their way into the popular lexicon. One such macro trend is cellular agriculture. Cellular agriculture is a nascent technology that allows meat and other agricultural products to be cultured from cells in a bioreactor rather than harvested it from livestock on a farm.
It is an essential and perhaps revolutionary technology that presents opportunities to improve animal welfare and enhance human health.
Decrease the environmental footprint of meat production for this reason and many others, which we will cover in today’s webinar.
Solar agriculture is of increasing interest to Iselect.
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And with that, I’m pleased to bring you this week’s deep dive on cellular agriculture.
Let’s share screens and get it going.
Let’s kick things off. Thanks, everyone, for joining.
Again, today’s discussion around cellular agriculture will will prove, I think, to be to be interesting, certainly to you all as it as it is for us here at the firm.
Before we get kicked off in earnest, just a quick, quick summary of the proceedings We’re gonna start off with some key definitions and relevant background.
Understand that not everyone is is on the same page. Get everyone on the same page.
Gonna quickly summarize our findings. I’m gonna jump into the market, kind of provide an overview of the space, leading companies, startups, investors, and other relevant experts who look at some recent and precedent, precedented financings and exits. And then finally, we’ll digest our findings, and provide thoughts and and our thesis.
With that, let’s get going.
So let’s quickly touch on some of the key definitions here.
A bioreactor at the heart of any biochemical process, it is used to manufacture a range of useful biological products, its function is to provide a controlled environment to achieve optimal growth. It is the container, the device in which cellular agricultural processes take place.
The best way to think about a bioreactor, if you ever been on on a brewery tour.
Here in Saint Louis, the Nwiser Bush Factory is just down the road.
If you’ve ever been there, you’ve seen these massive large stainless steel vats that they grew beer in.
Today, bioreactors for cellular agriculture processes are not there, but that’s that’s kind of the vision we’ll get to later in the presentation. So just when you think bioreactor, you know, think fermentor.
Think stainless steel device in which you know, beer can be brewed, but in this case, it’s it’s meat that’s being grown.
Certainly not yet to industrial scale.
Smaller scale devices today.
So cellular agriculture, we’ve used the term a few times here.
And I think this graphic does a good job of kind of conveying the idea, the process It’s a it’s an interdisciplinary branch of science at the intersection of medicine and farming. And it it capitalized on break engineering, material sciences, to design new ways of producing existing agricultural products in this particular graphic you’re seeing a a calf who’s had a biopsy taken.
Those cells are then cultured and replicated in a in a bioreactor and then ultimately assembled into a inverter.
Which is convenient next slide to arrive at.
You’ll see you’ll see here pictured is the the first Cultured Burger that was cooked and eaten in a a live press conference in twenty thirteen.
I believe it’s it’s a YouTube video you can you can check out if you so desire.
But but cultured meat I also called clean meat, in vitro meat. These are other terms that have been kicked around.
But it’s it is meat grown in its cell culture. Inside of an animal.
So cultured meat is meat that has been grown through a cellular agricultural process on clean meat production is really a euphemism, if you will, for cellular agriculture.
It’s a process of growing a small cell sample into a a full piece animal meat outside of an animal, circumventing, you know, the pollution, a lot of the kinda negative externalities of the process.
Hold on. We’re having some technical difficulties here.
Thanks, folks. Apologize for the delay. Let’s move on. Now we’ve got some of the key definitions in place.
Let’s get let’s get to some background. I think this quote from Winston Churchill is incredibly prescient nineteen thirty one, fifty years hence We shall escape the absurdity of growing the whole chicken in order to eat the breast or wing by growing these parts separately under a suitable medium.
That was predicted in a in an essay, he wrote about fifty years hence.
Unfortunately, fifty years from nineteen thirty one was nineteen eighty one. Didn’t quite get there yet. But, you know, best estimates, peg, Winston Churchill’s ruminations theories as coming true here in, you know, the next two, three years.
So ninety years hence, maybe is a more realistic prediction. But but nevertheless, hey, this this technology this core technology is is well established, well understood in a biomedical and sort of medical context.
So most insulin today is used widely by diabetics. To regulate blood sugar, and it is manufactured with modified coli bacteria.
In a cellular agricultural process. Similarly, Renant is FDA approved. It’s used in sort of milk and cheese. Well, it’s used to turn milk into curds and whey and cheese making.
And it is it is synthetically produced and has been used for, you know, nearly twenty years at this point, excuse me, thirty years since nineteen ninety.
Culture Meat, I mentioned with some Churchill’s prediction in nineteen thirty one, Some of the early work in this space was started in the 70s, some of the first patents were issued in the the middle eight nineties.
And and I mentioned already that that first cultured burger. Was eaten in twenty thirteen.
It’s estimated cost to produce on a per pound basis, pretty outrageous, one point two million dollars certainly not affordable for for the average consumer.
But quickly, we are we are walking down that cost curve. Memphis meets in twenty seventeen.
Memphis meets is a prominent cultured meet start up, not based in Memphis, but they did they did steal some of that branding. They manufactured a burger for an estimated twenty four hundred dollars a pound and, you know, the the best estimates are pegging kinda twenty to twenty one, twenty twenty to twenty twenty one is the date when we’re going to see a broad rollout to the average consumer.
Best estimates are pegging, you know, the per pound.
It’s sort of like eleven, twelve bucks a pound.
Still a premium price.
Important to note that last summer, Hampton Creek, announced that it intends or plans to begin selling its clean meat in restaurants according to the CEO.
Also important to note that no one believes them. So there’s that.
So this is a nice schematic from Super Meat.
I think it’s it’s helpful in understanding how you go from biopsy to burger or in this case chicken breast.
But that Super Meat is another of the sort of cultured meat startups you know, important to to to note here. It’s it is a a time consuming and sort of labor intensive not inexpensive process.
You’re going from, you know, a a self biopsy of a live chicken, your culturing cells in an incubator, taken from an incubator and put into you know, bioreactors so that they can, you know, replicate and and amass themselves in in what is then known to you and me as as, you know, a chicken breast or a chicken wing.
There are still many hurdles to jump through in this process, which we’ll touch on later in the presentation.
But I think this is helpful. This diagram is helpful when considering, you know, how the how the process plays out.
I just want to note I found this great quote from AgFunder at one of their recent conferences You know, this is not meat that has been grown in a lab with all the negative associations that might arise.
It’s more accurate to see this new way of producing food as a brewery technique. So what I mentioned previously with the analyzer question example, so it’s it’s frucing meat rather than beer.
So I think I think that’s helpful. And to sort of understand the concept and and frame it in that way.
And and for some of the reasons why we might do this, I understand it has kind of a franken meat connotation that we’ve been kicking this idea around in in the office and some of the ethical considerations.
You know, would you eat a a brewed burger I think the majority of us have settled on a, yeah, no problem in the taste and the consistency in the mouth feels, right? In in part because some of what we understand about the negative externalities of cultured or just sort of livestock production, and what cultured meat can do to, you know, make those go away just to a few touch points eighteen percent of global CO2 emissions arise from meat production, now sixteen seventy liters of water wired to produce five hundred grams of beef and, you know, meat consumption has increased five to six percent per year over the last few decades, and dairy dairy consumption has risen by around four percent, largely flat in the developed world seeing the growth is in the developing world particularly in China as the global middle class is coming online. And we’ve touched on these themes before, but there’s a higher value protein mix associated with changes in diet as populations a mass greater wealth.
So considering some of this background and and some of these macro trends, I’ll just quickly summarize our findings.
The market size goes massive according to some estimates, meat, dairy, milk, cheese, a seven hundred billion dollars global opportunity.
Today, you know, the the existing penetration is small, but, you know, estimates peg here in the near term it’s, you know, one percent of meat sales by twenty twenty two is, you know, due to sort of meat substitutes of which culture and meat is but a small sort of sub fraction.
But still when you’ve got a seven hundred billion dollars total opportunity, one percent is not a trivial addressable market.
There are many problems and opportunities, which we’ll touch on, but they really boil down to sort of scalability and manufacturing cost challenges and then some of the uncertainty around public perception and regulatory treatment.
Some of the solutions and trends. I was encouraged and we’ll talk more about this. But to see the collaboration sort of the intentional collaboration between foundations and academia to solve some of these engineering problems.
You know, as I mentioned, the problems are around scalability and and sort of manufacturing costs. They’re really engineering issues, not science issues, which is encouraging for investors like us.
Major players are certainly involved, Tyson, Cargill, have made investments recently. We’ll touch on their involvement later. Memphis Meet We’ve already mentioned them. They’re they’re probably the leader in the the cultured Burger wars, Hampton Creek, is another. They’re projecting go to market in twenty eighteen. No one believes them. And then you’ve got a few on the on the dairy side Clar foods, perfect day.
And then on the materials and sort of fake leather side, if you will, modern meadow and bull threads. We’ll talk about them in a in a moment, leading investors and some relevant experts.
So with that, let’s let’s dive into the overview and get it going. So market side in the scope.
This is a massive global market.
New crop capital, they estimate this is the meat egg and dairy sectors represent a seven hundred billion dollar global market that is ripe for innovation in large scale disruption, From what I’ve seen, there’s a bit of a war going on, but between those that see the opportunities or the futurists and those that see that the long slog toward commercialization call them the realist. I, you know, we see RAVA Bank, you know, they’ve they’ve seen to be more in the futurist camp they see this quote doesn’t quite do it justice.
But, you know, by twenty twenty two, alternative proteins, both in finished products and food ingredients will amount to less one percent of combined meat market size around ninety million tons, But then again, this is in the context of Oracle that in which they said, producers be ready for the coming shift.
Whereas, you know, Cobank is a, you know, US based ag bank.
They they kind of threw cold water on some of those projections, sales of – their point was that sales of beef market with a production clean. So grass fed sustainably produced, etcetera have reached a plateau of about three and a half percent of total retail beef sales. So their perspective was that clean meat is really just another production claim. And so, you know, maybe you’re not fighting for that seven hundred billion dollar global total, but you’re really fighting for a subset of that three and a half percent production claim.
But nevertheless, there’s been, I think everyone agrees that this space is growing quickly that the technologies that are coming online are well understood that the problems before us are engineering and not science based And I think this this particular schematic here is is offered by by CD insights on our meatless future. You know, bit of a clickbait title there, but but it’s helpful in kind of understanding the steps in the supply chain that that clean meat is is replacing. So instead of, you know, breeding, feeding, slaughter, processing, you’re just sampling and culturing, and then slipping right into existing distribution streams.
It’s certainly, you know, a different process yet, you know, not yet today cheap enough. Certainly, we’ll talk a little bit about that in a in a moment.
But given the speed of technology, development promises to be quite disruptive.
Let’s talk about some of the problems we’ve we’ve identified here.
So, you know, according to AgFunder and and some research they’ve done, it estimated cost to bring a cultured meat product to market all in is you know, hundred and fifty million dollars to three seventy million dollars a large a large part of that estimate.
Upwards of two hundred million dollars of it on the high end is in the regulatory and marketing.
And sort of distribution side. So again, the technology is understood, but challenges around consumer perception, angle sort of treatment remain on on stall, uncertain, it’s just never been scaled, you know, that’s an important part of your technology mind, culture meat is well understood. It’s just never been scaled.
But the technology risks are primarily engineering, not science problems.
They really kind of boil down to five five buckets.
Scalability, cost, perception, quality and then regulatory.
On the scalability side, I mentioned this earlier when we were talking about analyzing Bush, fermenters, breweries, for meat kind of thing.
That the specialized and industrial scale bioreactors just aren’t there yet for, you know, industrial scale clean meat production? When you said they’re not there yet, is it mostly about size? Is there still, like, a technological hurdle that has to be come over to you if no need to do anything about that? Yeah.
I mean, so I don’t feel confident enough in the nuances of technology to be able to to pontificate.
Right. But what I can say is is that, you know, the the bioreactors, the fermenters that exist for your analyze or bush and your mailer courses of the world wouldn’t cut it for your your cultured meat facilities.
There are different design criteria that need to be met and different sort of sizes shapes functions that just haven’t been demanded quite frankly.
No one’s gone to a large scale bio reactor manufacturer and said, I need x, y, and z for me.
And so that was the part of the point, right, is that it’s not like the science is mystifying. It’s just that practically speaking, it hasn’t been done yet.
Yeah. And so there there remains some design challenges there. Yeah.
Also, to that end, some of the the scalability front, the supply chain, distribution, and and, like, process automation tools that you know, large scale industrial companies have built just don’t exist. So it’s, you know, we’re really building a whole new supply chain from scratch here.
Which is not trivial.
On the cost side, there are a number of kind of thorny problems.
I think thornier than some of the scalability concerns.
So the scaffolding and structuring not trivial. When you eat a burger, when you eat a steak, you know, there are there’s connective tissue, there’s fat, there’s a certain density you expect, a certain quality, a certain mouthfeel, And scaffolding and structuring are the, you know, ligaments, cartilage, bone, you know, pieces that that make a stake, a stake that we kind of expect from a stake. And we’re not there yet on creating those that scaffolding.
Companies like Geltor can provide some of the answer, but we’re not you know, we haven’t we haven’t yet gotten to a place where we know how to create a stake, you know, a t bone stake, bone in rib eye, something like that.
It will fool you because it’s culture.
Like, we’re just not we haven’t gotten there yet because the scaffolding and the structuring isn’t there. And this is a nuanced point, but — so cheap reusable, non animal cell culture media right now.
When these cells are cultured, they are they are cultured.
They are grown in fetal bovine serum, which is extracted from unborn cats. And if we’re truly going to be, you know, making animal free meat, it’s difficult to do so when you’re using fetal bovine serum which is procured from industrial scale livestock operations in order to produce your quote unquote, livestock free burgers.
And it’s – furthermore, these are expensive. It’s an inexpensive product. It’s pretty unreliable batch to batch.
You can’t reuse it.
Can’t recycle it. So it’s in and it’s it’s authority problem for the industry because how, you know, that’s sort of the earliest culturing is done in this fetal bovine serum.
How do we find a culture — cell culture media that is a little more — a little less ethically challenged, is how we say.
Not not to mention inexpensive and reusable. And then last but not least, this is on the cost side, accessible cell lines.
This is not a scoring problem, but it’s just different cells for different muscle types and tissue types for different animals are not there’s there’s no common bank of chicken ligament cells nor is there a common bank of cow bone cells?
Certainly, you can go out and get it.
But, you know, there’s there’s no there’s no granger for animal cell types, no common catalog that you can readily purchase cell types from today.
Not a hard problem to solve. There really hasn’t been demand for it yet. I’m I’m confident that that this issue will resolve itself.
But we’re not there yet in terms of like an all encompassing cell type bank for, you know, all animal types from cows to rhinos.
Whatever you need. We’re just there’s no library there yet.
On the on the texture topic, it I wonder is on is there something I know that I’ve I heard the beach and steak argument that, you know, it’s a very complex combination of fats and different types of tissues.
Is there, like, a certain degree of which the texture is something that we’re really used to because we none of us had cellular cellular agriculture products.
So when we try to interact with the product, it doesn’t meet what we’re used to. That’s what’s driving it. We’re just something like more inherently like I guess when you think about creating whole new categories of products, I mostly think about this, like, gonna think about with the wine company Abel winery.
Really if you can create, like, a whole new class of products that can’t exist in the national environment. Because that Like, do you do you see that being, like, a pathway where, you know, after a cellular item, we’ve been around for long enough that people don’t even have, like, t bone steak anymore, they’re more just there’s just like there’s only a there’s only creative license to creating new categories of new products. Maybe I’m not sure know how to answer that question fully, but I I’m reminded of, you know, Todd Mockler’s comment, like, what if best strawberry you’ve ever had — Right. — is has been created using CRISPR.
What if the best burger you’ve ever had is cultured.
Point being, we still recognize it as a burger. Sure. I think maybe at some point, the the t bone or, you know, bone in, rib eye — Yeah. — may go the way of the dodo bird. But I think in the near term in order to in order to enable that future — Yeah.
Cultured meat still has to compete on the same playing field in the near term. And I think that touches on another of the concerns.
We’ll just skip the public perception piece and go to the quality. Like, Yeah.
I think that touches on your that that point there, like the nutritional profile, protein content, mouthfeel, taste, like not a trivial hurdle.
I think in order for clean meat to compete with normal meat, you guys it’s got to be the best burger you’ve ever had.
And so you got to knock the quality out of the ballpark.
And not only is the best bird you’ve ever had, but like it is way healthier and it’s going to help your cholesterol and there’s no fat in it. And, like, you can’t see that about any burger you’ve ever had.
I think that’s that’s kind of the challenge for practical challenge for some of these cultured new folks. And then the public perception and I think regulatory kind of go hand in hand, but this like – so I’ve had the impossible burger at plant based, not cultured. I think a number of us have tried that or others.
I went to a, you know, fancy restaurant and had a, you know, expensive meal to do it.
I’ll probably do it again, but I’m not going to buy that impossible burger as my I can replace a burger.
Right? So it’s a novelty. I don’t know if it’s a staple.
How does how do these cultured meat products move beyond the novelty and become staples or just replace outright replacement.
I don’t know.
I think that’s unclear.
Cool. Unclear. And then the, you know, USDA and FDA treatment on, you know, regulation and and labeling is totally unresolved.
No, you know.
They understand, they need to watch it, they’ve, you know, released, press releases mentioning that it’s an area of you know, ongoing development and monitoring it at to the regulation level, regulators level, but you know, we’re nowhere near getting to a regulatory framework that can allow Hampton Creek to roll out market with this stuff by the end of twenty eighteen.
Hence, while I know and believe them is, you know, I mentioned this here, culture meets still ways off question mark.
COBank, the ag U. S.
AgBank, I mentioned, they see it in restaurants, special see in three to five and, you know, broad grocery and five to eight.
And Hampton Creek says otherwise and it’s twenty eighteen.
Don’t believe them.
Most of meats, Memphis meats, and stainless foods.
So they’re sort of the the commonly accepted leaders, they’re all kind of settled on a twenty twenty to twenty twenty. What’s they’re looking?
Are they doing like tune or something? They’re doing I’m not sure what exactly, but it’s fish.
Okay. Fish fillets It’s all new wave. That was, like, shrimp. No.
And new wave plant based. Wow, that’s that’s right. That’s right. So these guys are cultured.
So some of the solutions and trends that I’ve observed, let’s just first kind of step back and get a few things straight. So there’s there’s cellular production and there’s acellular production.
Cellular production is literally like taking a biopsy of animal cells. So, you’re taking once living cells that were a part of a real animal.
And growing large quantities of meat from them, effectively, right?
Putting them together, to making food to make food or or materials. Right? So that’s that’s most of me, that’s mental speech. Right? That’s cellular production.
And there’s acellular production where you’re using cells or microbes like yeast or bacteria, not as a base to set the products.
But it has a factory to produce like the fats and proteins. So there’s there’s no unlike cellular production.
There’s there’s like no living cells or like living material in the finished product as there once was with biopsy itself from a chicken, say.
Right? So examples of acellular production are perfect day and and clear foods, just two They’re more, but but those are two easy ones. They’re creating, you know, cultured dairy, you know, eggs.
Milk, egg white, so I should say.
So important distinction to draw there. Those are two camps and two solutions. Now, some of the broader trends, you know, Me consumption is continuing to rise, the the the per capita from, you know, forty ish kilograms in twenty fifteen to fifty ish kilograms per person in twenty twenty.
So the the problem is only continuing some of those negative externalities or are only worsening when we’re talking about greenhouse gas emissions, water usage, etcetera.
What I found was an interesting thesis to guide the new crop, Chris Curr, at scale, clean meat will be much more efficient than conventional animal agriculture.
Today, we also grow tails and eyeballs and hair and an enormous amount of manure. What all we want is a little bit of meat. That’s like an interesting counter to some of those negative externalities.
We’re thinking about leaving the eyeballs and hair and and manure aside and just focusing on the means.
In line with Churchill’s prediction so long ago.
A lot of the problems we’ve outlined when it comes to bioreactor design, scaffolding, innovation, cell culture media, innovation, those, that progress has been made in collaboration between sort of academia and and nonprofits, which I’ve been really surprised to see I’m encouraged by, really.
The cost to manufacture this meat is dropped like ninety nine plus percent in literally like less than five years, which is pretty amazing. One point two million bucks a pound to like five, six thousand bucks a pound.
And in two years, we’re looking at, you know, twelve dollars on the shelf.
So clearly we’re doing something. Right?
Memphis Meets has announced that they’ve they’ve developed a fetal bovine serum free cell culture media.
So that allows for that animal free label that we were talking about was a challenge.
That is proprietary.
It’s not something that’s, as I understand it, available across the industry, but is really only contained within Memphis Meets, certainly a big competitive moat there. I got to imagine.
And then new harvest, which is a nonprofit we’ll touch on here in a moment. They’ve been funding critical research and also incubated incubated companies in in, you know, these problem areas.
So they’ve identified problem areas they funded research into these, you know, problems and they’ve funded spun out companies two companies have spun out actually.
We mentioned Perfect Day and and Clar Foods. We’ll talk about we’ll talk about new harvest more in a moment.
So some of the legacy players here important to note that today like the real hardcore like growing a meat in a test to sell culture bioreactor is not being done by these names mentioned here.
That’s all being done by startups.
That said, you know, they recognize, for instance, you know, particularly Cargill, Tyson, they recognize the competitive threat that some of these companies, technologies, trends pose.
So Cargill, for instance, invested in Memphis Meets and Kalista.
I’ll talk about them in a moment, and you know Tyson invested also. In in Memphis Meet’s Continental brain not shown here.
Probably help company large you know, ag, footprint.
They invested in perfect day, which is a lab, sort of cultured dairy product.
You know, a lot of the the smaller players here are what I would kinda call industrial biotech one dot o. Sartorius just as an aside, they make bioreactors.
So they’re pretty well positioned to, you know, capitalize on some of these trends. I don’t have a good sense of what they’re doing as it pertains to like custom products developed for cell ag.
But I know they’re a large power reactor producer and, you know, have a reason to care.
But sending others and Trexon could access Amiris. Yeah. These are kind of your industrial biotech one dot o, you know, fermenting algal based products, originally kind of biofuels centric pivoted into higher value end products.
We’ll talk about them more in a bit.
But they’re not great comps.
Although, they do present, I think, a good, you know, lessons learned roadmap kinda story.
So some of the emerging players in the space this is still a very early and emerging field.
I mean, as we mentioned, the first lab grown burger was only you know, eaten in twenty thirteen.
Right? So this that was not too long ago.
So, you know, most of these companies have raised you know, less than a hundred million bucks.
I see that I’ll highlight it meant this means we’ve talked about they’re probably the leader.
When I think about cultured meat production. They’ve raised about twenty million bucks, cargills in on them.
Some of the companies that have raised more and are kind of more sizable. Pampden Creek, they’ve raised, you know, three hundred and seventy five million bucks roughly from Coastal Ventures and others are currently valued at one point one billion, they they are both kind of plant based mayo.
They rebranded as just food. And so they you’ll see them on and, you know, grocery store shelves.
They have a plant based mayonnaise and and other kind of dairy products.
But they actually purchased some of the earliest cultured meat. The license of the cultured meat patents and have currently claimed to roll out a chicken product here that’s cultured in twenty eighteen through restaurant, high end food service.
TBD and whether or not it happens, but that’s that’s the claim there.
Both threads, is, you know, a synthetic spider silk company.
They raised two fifteen million bucks from Temsec and others, they’re currently valued at just north of six fifteen million they’re more in the synthetic materials camp. I put them in the same bucket as Mar, meadow.
And then Gekko Bioworks, they’re a little bit tangential.
They’re they’re developing that the enzymes, that allow for a cellular production.
And they’ve raised four hundred and thirty million bucks from, at this point, large private equity general Atlantic, one firms and others and they’re currently valued north of the billion as well.
But there’s a lot going on in the space, a lot of the seed in early stage, which is encouraging for someone like us that’s investing at this stage. We’ll talk about some of these names later.
Leading investors, there’s a lot of folks getting involved.
I’m gonna I’m gonna highlight a few names we’ve mentioned them before, but but they’re important for us as a sort of a seed and and series a, investor from from a deal sourcing perspective. New crop capital and straight dog capital are are two that that are, you know, great sources of of deal flow.
They’ve made investments in Memphis Meets, Geltor, Super Meech, Indi BIO is kind of the granddaddy of a mall, if you will. They they spun out at as sort of an an accelerator, Clara foods, Geltor, Finless foods, Memphis Meeds, Sugar Logics, a number of of sort of synthetic bio and and cultured meat, cellular agriculture deals.
A lot of this Tealgics are investing.
I mentioned Tyson, Connell, Grain, one that I’ll I’ll call out that did catch my eye. Valley Gifford, they’re a Scottish asset manager.
They’ve they’ve invested in, you know, over fifty deals just in the last four years, including Ginkgo, BioWorks, bulk threads and, you know, soil microbiome company known well to us that I select Indigo Ag.
They’re a later stage strategic investor, but have shown an interest in this space, and perhaps it’s a group we should get to know better.
But also, you know, I I just want to call out quickly before moving on. This base is still early and it’s very benefactor driven.
So you know, Bill Gates, Richard Branson, Sergey Brand, critscars, Jeff Bezos, LiCAing, you know, these are, you know, large sort of captains of industry that have have taken on this as a sort of this this this issue cellular agriculture as, you know, they’re the pet project or or some passion project, I guess you’d say.
And they’re investing long, they’re long in the space and and are, you know, seeding and funding not only businesses, but also nonprofits, which which is perhaps a good a good segue here. When we look at relevant experts and and events, the first cultured burger I’ll just just highlight Moastricht University Mark Post is a professor there. He’s responsible for the first lab grown burger.
New harvest is a nonprofit research institute, accelerating breakthroughs and sell ag They were behind that first cultured burger as was Sergey Brin. He’s a big backer there.
That was in twenty thirteen. They also funded research.
This is new harvest that led to the formation of Clarafoods and perfect day. Those are two l a cellular processes that are producing dairy substitutes.
And they’re currently funding research at Kent State and Tufts and C State in bioreactor design, scaffold materials, and a number of other identified problem areas. And they also – this is a good segue – they have a conference every year, the third year, it’s hosted, in July, the new Harvest Conference this year, July twentieth, 21st, at the MIT MediaLab and and Cambridge Mass for those interested.
I think I think that’s a great place to get a bit of a baptism in in setting our agriculture and and culture and meat, it’s it’s really positioned itself as a leader a leading pilgrimage for those for those interested.
Another all I’ll highlight is a good food institute. They’re kind of split between plant based and cultured. But like New Harvest, they’ve done a lot to fund research into the space.
So let’s look at some of the recent financings and deals that have been done. I’ve mentioned some of the different buckets, but I’ll just call them out. Here, again, when we think about the companies that are emerging and being funded, They’re really breaking down into kind of five buckets.
You have your cultured meat, your cultured dairy, your cultured leather and other materials, cultured animal and pet feed. And then sort of other high value products. So wild earth, Calista knit bio. They all fall in that animal and pet feed bucket.
Perfect day, Clara Foods, they’re in the dairy bucket.
Both threads, modern meadow, they’re definitely in the leather and materials bucket.
You know, some of the ones that get the most press, I think, are in the meat bucket. So that’s, oh, that’s Memphis meats.
That is Super Meat, Hampton Creek, and then, you know, then there’s sort of your lesser known higher value products.
So I think I’d I’d stick Jaltor in that bucket.
I would I would stick. Ginkgo Bioworks in that bucket.
And and a few others.
But, you know, there’s there’s certainly a number of different pads emerging, more later on on where I see and where we see I select playing.
But the companies that have kind of raised the most and are kind of highest profile at this point are just foods also known as Hampton Creek.
You know, they’re valued at over a billion. Ginkgo Biower they’ve, you know, Series D. They raised two hundred and seventy five million bucks at a one point one billion pre money.
Both threads is another we’d call out you know, those are later stage deals.
And then Memphis meets has has gotten a lot of press because they’re really a leader in the in the cultured meat space. You know, they they phrase from from Cargill, Tyson, and and others, just shy of twenty million dollars All right.
So I mentioned I mentioned some of the exits and some of the the industrial biotech one that o’s and and that strategic slide earlier.
The sell ag as a trend, these companies haven’t traded out yet. We’re still early days in this this commercialization wave, if you will, if I were to put, you know, look forward five years or so.
I can see Hampton Creek, Modern Meadows, police that this needs, maybe bold threads, can go Bioworks.
Some of the later stage companies we’ve already highlighted, you know, the those could be ones that that trade out either by going public, you can see Hampton Creek potentially doing that or being acquired by a large strategic. I could see that in the case of of Memphis Meet to say, you know, going out to a company like Tyson.
But that’s all conjecture.
But it’s important to note, there was in sort of the mid Mid Ots sort of two thousand three to two thousand ten, a wave of companies that that were founded and then exited kinda in the twenty ten to twenty fifteen range.
You know, these were kind of industrial biotech one point zero. And I think there’s a great series of lessons learned that can be you know, derive from from these stories.
There are a handful of what I’ll call winners.
I’ll point to two and that’s really amorous could access and Trexon, you know, they were able to kind of pivot from some of the commodity biofuels products into higher value end products in time.
But those others who have traded out in more disappointing kind of asset sales TeraVIA being one example of the twenty million dollars asset sale and they originally went public at I think it was a four hundred million dollars market cap.
These companies weren’t able to to pivot out in time.
And they suffered consequences.
You know, Jeevo, bio amber, These are companies that went out at couple hundred million dollar evaluations on public and are now effectively penny stocks.
So, you know, lessons learned there to be sure.
And and and perhaps from our perspective, you know, maybe maybe more shareholder value had in an M and A and then an IPO proof of thought.
We’ve got roughly ten minutes left here. So let’s just quickly dive into some of the analysis.
Just to recap our findings, large market opportunity, seven hundred billion dollars today, your your cultured alternatives are small but growing, you know, one percent call out of sales, meet products by twenty twenty two.
Still problems in scalability, manufacturing cost challenges, so uncertainty around public perception and and regulatory treatments.
But still, you know, the fundamental challenges are engineering problems.
Not science problems.
So so that that gives us confidence.
And, you know, foundations nonprofits, academia are are really collaborating to solve these these engineering challenges, new artists, and the good food institute being being to highlighted examples.
Major players in the space are are investing.
Cargill, tyson, two primary examples. They recognize a competitive threat and are getting a toehold You know, emerging startups are kind of falling into five different buckets. You have the cultured meat.
It’s one, two, cultured dairy.
Three, so your materials and leather, four, animal feed, and then five sort of high value and other end products Talking about those in a moment.
And in leading investors at the early stages, Indi Bio is you know, a well regarded synthetic biology accelerator program, new crop capital straight odd capital and also power plant ventures are our three early stage funds that are are placing bets in this space.
Viking Global, a large hedge fund is making some bets as well as are a lot of called benefactors, your gaitises, your Brancins, your Bizzos in the world.
And, you know, new harvest has really emerged as a leading sort of expert in the field, their their new harvest conferences in July this year in in Cambridge math. Worth attending for those interested to learn more about cellular agriculture.
And, you know, doctor Mark Post is is really the the first guy to do it.
From Moxtric University funded in part by by new harvest and Sergey Brent. He’s kind of the godfather.
Of this world.
So let’s talk a little bit about kind of our thoughts and our thesis.
Should we invest? Well, we’re we’re getting there. We’ve looked at a bunch of deals in the space, kicking kicking ideas around, talked to a number of companies, their logos are shown here.
This this trend, if you’ve been listening to our our deep dives, is not lost on on us.
This opportunity is one we’re we’re eyeing quite seriously. Sailor agriculture is an area of interest.
Opportunity space is to consider, you know, we select are cautious around brand building.
So, you know, we’ve for for those of you that have been to a grocery store, whether it’s a whole foods or a safe way. You’ve probably seen the Beyond Meat Burger that’s plant based.
We’ve all tried the Impossible Meat Burger locally, also plant based. It takes a lot of money, a lot of dollars to to build those consumer brands to muscle your way into grocery and secure that shelf space.
Not sure that we’re in that business. Not sure that that I select wants to get behind. That brand building effort to roll out a consumer facing product.
So tentative no, on on some of the the brand building efforts, which I think we’re observing in in Memphis meets.
And Hampton Creek.
Few areas to consider. We’ve looked at animal feed Nipbio is one. They’re on aquaculture feed.
Kalista is a little late for us at this point, but that’s another deal that’s, you know, our culture feeds from cultured processes or bioreactor based processes, you know, what can we do outside of aquaculture, maybe it’s cattle, maybe it’s pork, chicken, feed, you know, getting animal feed products or even higher value pet foods out there.
That’s an area I think of interest for us. Less brand building when you’re selling to cows.
And then enabling technologies. Bioreactors, scaffolding, building the companies that are selling picks and shovels in the middle of a gold rush to use an analogy.
Some of those companies will talk about below.
But gel4, they’ve got an interesting technology that can allow for some of that scaffolding that can maybe get us to a bone in rib eye. And then, unclear, I’m not sure we have an opinion yet.
But some of the higher value non food proteins. So so for example, Ambient, a company that’s highlighted below.
They’ve they’ve developed synthetic processes that can create rhino horns, and elephant ivory, I kid you not.
So thick bioscience similarly has process, culturing process that drives, that produces horseshoe crab blood, which is critical you laugh, but it’s it’s critical in in certain medicines.
And so, I imagine that that those processes are sort of platform process technologies that can be extended into other areas.
But maybe they’ve got the right strategy by going after these higher value products in the near term. I don’t know, worth considering.
Some food ingredient plays. You know, we haven’t seen yet, I think the right play there.
But you know, maybe there are well, for instance, one of our portfolio companies, they’re manufacturing a sugar using an enzymatic process. Maybe there are other food ingredients that we can manufacture using a cellular or cellular production methods that could be interesting.
And I don’t know.
Culture need for human consumption whether it’s branded or unbranded or the winners are excited.
His Memphis meets a winner and everyone else is irrelevant. I don’t know, but what I do know is that a lot of these companies are still early. Memphis meets only raised twenty something million bucks. Most of meats and super meat are are two that are also in the space They’ve raised both, you know, both of them have raised less than five million bucks each. So they’re still squarely within our wheelhouse.
These are a few names that I thought I’d throw out and opportunities for us to consider.
Also think given what we know now about new harvest, worth establishing a relationship there because they’re they’re not only seeing the problems, but they’re funding the solutions they’re getting in with the research institutions, tufts, NC State, Moistrict, Kent State, funding that initial research and spitting out those companies.
So I think worthwhile getting to know those, getting to know those folks.
Well, with that folks, this thus concludes today’s deep-dive conversation on cellular agriculture. I certainly appreciate it. Everyone’s time and attention. Happy to field questions. Now or offline. This is certainly a fascinating topic for us to dive into. And an area of future disruption and exciting ability. So with that, I thank you for your time and attention.
My name is Dan Griffith. An associate here with I Select Fund and a pleasure having you on the line for today’s deep dive webinar on cellular agriculture.