European cultivated meat startups in “valley of death”, amid funding challenges

European foodtech startups trying to revolutionise the food sector through lab-grown meat are stuck in a “valley of death”, according to a non-profit that promotes cell-based alternatives to traditional animal products.

The hype around lab-grown meat, also known as cultured meat, and cultivated meat, has been around for years.

Billions of dollars have been invested in a sector, which advocates say can bring huge environmental and economic benefits to economies.

But critics say astronomical manufacturing costs – and production complexities – mean the industry can’t be scaled and investors are ploughing millions into nothing more than a bet.

Some investors, it appears, are being scared off: cultivated meat and seafood firms raised $225.9m in 2023, dwarfed by the $922.2m raised in 2022.  The nascent industry has also been hit by startup closures and job cuts.

However, in 2024, investment appears to be steadying: in Europe, cultivated meat firms raised €45m in the first six months of 2024, nearly half as much as the €116 million raised throughout 2023.

Startups facing “valley of death” scenario

Seth Roberts, senior policy manager, the Good Food Institute Europe, warned European cultivated meat startups are facing a “valley of death” scenario.

Roberts said:

“The sector faces a major challenge with a lack of infrastructure – right now, the large-scale facilities needed to ramp up production don’t exist across Europe, and expanding access to infrastructure will be critical to commercialising cultivated meat.

“Many smaller companies face challenges securing funds to build facilities, creating a ‘valley of death’ in which new products get stuck in the development phase or move abroad.”

Meanwhile, Jim Mellon, the high-profile businessman, cultivated meat flag waver, and founder of Agronomics, a VC fund focused on cultivated meat and alternative proteins, believes the EU- where no cultivated meat has been approved for human consumption- is in danger of losing out to China and the US, missing out on “one of the biggest opportunities to combat climate change”.

EU’s “culture and regulatory resistance”

Mellon says there is a “culture and regulatory resistance” to technology being applied to improve the food system across the EU bloc.

Mellon says:

“I am not optimistic about regulatory support for novel proteins under EFSA (European Food Safety Authority) and equally do not see novel proteins taking off in the same way they will in the US and APAC.

“In addition, Europe does not have some of the key inputs, such as low-energy costs, that are required to make cultivated meat available at globally competitive prices.”

Instead of killing animals for meat, the cultivated meat process (which is complicated and expensive) involves the removal of muscle cells from a living animal, typically using local anaesthetic. 

These cells are added to a nutrient broth that gives them the essential ingredients to grow and multiply.

Typically, the cells are grown in fermentation tanks called bioreactors in a process like brewing yeast.

The cells produce cell muscle tissue, which can be transformed into cultivated steak, chicken nuggets or even salmon sashimi.

2020 optimism

Rewind to 2020 and some observers thought that the “landmark” first regulatory approval for the human consumption of cultivated meat (Eat Just’s cultivated chicken) in Singapore was a watershed moment.

And there have been subsequent industry wins: last year US startup Upside Foods and Good Meat (owned by US firm Eat Just) received approval from the US Department of Agriculture to produce and sell cultivated chicken;  other regulatory victories include the first approval for cultivated beef being granted in Israel; French food startup Gourmey becoming the first firm to apply for EU market access for cultivated meat, to sell its cultivated foie gras product; and the UK becoming the first  country in the world to approve cultivated pet food.

Other wins have appeared in the shape of the first European tasting of cultivated meat; meat juggernauts like Tyson, JBS and Cargill investing in cultivated meat firms while Hollywood stars like Ashton Kutcher and Leonardo DiCaprio have backed the industry.

On the flip side, on top of falling VC funding into the sector, other setbacks include cultivated meat being banned in Italy, Hungary, Florida and Alabama while politicians in France and Romania also want it banned.

Meanwhile, Upside Foods, which is backed by $600m from investors including Bill Gates and Richard Branson, has been hit by layoffs while a partnership with a high-end San Francisco restaurant, which was selling its cultivated chicken, ended after a few months.

In June this year, US cultivated startup SciFi Foods, backed by $40m, closed and its founder Joshua March told the Sunday Tums that he “wouldn’t be surprised if none of the current crop of companies are able to make it”.

Current state of play

So, what is the current state of play?

Mellon points to “significant funds” raised by Agronomics’ European portfolio companies, such as the Netherlands-based Mosa Meat recently raising €40m.

He says that during the 2020-2021 hype cycle, generalist investors jumped on the next big thing, leading to cultivated startups, with poor tech platforms who shouldn’t have received funding, getting funding.

He adds:

“The well-funded companies that can hit their milestones will emerge from this downturn with less competition and greater capacity to flourish.”

Furthermore, he says the industry is seeing “green shoots”, pointing to multiple companies, including those within its portfolio, that are expecting regulatory approvals in multiple markets in the next 12 months.

Roberts, meanwhile, has called for more startup support from established food industry players and the public sector.

Roberts adds:

“The European sector has all the skills needed to succeed, but where the industry will be in five years depends on whether national governments and the EU develop coherent strategies to support the development of this food.

“To make cultivated meat affordable and accessible to everyone and maximise its potential to boost food security and create future.”