As meatless burgers have landed at Burger King and Carl's Jr., dozens of start-ups are racing to be the first to sell beef grown in a lab.
Now, one of those start-ups has raised $14 million to produce its cultured meat products.
Future Meat Technologies, which was founded in 2018 and based in Israel, is trying to do for lab-grown meat what Beyond Meat and Impossible Foods have done for plant-based meat.
Future Meat is far from the only company that has set out to create affordable cell-cultured meat. Several dozen start-ups, mostly in the U.S. and Europe, have sprung up in the last couple of years to develop the product.
S2G Ventures, a Chicago-based venture capital fund that invests in food and agriculture, and Emerald Technology Ventures, a Swiss-based firm, led the $14 million round, Future Meat announced Thursday.
"What we think separates Future Meat is that they have an actual plan to get to commercially viable price points that doesn't require massive capital expenditures or future breakthroughs," S2G managing director Matt Walker said in an interview.
Future Meat plans to use the proceeds to expand research and development efforts and build a cultured meat manufacturing facility to begin production next year.
Cultured meat is made by putting stem cells from the fat or muscle of an animal into a culture medium that feeds the cells, allowing them to grow. The media is then put into a bioreactor to support the cells' growth.
By recycling some parts of the media and using lower-cost nutrients, Future Meat is working to reduce the high costs of making lab-grown meat.
"That's 99% of the cost," Future Meat CEO Rom Kshuk said.
Future Meat has managed to reduce production costs to $150 per pound of chicken and $200 per pound for beef.
The production plant will be able to produce half a ton of fat per month, according to Kshuk. The start-up plans to release hybrid products that blend plant proteins with lab-grown fat for aroma and flavor in 2021, once it can further reduce prices to compete with other meat alternatives.
The next step in getting its products to market will require switching from pharmaceutical-grade bioreactors to food-grade versions, Kshuk said. By 2022, Future Meat plans to launch a second line of entirely lab-grown meat that will cost less than $10 per pound.
In February 2018, Future Meat's co-founder and chief scientist Yaakov Nahmias said the company had brought the production price down to $800 per kilogram and would reach $5 to $10 per kilogram by 2020.
Like Impossible Foods, Future Meat plans to focus primarily on beef and to start selling its products first to restaurants, then to retailers.
"I'm just a student of what Impossible and Beyond are doing," Kshuk said.
Kshuk thinks cultured meat would give consumers more choice when it comes to buying protein at the supermarket: Consumers would eat traditional meat one day, a plant-based burger the next and lab-grown meat the following day.
Investors like S2G are betting that cultured meat start-ups like Future Meat will benefit from the same consumer trends as Beyond Meat, which was backed by S2G, and Impossible Foods.
"I think we've agreed that there is that portion of the consumer base that would rather not eat animals if they can avoid it," Walker said.
Tyson Ventures, the venture capital arm of Tyson Foods, has participated in Future Meat's seed and Series A funding rounds.
"We value their belief in Future Meat," Kshuk said. "We value the work that we're doing together. Obviously, they're bringing validation to a young company."
Tyson, the largest U.S. meat producer, has been investing in start-ups focused on plant-based and cultured meat. It exited Beyond ahead of its blockbuster public market debut and holds a stake in Memphis Meats, a U.S.-based competitor to Future Meat.