New York (CNN Business)Memphis Meats, which grows meat from animal cells, just got a huge endorsement from some big-named backers. That will take it one step closer to selling its product, but it’s still a long way off from hitting store shelves.
The five-year-old startup said Wednesday it raised another $161 million in a new round of financing. The latest round of fundraising is led by SoftBank Group, Norwest and Temasek. It also includes flashy investors like Bill Gates and Richard Branson, as well as meat companies Tyson (TSN) and Cargill. That brings the company’s total funding above $180 million.
Memphis Meats is one of a number of young companies attempting to source meat from animal cells rather than by slaughtering animals. Consumers shouldn’t be able to tell the difference between cultured and traditional meat, the company claims.
Cell-based chicken made by Memphis Meats. Theoretically, cultured meats should appeal to the same type of customer who is interested in plant-based meat alternatives. Cell-based meats have a relatively low impact on the environment and don’t harm animals. They may not be nutritionally different from animal meat, but they are potentially safer — because there’s no risk of contamination from animal matter, such as feces or blood. Read MoreBut there are big differences between the two products. Protein made by Impossible and Beyond (BYND) is sourced from plants instead of meat. But cultured meat is meat — just created, artificially. So far, Memphis Meats has been able to produce beef, duck and chicken meat. But the technology it uses can be applied to other types of meat, like seafood, and used to create very specific varieties, like grass-fed or lean beef. And unlike plant-based protein, which is widely available, cultured meats are still a mystery to most consumers, and will probably remain so for some time.
Cultured chicken should taste just like regular chicken to consumers. The USDA and FDA announced in March 2019 that they plan to regulate the nascent industry together. With a path to regulation, cultured meats are closer to being a commercial reality. But it’s unclear exactly how long it could take before they are. The USDA’s Food Safety and Inspection Service said “there is currently no specific timeline for when the regulatory framework to oversee the production of cell-cultured products will be finalized.”Still, cell-based meat has progressed quickly since Memphis Meats launched. CEO Uma Valeti told CNN Business he has seen “this whole industry come from science fiction to being real.” At first, it was difficult to convince investors to believe in a hypothetical product. Now, as other companies pop up around the world, it’s easier to make the case for commercial viability. Priti Youssef Choksi, a partner with Norwest, said that companies like Memphis Meats help address a problem in the meat industry: Demand for meat is growing, but factory farming is bad for the environment.”There’s just no way our planet can sustain that kind of demand on our land and water,” Choksi said. Norwest is investing $25 million in this round. “We are super excited about Memphis and their team.” For companies like Tyson (TSN), one of the world’s largest meat producers, the investment could be a way to ensure it doesn’t lose control of the market if consumers opt for cultured meats, and stave off criticism about the environmental impact of the meat industry.
With the additional cash, Berkeley-based Memphis Meats plans to open a factory where it can start producing prototypes to showcase its products to interested customers. It should take about 18 months to two years for the plant to be up and running, Valeti said. When products eventually hit the market, they should be affordable for consumers, he added, noting that the company is still determining how to price commercial products.
Source: edition.cnn.com