Silicon Valley cell-based meat startup shatters records in fund-raising

US cell-based meat producer Memphis Meats has raised $161 million from high-profile investors in the world’s largest ever funding of cell-based meat production.

Memphis Meats said the funding was led by SoftBank Group, Norwest and Temasek and joining the round were new and existing investors including Virgin founder Richard Branson, Microsoft founder Bill Gates, agribusiness major Cargill and US meat producer Tyson Foods.

The financing will allow Memphis Meats to build a facility to scale up production, although the company did not give forecasts on where it would be located and what output would look like.

“We are providing compelling and delicious choices by producing real meat from animal cells, its natural building blocks. Cell-based meat is poised to dramatically expand humanity’s capacity to feed a growing global population while preserving our culinary traditions and protecting our planet,” said Uma Valeti, co-founder and CEO of Memphis Meats.

Cell-based meat production involves growing meat from animal muscle cells in laboratories as opposed to growing animals.

It has been touted as a way to satisfy global growing meat demand while minimising meat production’s impact on the environment.

Livestock farming, according to some estimates, accounts for almost 20% of greenhouse gas emissions, 70% of arable land use and almost half of all crop production for feed.

According to a report funded by cell-based technology researcher New Harvest, replacing conventional meat with cultured meat would cut greenhouse gas emissions by 78-98%, land use by 99%, water use by 82-96% and energy use 45%.

However, these savings have been called into question by other analysts.

Nevertheless, analysts expect huge growth in cell-based meat production.

A report released by consultancy AT Kearney last year estimated that 35% of all meat will be cultured in 2040 and 25% will be vegan replacement.

Yet the industry faces huge challenges in getting the costs down: one chicken nugget is estimated to cost $5.

And while that is a huge reduction on the cost of the first cell-based burger at $300,000, it’s still more than 10 times the costs of meat from a factory-farmed chicken and production has yet to be done at scale.

As a result, funding for cell-based meat is a fraction of the funding that has been piled into the meat replacement sector, with more than $1 billion in financing funnelled into companies such as Beyond Meat, Impossible Foods and Just Foods, who use beetroot, eggs and a lot of salt to create meat-like alternatives.

With 50% of all crops grown globally (and most corn and soybeans) headed to animal feed, the rise of lab-grown meat and their alternatives is a huge threat to US farmers.

Despite the funding, Memphis Meats would not be the first company to start up a production facility of lab-grown meat.

Last year Israeli startup Future Meat Technologies said it would build the world’s first production plant outside of Tel Aviv after raising $14 million in funding.

However, unlike Memphis Meats, which says the first patty it produces will be 100% lab-grown, Future Meat Technologies will start to produce products that are one-third cultured meat and the rest from meat alternatives such as eggs, soybeans, and beetroot.

A further question is whether government agencies will regulate and approve the launch of cell-based meat production – one of the biggest barriers to bringing the product to market.

“The company has not yet announced a date for product launch, and is working with regulatory agencies to ensure a timely and safe market entry,” Memphis Meats said in a statement Wednesday.