The future of food and feed: Exploring investment in cultured meat and alternative proteins

Welcome to the latest instalment in our series on cultured meat and alternative proteins, part of the regulated products series.

In this episode, Jessica Burt is joined by Zickie Lim, a corporate partner who leads our venture capital and investment team, to discuss the investment landscape in this innovative sector.

Investment landscape overview

Over the past 18 months to two years, venture capital investment activity both in the UK and globally has seen a significant decline. Certain sectors, including food tech and agrifood, have been particularly hard hit. Despite this downturn, there have been notable advancements, such as the first approval for the use of alternative protein cultured meat in pet food.

Future opportunities in food and feed innovation

Despite the challenging investment climate, the food sector has seen a significant increase in the amounts raised over the past decade. Innovative areas, particularly alternative proteins, continue to attract investment. Recent examples include Adamo Foods, which raised £1.5 million for its fungi-based meat alternatives, and Uncommon, a Cambridge-based cultivated meat pork developer, which secured £24 million in a round led by Balderton Capital. These investments highlight the ongoing appetite for innovation in the sector.

Tips for attracting and preparing for investment

For those looking to attract investment in this sector, it is crucial to be well-prepared. Here are some key tips:

1. Get your house in order: Ensure all assets, particularly intellectual property, are properly secured and free of claims. Resolve any employee-related issues to present a stable and litigation-free environment. Make sure you have a clear understanding of your route to market and if any approvals (such as novel foods or AHPA approvals) are needed.
2. Plan your timeline: Investment deals are taking longer to close, often three to four months. Give yourself ample time to secure investor commitments and complete the legal processes without being under pressure.
3. Understand investor expectations: Be clear about what investors are looking for in terms of innovation, market potential, and scalability. Tailor your pitch to highlight these aspects and demonstrate how your business meets these criteria.

The alternative proteins sector is poised for growth, and by following these steps will help to better position companies to attract investment and navigate the complexities of the current investment landscape.

If you need assistance navigating this sector, please get in touch with Mills & Reeve for expert guidance and support.

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