Investors are having second thoughts about supporting lab meat startups.
It has been reported that one of the world's largest expansion of product production has been shut down on investor concerns that it won't be viable. The company, Upside Foods, is retreating to its existing facilities and will remain a niche producer in the foreseeable future.
They are not the first to pull back or struggle to attract investor interest.
And early adopter, listed Beyond Meat is struggling too, with their share price down more than -50% over the past year. And their travails don't help others starting up.
In fact, American venture capital funding for the sector dropped to US$177 mln last year, down from US$807 mln in 2022.
“You can’t fault investors for being more cautious in this environment; there’s no playbook for what we’re doing,” said the head of another lab meat startup that shut down in 2023.
If lab meat businesses can't get established in the US, it is doubtful there will be enough patient capital support anywhere else to build the industry.
Behind this is growing scepticism about consumer adoption levels. Initial research about potential consumer attitudes was encouraging but subsequent rollouts haven't proven the same level of demand. And combined with unexpected production and distribution costs, investor enthusiasm is waning.
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