Record US$5 billion invested in alt proteins in 2021, but GFI warns it’s not enough

03 Mar 2022 --- New Good Food Institute (GFI) data reveals that globally, 2021 was a “record period” of investment in global companies creating sustainable alternatives to conventional animal-based foods. However, GFI stresses that alternative proteins are underinvested in as a climate solution.

Cell-based meat and seafood companies reportedly secured US$1.4 billion in investments in 2021 – the most capital raised in any single year in the industry’s history.

Plant-based meat, seafood, egg and dairy companies secured US$1.9 billion in investments in 2021.

Fermentation-based protein companies secured US$1.7 billion in investments in 2021.

The research focalizes plant-based meat, seafood, egg and dairy companies; cultivated meat and seafood companies; and fermentation companies devoted to alternative proteins.

Alternative protein companies have raised almost US$11.1 billion in invested capital since 2010, 73% (US$8 billion) of which was raised since 2020 when the coronavirus first disrupted global markets.

Cell-based meat and seafood companies reportedly secured US$1.4 billion in investments in 2021.“The investor community is beginning to see the huge potential of alternative proteins to transform our food system, as well as the strong potential to meet their target returns,” remarks GFI senior investor engagement specialist, Sharyn Murray.

“With more and more investors acknowledging that climate risk is investment risk, alternative proteins offer a scalable solution that gets the world closer to a more secure, carbon-neutral food system,” she stresses.

“Managing climate risks is impossible without addressing food, and agriculture and alternative proteins offer us a tool to do that.” 

GFI’s analysis of investment activity within these industries was conducted using the PitchBook Data platform and shows that global alternative protein companies secured US$5 billion in disclosed investments in 2021, which is 60% more than the US$3.1 billion raised in 2020 and five times as much as the US$1 billion raised in 2019.

Cultured meat tech shines on
Cell-based meat and seafood companies reportedly secured US$1.4 billion in investments in 2021 – the most capital raised in any single year in the industry’s history and more than three times the US$400 million raised in 2020.

Notably, these cultivated meat companies have raised US$1.9 billion in invested capital since the first disclosed investment in the industry in 2016, and more than 70% of this was raised in 2021 alone.

While 2020 saw the first cultivated meat company raise a Series B funding round, 2021 added eight more growth-stage rounds – Series B or higher – to the tally. In 2021, the industry’s investor base grew 62% from the prior year, bringing the total number of unique investors to 458.

This included Future Meat Technology’s “largest-ever cultured meat investment” of US$347 million Series B, Aleph Farms’ US$105 million Series B and BlueNalu’s US$60 million convertible debt raise. 

Plant-based powers onward
According to GFI, plant-based meat, seafood, egg and dairy companies secured US$1.9 billion in investments in 2021, which is on par with the US$2.1 billion raised in 2020 and almost three times the US$693 million raised in 2019.

Companies in this segment have raised US$6.3 billion in investments since 2010 and 30% of this was raised in 2021 alone.

Plant-based meat, seafood, egg and dairy companies secured US$1.9 billion in investments in 2021.This included Impossible Foods’ US$500 million funding round, which adds to the company’s record US$700 million funding haul in 2020; NotCo’s US$235 million Series D; v2food’s US$110 million Series B; and Next Gen Foods’ record-breaking US$30 million seed round, which is nearly three times the size of the next largest seed round raised by an alternative protein company. 

In 2021, the industry’s investor base grew 40% from the prior year, bringing the total number of unique investors to 1,093.

The sustained popularity of the plant-based movement this year forms the basis of Innova Market Insights’ second Top Trend for 2022 “Plant-Based: The Canvas for Innovation.”

Fueling fermentation-based protein
The data further highlights that fermentation-based protein companies secured US$1.7 billion in investments in 2021, which is nearly three times the US$600 million raised in 2020.

Companies in this alt-protein category have raised US$2.8 billion in invested capital since the first GFI-tracked investment in the industry in 2013 and 60% of this was raised in 2021 alone.

This included Nature’s Fynd’s US$350 million Series C, Perfect Day’s US$350 million Series D, Motif Foodworks’ US$226 million Series B, and The Every Company’s US$175 million Series C.

In 2021, the industry’s investor base grew 43% from the prior year, bringing the total number of unique investors to 434.

More funding is still needed
While investor confidence in alternative protein companies is driven by multiple market factors, the public health and environmental crises that gripped the world throughout 2020 and 2021 have illuminated the risks associated with business-as-usual portfolios and practices, GFI stresses.

Fermentation-based protein companies secured US$1.7 billion in investments in 2021.Against this backdrop, the prospect of meat produced with zero risk of contributing to zoonotic disease transmission and dramatically less emissions than conventional meat has even greater relevance.

“While alternative protein investments have grown at an impressive rate, they remain a miniscule fraction of the trillions of dollars that have been invested globally in climate technology companies as a whole,” the organization highlights.

As climate technology industries like renewable energy and electric vehicles have matured, they have attracted a wide array of investment beyond venture and private equity capital, including government funding, funding raised through public equity and debt markets, project finance and more that is not captured in the US$47 billion private capital total. 

“Indeed, renewable energy and electric vehicle investments significantly overshadow alternative protein investments relative to the climate mitigation potential of each of these industries, which illustrates that alternative proteins are underinvested in as a climate solution,” states GFI.

“Considering the scale of emissions reductions that would occur with a shift to alternative proteins, this is a critical moment to invest in the technologies and innovations that can move our food system to net zero, and fast,” says GFI vice president of corporate engagement, Caroline Bushnell.

“Ramping up investments in sustainable alternative proteins will allow companies to fund critical R&D, scale production, and bring down costs to effectively compete with conventionally produced animal protein and ultimately bring alternative proteins to more plates.” 

By Benjamin Ferrer