• Covid-19 has put the spotlight on food security concerns, increasing interest in the alternative protein industry
• On Wednesday (Dec 2), Singapore became the first country to approve the sale of lab-grown meat
• Alternative protein-focused venture capital firm Big Idea Ventures said its fund has more than doubled in size since Covid-19
• Despite challenges, investor interest has increased as well, said alternative protein startups

SINGAPORE — Since Covid-19, the size of venture capital firm Big Idea Ventures’ New Protein Fund has more than doubled to approximately US$40 million (S$53 million), said the company’s founder and managing general partner Andrew Ive.

The Temasek Holdings-backed firm launched its fund in March 2019 with a goal of closing US$50 million by March next year.

It invests in alternative protein companies that focus on cell- and plant-based foods and related technologies. In Singapore, it has invested in Gaia Foods, Karana, LVL Life, Confetti Fine Foods and Shiok Meats.

The alternative protein sector was already on an upward trend before Covid-19, said Mr Ive. “But we’ve seen a lot more investor interest since the pandemic,” he said. “A lot more people are getting involved in this space. They see why it’s important.

“It’s probably the most transformative change in the food industry in a hundred years.”

With the disruption of commodity supply chains, more spotlight has been placed on food security.“This has raised the growth potential for the alternative protein sector, as countries become more receptive to the development of novel foods to complement traditional food sources,” said Mr Johnny Teo, executive director for food, healthcare and biomedical at Enterprise Singapore.

On Wednesday (Dec 2), Singapore became the first country in the world to allow the sale of cultured meat — also sometimes referred to as cell-based or lab-grown meat.

Cultured meat is grown in a lab by isolating animal cells from a source and replicating them in a cell culture, making it a novel food that does not have a history of being consumed by humans.

Other than cell-based meat companies, plant-based food companies are also deepening their footprints in Singapore. Products from plant-based food companies Impossible Foods and Beyond Meat can be found in selected restaurants, and the former made its products available in supermarkets in October.

COVID-19 INCREASED INVESTOR INTEREST, VALIDATED NECESSITY OF TECHNOLOGIES

Homegrown alternative protein companies attested to the positive effects of Covid-19 on interest in the industry.

“It helps validate the necessity of our technologies,” said Mr Eugene Wang, co-founder and chief executive officer of Sophie’s Bionutrients, which uses microalgae to make plant-based protein. “Food security and supply chain disruptions were the key issues we were trying to address from the very beginning of the development of these technologies.”

Dr Vinayaka Srinivas, founder of cell-based red meat startup Gaia Foods, said that while some investors are conserving cash due to the uncertainty of Covid-19, many have realised that the industry is important.

“We are in a very sweet, lucky spot,” he said. “We are actually not aggressively going for investors, because we are still making sure we have everything ready from our side, but we are getting a lot of calls from investors.”

For jackfruit-based meat substitute startup Karana, the pandemic and news of its S$2.3 million funding round in July led to more investor interest as well.

Karana co-founder Dan Riegler said: “I think it would be much easier to talk about the number of people who are not actively interested in this space at this point.”

In June, cell-based seafood startup Shiok Meats bagged a S$4 million investment, and subsequently raised S$17.3 million in September.

STARTUPS FACED WORKPLACE RESTRICTIONS, SUPPLY CHAIN DISRUPTIONS

Shiok Meats’ investments were secured despite the difficulties of fundraising amid a pandemic. “It was hard as we could not meet many investors in person or they couldn’t visit our space,” said Dr Sandhya Sriram, co-founder and chief executive officer of Shiok Meats.

The pandemic also dealt other challenges to alternative protein companies.

Both Shiok Meats and Gaia Foods had to slow down research and development due to workplace restrictions, which prevented them from making full use of their labs.

The team from Karana could not travel to Sri Lanka, where it sources its jackfruit, and food manufacturers took more safety precautions, which led to delays of “at least a few months”.

“We’ve just been focused on managing everything that is in our control, and pushing things that we can as much as possible, but accepting that it’s a pretty unprecedented time,” said Mr Riegler. “We’ve just had to adapt as the situation warranted.”

Another challenge for the alternative protein industry is pricing, as most such companies are still small scale startups.

“It’s going to be hard to compete with a lot of existing products, especially the meat industry, on price,” said Mr Riegler, referring to plant-based products like Karana’s.

Dr Srinivas also said that it will take “some more years” for cell-based meat prices to go down.

Other obstacles to commercialisation include lack of widespread understanding about cell-based meat, he said. “That’s why we are also helping the Government to frame the regulatory framework so that they can understand and educate (the public),” he added.

Going forward, some local alternative protein companies are approaching the early stages of commercialisation in spite of challenges caused by Covid-19.

Karana, for instance, intends to launch its product with selected restaurants in January. Shiok Meats plans to use its latest investment to build a commercial pilot plant and launch its minced shrimp product in 2022.