Despite challenging market conditions, alternative protein startups received over $2.9 billion in investment dollars in 2022, according to PitchBook data. This overall figure represents significant investment growth in some regions as investors diversified their holdings, with some nations receiving significantly more investment dollars than in previous years.
While startups in the US received the most investments, Israel received the second highest volume of investment dollars – a total of 15% of the global capital raised for the sector worldwide. Startups in the nation received $454 million in alternative protein investments, with over 50% of investments in food tech nationally directed towards this category.
These investment figures reflect the progress made by innovative startups nationwide, including SuperMeat, an SDC portfolio company, which opened the first restaurant focused on cultivated meat products; “The Chicken.” As well as SDC portfolio company Aleph Farms’ which recently received a ruling of kosher for their cultivated beef steak products by the Israeli Chief Rabbi – Aleph Farms was the startup is the first alternative protein company whose products have received a ruling of this kind.
Following Israel, France received $184 million in investments. The highest number of alternative protein investment dollars out of any nation in Europe, the continent as a whole received $622 million in capital, a 24% year-on-year growth from 2021.
Further South, the APAC region overall saw a 43% year-on-year increase in funding growth to reach $562 million in 2022. While Singapore, which is rapidly emerging as an innovation hub in the industry, received $170 million in private capital for alternative protein startups.
Investment growth in the APAC region reflects significant development in the status of the category, including a first-of-its-kind MOU signed by key industry stakeholders at the Singapore International Agri-Food Week. The Memorandum decreed the preferred term for products produced through cellular agriculture to be “cultivated,” and was intended as a framework for startups regionally to achieve synergy to develop recognition for the category.
APAC Managing Director of the Good Food Institute, Mirte Gosker, said of the agreement “The location of this historic announcement was no coincidence. In recent years, Singapore has invested the necessary resources to make the city-state a welcoming ecosystem for food innovation and multilateral collaboration. This MOU is the latest proof that the Lion City is trading its traditional reliance on food imports for a new role as the place where the alternative protein sector’s biggest decisions are forged, announced, and exported to the world.”
Despite these regional developments, overall funding for the alternative protein industry was down year-on-year. Exacerbated by inflation, acute climate events, the ongoing pandemic and the invasion of Ukraine, deflated funding levels are being seen in nearly every industry.
Though founders need not despair, there is a generally positive sentiment surrounding the alternative protein industry among consumers and stakeholders. While raising in the current market may prove difficult, this time is an opportunity for startups to hyperfocus on product quality, allowing them to seek more favourable valuations and deal terms when the market corrects.