Memphis Meats raises $161m to build its cell-based meat platform: 'We have a pretty clear path to bringing prices down to cost parity'

The Series B round – led by SoftBank Group, Norwest and Temasek and supported by Richard Branson, Bill Gates, Threshold Ventures, Cargill, Tyson Foods, Finistere, Future Ventures, Kimbal Musk, Fifty Years, CPT Capital, KBW Ventures and Vulcan Capital – “will enable Memphis Meats to reach a historic milestone of bringing its products to consumers​,” said the Berkeley-based firm.

It also opens doors in Asia, “a strategically valuable market for cell-based meat,”​ added the company, which has now raised more than $180m since its launch in 2015.

“This​ signifies our shift from a company focused on research to a company focused on bringing products to consumers​,” David Kay, senior manager of communications and operations told FoodNavigator-USA.

'The pilot plant will be animal agnostic'

Memphis Meats has not announced a date for product launch, but will likely begin with premium-priced products in restaurants, which are great places to engage in meaningful conversations with chefs and consumers and get useful feedback, said Steve Myrick, VP of Operations.

"We have been very careful to develop our production system so we can produce multiple types of meat from multiple species on the same equipment, so the pilot plant will be animal agnostic. It may produce chicken in one run and beef the next. As to what comes to market first, it's still an open question for us. We've prototyped beef, chicken and duck, and we've worked on other things we haven't announced."​

The products will likely launch in the foodservice market at a price premium, but not an 'extreme' one

Asked about the price tag for the first wave of products, he said: "We believe we have a pretty clear path to bringing prices down to essentially conventional cost parity, and that will definitely take some time and some very meaningful scale above and beyond what we will be able to do in the pilot plant.​

"That said, we don't intend to wait until we are price parity before we bring anything to consumers, because we think it is very important to have product out in the world and start collecting feedback and start educating consumers about what this is and why they should care about it. We believe we have a pretty clear path to bringing prices down to essentially conventional cost parity ​​[with meat from slaughtered animals].

"I think we will bring products to market initially at prices that are at a premium to many other meat producers but hopefully not a very extreme one."​

As for consumer sentiment around cell-based meat, survey findings can vary widely depending on how questions are phrased, but he added: "Most of the research has shown two thirds of consumers with a willingness to try or buy and we think that's a really attractive baseline number​ [given that research also shows enthusiam tends to increase the more educated consumers are on this topic]."

Intellectual property: Patents and trade secrets

As to what investors were looking for in this round, Myrick said they were focused on Memphis Meats' ability to prove its production system was scalable and capable of producing a consistent product, coupled with proof that costs were coming down in a meaningful way.

"We really showed that we had a clear path as we increased scale to bringing costs down to something that consumers will be able to afford."​

When it comes to intellectual property, he said, "We think that we've done innovative work across three separate areas of our production system: the cells themselves, the cell culture feed or media, and the production system - the hardware in which we're producing meat, and across all three of those there is potential to protect our work through both patents and trade secrets."​

Cell lines, growth media, scale up

Most cell-based meat startups have developed prototypes at the lab-scale, but when it comes to commercial viability, they need cell lines that can replicate/proliferate extensively or even indefinitely (without having to keep going back to the original source) and differentiate into multiple cells types such as muscle, fat and connective tissue. They also need a production process that enables these cells to grow rapidly, and an affordable growth medium that doesn’t utilize fetal bovine serum (FBS), a byproduct of the livestock industry.

Myrick would not provide details on how Memphis Meats has brought down the cost of FBS-free growth media, but added: "We've explored a number of strategies for understanding what FBS does in our process and then replacing some of the key components of that with components that are detached from slaughter."​

Asked about the production process, VP of product and regulation Eric Schulze said the initial cell proliferation phase and the next differentiation phase could be conducted in the same vessel or in separate vessels, although the company is not providing details of its chosen approach at this stage.

Similarly, the different cell types (fat, muscle, connective tissue etc) can be grown separately and then combined at the processing stage at the end, or they can be grown together, he said. "We've explored both​ [approaches] and we use both regularly in our processes."​

All of our cells have the ability to self-renew

Quizzed on whether the company was using edible or biodegradable scaffolds upon which to seed cells in order to create more structured or 'steak-like' products, he said: "The cells themselves produce a scaffold and we primarily rely on the cells to do that but we continue to explore all options on the table."​

Asked whether the company was using induced pluripotent stem cells (which behave like embryonic stem cells in that they can replicate/proliferate extensively without having to keep going back to the original source and differentiate into multiple cells types), he said: "All of our cells have the ability to self-renew and they are derived from muscle, fat, and connective tissue."​

The regulatory framework

Asked about the regulatory framework for cell-based meat in the US, Schulze said Memphis Meats was working closely with the FDA and USDA, which have set up three working groups looking at safety, inspections and labeling (read more about this HERE​​).

The US government was moving "efficiently behind the scenes and publicly as well," ​he said.

As for terminology, in an ideal scenario, stakeholders will settle upon a term that can be used by regulators and consumers, said Schulze, who favors the 'factual and descriptive,' but also 'neutral' term 'cell-based meat' over other options such as 'cultivated' meat. 

*Prior to this, the largest deal closed for the industry was BlueNalu's $20m Series A in September 2019. Future Meat Technologies had a $14m Series A in October 2019 and Memphis Meats had a $17m Series A in August 2017.

GFI: ‘This is a monumental milestone in the progress of the field’​

An investment of this magnitude – if it is followed by a “commercially available product at a reasonable price point” –​sends a signal to the market that cell-cultured meat “is here today rather than some far-off future endeavor,” ​predicted Bruce Friedrich at the Good Food Institute, which promotes cell-cultured and plant-based meat.

“This investment round is a monumental milestone in the progress of the field. This is the biggest investment of its kind for cultivated meat and will help Memphis Meats move toward the scale they will need to get their products to market​.”

But he added: “This is still an industry that has sprung up almost overnight and it’s important to keep a sense of perspective here. While the idea of cultivated meat has been percolating for close to a century, the very first prototype was only produced six years ago.​

“Continued resources will be needed for years to come… While private investments in cultivated meat are essential, they need to be supported by public funding in order to sustain the industry moving forward.”​