According to an article out today from Food Navigator USA, plant-based meat ingredient startup Motif Foodworks has laid off an undisclosed number of employees.
The layoffs, which are the first for the company, are part of a broader restructuring that will “maximize ROI for our customers and investors.” According to company CEO Jonathan McIntyre, the slimmed-down company will prioritize those ingredients and finished products where the company is “experiencing strong demand.”
Motif, which has been developing ingredients such as a plant-based heme and technology to give plant-based cheese the same stretch and melting properties of animal-based cheese products, has raised $345 million in funding over the past few years, including a $226 million round 12 months ago. That funding, which came at a time when lots of alternative protein startups had access to lots of cheap capital, was spent on everything from an expansive new headquarters to new headcount as the company looked to become what is essentially an “Intel-inside” provider of future food building blocks for a new generation of alt-protein startups.
Now, however, Motif is facing increasing headwinds in the form of a legal battle and overall sluggishness in parts of the plant-based meat sector. These headwinds come at the same time venture capital’s easy-money era appears to be coming to an end, making it doubly-hard for a company with product development cycles as long as Motif’s. With fresh rounds of funding that would extend the company’s runway now drying up, Motif has no choice but to prioritize revenue-producing product lines such as its consumer-facing brands and ready-for-market ingredient products.
It’s probably too soon to tell if Motif’s problems are endemic to a company that spent relatively freely during a time of plentiful venture capital or if it’s a sign of things to come in a broader industry shakeout. Paleo, another company creating alt-meat building blocks similar to those at Motif, just announced its new product line and is raising a Series A to scale its product line. Other plant-based startups like Tender and Nowadays have been able to raise money in recent months, showing that there is still some appetite among investors for the sector.
Either way, we’ll be keeping a close eye on the company and some of its peers to see if this new era of venture capital austerity forces additional changes to business models to accelerate the road to profitability.