While 2020 was a tumultuous year we’d all rather forget, it was actually a banner year for investment in alternative protein. According to new data released today by The Good Food Institute (GFI), there was $3.1 billion in disclosed investments in the alternative protein space in 2020. That figure is more than three times the amount raised by the sector in 2019.
GFI used PitchBook‘s data, and includes investments in startups working on plant-based meat, egg and dairy; cell-cultured meat; and fermented protein. Alternative protein is relatively new in the food-tech world, and investment in the space is definitely a steep hockey stick shape. The $3.1 billion raised in 2020 is more than half of the $6 billion alt protein companies raised between 2010 and 2020.
GFI broke down the data further, finding:
- Plant-based meat, egg and dairy companies received $2.1 billion in investments in 2020, up from $667 million raised in 2019. The $2.1 billion in 2020 included the $700 million figure Impossible Foods raised, as well as LIVEKINDLY‘s $335 million in VC financing and Oatly‘s $200 million private equity financing.
- Cultivated (a.k.a. cell-based) protein companies raised more than $360 million in 2020. This included the sector’s first two Series B rounds: Memphis Meat‘s $186 million raise and Mosa Meat‘s $75 million. GFI also included cell-based dairy companies such as Turtle Tree Labs and BIOMILQ.
- Fermentation, the third pillar of alternative protein, pulled in $590 million in funding in 2020. This included Perfect Day‘s $300 million raise and Nature’s Fynd‘s $45 million debt round.
That the alt protein space was able to raise so much money in 2020 isn’t that surprising. First, there are just a ton of startups working in the space, so there is more opportunity for investment. And in areas like cultivated and fermented protein in particular, that technology is maturing, achieving more yield at lower costs.
GFI also noted that larger, existential factors helped drive investment in alternative protein. The pandemic highlighted issues with zoonotic disease transmission as well as ethical complications surrounding the production of animal-based meat. These pandemic-related issues along with problems with the animal meat supply chain helped drive a surge in plant-based food sales in 2020.
While 2020’s investment figures were impressive, I’m actually curious how this year will turn out. As we noted in our Future Food newsletter this week, there has been a raft of investment just in the cultured meat space since January. Will 2021 be another record breaking year for the alt protein space? Check back in next March to find out.