Mermade is more than just another food tech startup with a laboratory-oriented process to manufacture an alternative protein. The Jerusalem-based company’s method of using algae to create scallops has set it apart and attracted significant early-stage investment.
The company has announced an oversubscribed $3.3M seed round as it showcases a circular cellular agriculture technology for producing cultivated scallops. In doing so, Mermade attacks two problems at once: bringing sustainable, good-tasting scallops to the public at a below current market price. Most cultured meat companies struggle with the economics of meeting or beating the cost of beef, chicken, or conventional seafood.
In an interview with The Spoon, company Co-Founder and CEO Daniel Einhorn explained the differences in his company’s business and technology approach. “We thought is why not pick some meat product that eliminates as much as possible of that food engineering challenge and just focus on those huge biological challenges,” Einhorn said. “Scallops, they have a fairly similar size, and each unit is a fairly similar size and shape. And texture taste is the same all throughout the cuts. Those are huge unfair advantages compared to our direct competition– other startups trying to replicate the more complex meat products.”
Mermade says it is the first company in the world to produce scallops using cellular agriculture. The company intends to develop a product and reach laboratory-scale production by 2023, reaching consumers and restaurants after that. Mermade will use the funds to employ more stem cell and algae researchers, accelerating the company towards this goal. The scallop is the first product the company will develop out of a diverse seafood portfolio that will gradually arrive on the market.
The use of algae to recycle the cells’ growth substrate is a clear distinction for Mermade. This cellular interpretation of traditional aquaponics was termed by the company Cytoponics, and the company has filed several patent applications related to this circular production method.
Related to the cost issue, Einhorn states, “It’s a big market segment and one that it has a very high price point, which is important because the main challenge right now is driving costs down. We’re trying to integrate all parts of our design into this prototype to bring cost even close to market parity.”
“In the next few years, consumers worldwide will be able to buy cultivated scallops (Coquilles Saint Jacques) made by Mermade in a supermarket or restaurant, at an affordable price and with the same quality and taste as the original food. Using Cytoponics as our production platform, we could also produce a variety of other cultivated seafood products such as calamari, shrimp, crab meat, and more.”
The company was founded in July 2021 by Daniel Einhorn (CEO), Dr. Rotem Kadir (CTO), and Dr. Tomer Halevy (COO). Investors in the seed round include the investment platform OurCrowd, Israel’s most active venture firm; Fall Line, an American VC fund specializing in AgTech; and prominent Dutch investor Sake Bosch.
Alternative seafood—both plant-based and cell-cultured—is a hot area. As The Spoon reported in April, Good Food Institue’s report, which looks at the entire alternative seafood category across plant-based, cell-cultured, and fermentation-based products, said 2021 investment brought the total invested in the category to $313 million from 2013 through 2021. Cultivated seafood startups commanded two-thirds of all investment in alt-seafood last year at $115 million, compared with $58 million invested in plant-based seafood startups and $2 million in fermentation-based seafood.
Among the companies active in this space are Wildtype, UPSIDE Foods, Gathered Foods, and Finless Foods. With all the activity in this forward-looking space, the United States—in the form of the USDA and FDA—has yet to give the green light for sales of these lab-grown alternative proteins. Only Singapore, Qatar, and to some degree, The Netherlands have given their stamp of approval.