European plant-based, fermentation-derived, and cell-cultivated meat and dairy companies secured €289 million in investments during the first half of 2024, according to an analysis of Net Zero Insights data by the Good Food Institute Europe.
Notably, companies producing fermentation-derived products raised €164 million — thus surpassing for the first time plant-based, which secured €79 million — including raises in the field of precision fermentation totalling €49 million.
In the same period, European investments in cultivated meat reached €45 million, just under half of the total EUR 106 million invested in this sector throughout 2023. Notably, a significant portion of these funds was allocated to scaling up production, with Dutch company Mosa Meat raising €40 million.
The German PHW Group, a long-time investor in alternative proteins, was instrumental in Mosa Meat’s financing round. Additional investments included €3 million for Rostock-based Innocent Meat, which is developing comprehensive solutions for meat cultivation, and €2.3 million for Cultimate Foods, a producer of cultured fat intended for hybrid products.
€79 million for plant-based sector
In the plant-based food sector, European companies attracted investments totalling €79 million euros in the first months of 2024, essentially attributable to Oatly’s raise of €393 million from two deals in 2023. Although the plant-based sector is not currently witnessing the huge funding rounds that were seen a few years ago during the hype period, stand-out companies are still securing large amounts. Heura raised €40 million, and THIS received €25 million, for example.
Important to note in this context is that investment activity declined across all sectors in 2023, with financial uncertainty and increased inflation leading to a 38% decline in global startup funding across all sectors over the past year. Taking place after the hype phase is a correction phase with consolidation across the board involving a rise in mergers and acquisitions.
A January report from law firm Browne Jacobson predicted further consolidation to take place throughout 2024 as the correction continues. Furthermore, a May report by ProVeg Incubator projected that this will ultimately strengthen the sector‘s long-term prospects. The paper states that the correction phase reflects a healthy recalibration and there is reason to have high hopes for the future. “The next wave will lead the way, and further accelerate the transformation and growth of the industry,” stated ProVeg.
Public investment is needed
The overall picture is that private investment is not enough to develop the alternative protein sector quickly enough to realise its economic and environmental potential, and that public investment in the sector is also needed. More public investment will enable companies to produce their products faster on an industrial scale and reduce prices so that they are affordable and available to all. In addition, product characteristics can be specifically improved in terms of added health value, a short list of ingredients and a regional value chain.
Ivo Rzegotta, Senior Public Affairs Manager at GFI Europe, comments: “More public funding is needed to further improve flavour, texture and other product properties and to reduce production costs so that these sustainable foods are on a par with their animal-based counterparts in terms of price.”
