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Promising Foodtech Innovations Emerge Despite Falling Investment

Is the future of food is here? Recent months have seen exciting developments in the foodtech industry that are changing the way we think about meat.

In a landmark moment, the US Department of Agriculture approved the first companies, California's Upside Foods and Good Meat, to sell lab-grown meat to consumers. This approval signals the growing acceptance of cultivated meat as an alternative to traditional livestock agriculture.

And it's not just beef, chicken, and pork being grown in labs. Australian startup Vow recently revealed a "woolly mammoth meatball" made using ancestral DNA. While not for eating, Vow is exploring cultured meats from unconventional animals like kangaroos.

Despite this progress, investor appetite for foodtech remains tepid. VC funding in the sector is at its lowest level since 2017, even as pioneers like Upside Foods and Vow push boundaries with lab-grown prime cuts and prehistoric snacks.

The future of food is taking shape in labs and test kitchens. While challenges remain, recent progress shows that science-grown meat will soon be a reality for forward-thinking foodies.

The Future of Protein Goes Beyond Meat

The alternative protein sector is expanding beyond plant-based meat substitutes. PitchBook identifies four key areas driving innovation:

  1. Cultivated Meat - Meat grown directly from animal cells, reducing the need for livestock. Companies like Upside Foods are growing real chicken and beef in labs.

  2. Fermented Proteins - Animal-free proteins manufactured through fermentation, like those made by The EVERY Company. Can be used to enhance plant-based and cultivated products.

  3. Plant-Based Meat - Vegetarian products that mimic the taste and texture of meat, like Impossible Burger.

  4. Edible Insects - Sustainable high-protein foods made from crickets, mealworms and other insects.

Investment is pouring into these futuristic proteins that promise to disrupt traditional agriculture. While plant-based meat leads today, next-gen solutions like cultivated meat and fermentation are gaining steam.

Foodtech Funding Dips as Investors Seek Larger, Safer Bets

Investment in foodtech startups cooled in the first quarter of 2023, but deal sizes swelled for less risky ventures.

PitchBook data shows 197 foodtech deals worth $2.3 billion closed in Q1, down 40% in deal count and 18% in value versus Q4 2022. However, median deal size spiked 87.5% to $6 million.

Notable Q1 deals reflect this trend. Meal replacement maker YFood scored a $230 million late-stage round, while online grocer Nana raised $133 million in a Series C.

Despite the quarterly decline, foodtech funding remains robust historically. Investors are still hungry for innovations like alternative proteins and supply chain upgrades. But in the current climate they are seeking companies with scale and momentum.

The foodtech sector continues to cook up new ideas. But investors are now demanding proof these startups can deliver before serving up more funding.

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