In the competitive landscape of the foodtech industry, the recent developments at Finless Foods, a pioneer in the cultivated seafood sector, have raised eyebrows and concerns alike. The Emeryville-based startup, known for its innovative approach to seafood production, appears to be facing a significant hurdle as a wave of employee departures suggests a new round of layoffs.
The signs of trouble became evident when multiple employees of Finless Foods took to LinkedIn, adding the ‘opentowork’ banner to their profiles and sharing posts seeking new opportunities. This online activity, coupled with the company’s silence in response to media inquiries, paints a picture of an organization grappling with internal challenges amid a tough funding climate.
The decision to part ways with its lobby firm in Washington DC, Esp Advisors, LLC, further underscores the financial strain Finless Foods may be experiencing. This move comes at a time when the company should be ramping up efforts to navigate the regulatory landscape, essential for bringing its cell-cultured seafood products to market.
Founded in 2017 by Mike Selden and Brian Wyrwas, Finless Foods has been a frontrunner in the cell-cultured seafood space, raising a total of $48 million to date. Its last significant financial injection was a $34 million series B round in March 2022, led by Hanwha Solutions. These funds were earmarked for pilot-scale production of cell-cultured Bluefin tuna and the launch of a plant-based tuna product, intended to generate revenue while awaiting regulatory green lights for its more innovative offerings.
However, despite these efforts, a foodtech investor revealed to AgFunderNews that Finless Foods has been struggling to raise capital for some time and has not kept pace with some of its competitors in the field. This sentiment echoes the concerns voiced by Finless Foods’ co-founder Mike Selden at last year’s Future Food-Tech summit, where he admitted that the funding environment for cultivated meat and seafood was increasingly challenging, with venture capital seemingly hesitant to back the bold ventures required to shape the market’s future.
The broader funding environment for cultivated meat startups is indeed facing a crunch. Ryan Bethencourt of Sustainable Food Ventures predicted a potential “bloodbath” in the industry, with an estimated 70-90% of companies possibly failing in the next year. While this may seem dire, it’s worth noting that the cultivated meat industry is still in its infancy, competing against a mature and heavily subsidized animal agriculture industry.
Despite the challenges, there are glimmers of hope. Laura Turner from Agronomics believes the funding environment will eventually improve, though it may take another 18 months or so. She emphasizes the need for success stories to draw generalist capital back into the space. Similarly, Andrew Ive of Big Idea Ventures remains optimistic, highlighting the interest from governments worldwide in alternative proteins as a pillar of future food security.
As Finless Foods seemingly enters a period of contraction, the industry watches closely. The situation at Finless Foods serves as a bellwether for the cultivated meat sector, which is at a critical juncture. While skeptics point out the difficulties of scaling such innovative technologies, proponents argue that transformational change often faces resistance and skepticism. What’s clear is that the road ahead for Finless Foods, and indeed for the entire cultivated meat industry, is fraught with challenges—but also filled with potential. Only time will tell which companies will emerge as the architects of a new era in sustainable food production.