Cultivated Meat Pioneer SCiFi Foods Closes Amid Funding Crunch

San Leandro-based cultivated meat startup SCiFi Foods has officially shuttered its operations, as confirmed by AgFunderNews. The company’s cofounder and CEO, Joshua March, cited difficulties in the current fundraising environment as the primary reason for the closure. “Given challenges in the fundraising market, we’ve appointed an advisory firm to run a sale process,” March stated. “Given the nature of the process, I can’t really say much more beyond this.”

Founded in 2019 under the name Artemys Foods by March and Dr. Jessica Krieger, who departed the following year, SCiFi Foods rebranded in 2022. Dr. Kasia Gora joined as cofounder and CTO in 2020. The startup had made significant strides in the cultivated meat industry, notably opening a pilot plant late last year that grew beef cell lines in serum-free media in a 500-liter bioreactor, an achievement the company claimed as an industry first.

Despite raising approximately $40 million from high-profile investors such as British rock band Coldplay, Andreessen Horowitz, Valor Siren Ventures, BoxGroup, Entree Capital, and Prelude Ventures, SCiFi Foods could not sustain its operations. This development comes amid a broader downturn in the cultivated meat sector, which has seen multiple companies struggle.

The past 18 months have been particularly harsh for the industry. Finless Foods implemented significant cutbacks to conserve cash, New Age Eats ceased operations after exhausting its funds, and GOOD Meat faced a lawsuit from its bioreactor supplier over allegedly unpaid bills. Omeat has also been operating with a skeleton crew following a turbulent period that saw its founder step down as CEO.

AgFunder data reveal a stark decline in funding for cultivated meat startups. After peaking at $989 million in 2021, funding dipped slightly to $807 million in 2022, bolstered by a $400 million round into UPSIDE Foods. However, 2023 has seen a dramatic 78% drop in funding to $177 million, against a backdrop of a 50% decline in overall agrifoodtech investing last year.

Despite the challenging environment, some companies have managed to secure funding. UK-based Uncommon, formerly known as Higher Steaks, raised a $30 million series A round led by Balderton Capital and Lowercarbon Capital to scale production of cultivated pork. Meatable, a Dutch startup, raised $35 million in its series B round last year, while BlueNalu, a cultivated seafood startup, netted $33.5 million to scale up production at its pilot facility in San Diego.

In a panel discussion on investing in cultivated meat at the cell ag innovation day at Tufts University in January, Harris Komishane, general partner at agrifoodtech investor Meach Cove Capital, noted the unfavorable funding environment for cellular agriculture. “The IPO market has been locked up and there’s just a general risk aversion amongst companies, among VCs, to invest money,” he said. “The good news is that these are largely cyclical issues. But at the sector level, there are other issues. There is a proliferation of companies doing the same or similar things, and many of these companies probably would not have gotten funded if funding wasn’t so available when interest rates were near zero.”

Komishane also highlighted challenges related to scalability and achieving cost parity, which have taken longer than the venture capital world anticipated. “There’s also an underdeveloped ecosystem, so a lot of the earliest startups in this space had to basically do everything soup to nuts because there was nobody to outsource things to,” he added.

The closure of SCiFi Foods underscores the precarious state of the cultivated meat industry, as companies navigate financial constraints, scalability issues, and a competitive landscape. As the sector undergoes a significant shakeout, only time will tell which players will emerge resilient and capable of bringing cultivated meat to the mainstream market.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top