Venture Capitalists Continue Funding Alternative Protein Startups

Macronutrients rarely experience popularity contests, but if they did, protein would undoubtedly claim the crown for this generation.

From sodas and snack bars to pasta, food and beverage producers now routinely emphasize protein content whenever possible. Even as consumers occasionally restrict carbohydrates or worry about dietary fats, the appetite for protein remains strong.

New companies and their financial backers have capitalized on this shift. Over the past ten years, investors have committed billions of dollars to emerging ventures offering more affordable, flavorful, and sustainable approaches to hitting daily protein goals.

Regrettably, many of those initial wagers have performed poorly. Substantial capital directed toward lab-grown meat several years back, for instance, has yet to yield a genuine success story. Prominent early plant-based meat enterprises like Beyond (which is now publicly traded) and Impossible Foods have watched their valuations shrink, while others have gone out of business.

Consequently, newer startup investments have pivoted away from meat substitutes and toward adding extra protein into conventional packaged foods and beverages. This trend is clearly visible on grocery store shelves, where both startups and established labels heavily promote the extra protein packed into their noodles, pancakes, cereals, energy bars, and popcorn.

Deal flow looks robust

Within the startup ecosystem, protein-focused funding appears modest when measured against the billions funneled into artificial intelligence. Nevertheless, deal flow stays quite healthy, with Crunchbase tracking several dozen protein-centric startups that secured financing over the past year. Furthermore, some of these funding rounds are quite large, highlighted by a $250 million Series B in September for Medici Brands, the creator of David Protein snack bars.

To demonstrate this activity, Crunchbase data was used to compile sample categories of recently funded, protein-oriented businesses across various sectors, encompassing packaged foods, beverages, ingredients and processes, alongside animal feed.

Protein snacks and packaged foods

Snacks and packaged goods emerge as the top fundraisers among protein startups, pulling in hundreds of millions of dollars over the last year.

To highlight some active participants, a selection of seven recently funded brands making their way into retail stores was assembled.

The lion’s share of recent capital went to the aforementioned maker of David Protein. Alongside producing sweet-flavored snack bars boasting a protein level comparable to cod, the brand has been branching out into ice cream and milkshakes.

Wilde Brands, known for manufacturing crackers out of chicken breasts, has likewise attracted investor interest by securing $40 million just last month. Meanwhile, in the early-stage category, Frozen One has experienced a fast start, raising upwards of $8 million for a high-protein ice cream line now available at Target.

Protein drinks

Startups and investors are also serving consumers seeking high-protein diets in liquid formats, as shown by six recently funded examples outlined below.

Ripple Foods, a producer of pea-protein vegan milk, stands as the largest historical funding recipient, having brought in over $300 million throughout its 12-year existence, despite not yet achieving unicorn status.

Clear protein beverages are gaining traction as well, with multiple startups entering the space, including protein soda brand Juuz and sports drink creator Protein2o.

Precision fermentation and plant protein ingredients

A significant number of financed startups concentrate on novel, protein-packed ingredients instead of launching their own consumer retail lines. Frequently, they utilize precision fermentation to achieve this.

Seven examples are detailed below.

The Every Co., which produces animal-free egg white proteins via fermentation, represents the highest-funded and one of the more mature entities on the list. It has accumulated nearly $300 million over the past decade, which includes a $55 million round secured a year ago.

The early stage also features activity from companies like Edonia, which formulates a high-protein culinary ingredient derived from spirulina.

Animal feed and pet food

Several financed protein enterprises are directing their efforts toward pets and livestock—markets that are not quite as saturated with supermarket options.

Five such organizations that secured capital in recent quarters have been grouped together.

Significantly, two of them—InnovaFeed and nextProtein—utilize insects. InnovaFeed has raised more than $500 million to breed bugs intended for livestock feed, pet food, and aquaculture, while nextProtein relies on fly larvae for feedstock.

Other entities target companion animals. For example, Meatly secured a Series A round this spring to construct what it describes as Europe’s largest cultivated meat facility, with plans to collaborate with pet food brands and market its own branded products once production scales up.

Broad focus: Protein, not meat

Summarizing the overarching pattern across most protein-related investments, startups are generally not attempting to persuade consumers that vegetables taste like meat. Instead, they concentrate primarily on protein as a sought-after macronutrient that can be heavily concentrated and incorporated into a wide variety of flavors and product formats.

While these options may not always match the taste of sugary, high-fat, and carb-heavy alternatives, they at least deliver protein.

Related Crunchbase lists:

• Animal Feed And Pet Food Protein Startups
• Startups Focused On Plant Protein Ingredients And Technologies
• Protein Beverage Startups

Illustration: Dom Guzman

Frequently Asked Questions

• Why are investors shifting focus away from lab-grown meat? Earlier investments in lab-grown meat and plant-based startups like Beyond and Impossible Foods largely failed to produce lasting commercial success stories, leading to declining valuations and closures.
• What type of protein startups are currently raising the most money? Snacks and packaged foods have emerged as the largest fundraisers among protein startups, securing hundreds of millions of dollars in the past year.
• How are companies creating animal-free proteins? Many startups are utilizing precision fermentation to produce novel protein-rich ingredients, such as animal-free egg white proteins.
• Are there protein startups focusing on animal and pet nutrition? Yes, several companies are targeting livestock and pets, including insect-based feed producers like InnovaFeed and nextProtein, as well as cultivated meat facilities for pet food like Meatly.
• What is the overall trend in protein-focused investments? Rather than trying to make vegetables taste like meat, startups are focusing on protein as an in-demand macronutrient to add into a wide variety of packaged foods and drinks.