Aleph Farms, an Israeli pioneer in cell-based beef production, has announced a drastic reduction in its valuation by 73% as it embarks on an emergency funding round to secure its financial future. The news was first reported by tech platform Calcalist.

The company aims to raise $25 million but is currently projected to secure only $10 million, underscoring the growing financial pressures faced by food technology firms.

Aleph Farms, founded in 2017, has raised over $140 million to date, with its last funding round in 2021 valuing the company at approximately $300 million. However, recent reports indicate that the firm is now seeking a valuation between $80 million and $100 million, a stark reflection of the changing landscape in the alternative protein market.

This adjustment comes as Millennium Food-Tech, a shareholder, slashed its stake in the company by 75%, citing insufficient cash reserves to sustain operations through the upcoming year.

The cultivated meat industry has seen a considerable decline in investment, with global funding for such start-ups plummeting from $1.3 billion in 2021 to just $137 million last year. Factors contributing to this downturn include inflationary pressures stemming from geopolitical tensions and a pervasive misinformation campaign from traditional meat industries.

In light of these challenges, Aleph Farms is pivoting its strategy to focus on three core priorities: optimising production processes, commercialising its initial product and achieving profitability. The company has already implemented significant cost-cutting measures, including a 30% reduction in its workforce last summer, as part of an 'asset-light' operational strategy.

Despite these setbacks, Aleph Farms remains committed to advancing its technology and expanding its market presence. The company recently received approval from the Israeli Ministry of Health to market its cultivated beef steak, a product that it plans to launch in collaboration with renowned chef Eyal Shani. Additionally, regulatory approvals are being pursued in several international markets, including Singapore, the UK and Switzerland.

Aleph Farms has made strides in reducing production costs by 97% compared to 2022 and has signed commercial agreements with major global food corporations. However, the road to widespread commercialisation remains fraught with challenges, as the company must navigate regulatory landscapes and consumer acceptance.