Israeli start-up Aleph Farms has successfully raised $29 million in funding aimed at advancing its production capabilities for whole-cut cultivated steak.
This financing round, which includes $22 million raised through a SAFE (Simple Agreement for Future Equity) and an additional $7 million from existing investors, positions Aleph Farms to enhance its operational efficiency and reduce costs in a challenging market environment.
Aleph Farms plans to use the newly acquired capital to expand its pilot facility in Rehovot, Israel, and establish intermediate-scale production sites in Europe and Asia.
Co-founder and CEO Didier Toubia noted the importance of this funding in scaling the company’s operations, telling AgFunderNews: “The funding will be used to scale up our pilot facility and launch the first Aleph Cut through an optimised production process designed for profitability”.
As the cultivated meat industry faces a contraction in funding, Toubia noted that the adjustments in fundraising terms reflect current market conditions, offering a potential entry point for new investors. “Aleph Farms has successfully overcome major challenges associated with cultivated meat, including regulation, product-market fit, profitability and scalability,” he added.
Aleph Farms has made significant strides in reducing production costs, reporting a 97% decrease since 2020. The company aims to achieve production costs of $14 per pound at a medium scale and between $6 to $7 per pound at larger scales. This reduction is facilitated by modifications to its biomanufacturing process, which now allows for the production of thicker steaks without the need for a secondary tissue bioreactor.
The new '1.2' production method eliminates the second step in the cell differentiation process, allowing for a streamlined operation that combines cell proliferation and differentiation in a single bioreactor. This innovative approach not only enhances efficiency but also preserves the nutritional and sensory qualities of the final product.
Aleph Farms has recently secured regulatory approval to launch its cultivated beef products in Israel, although it must amend its submission to accommodate its revised production process. The company is also pursuing regulatory approvals in Switzerland, the UK and Thailand, with plans to launch in Israel within the next six months.
Looking ahead, Aleph Farms intends to produce for the domestic market from its pilot facility while scaling up operations in Europe and Asia. Toubia indicated that collaborations with local partners would facilitate this expansion, aiming for breakeven and profitability through a strategically asset-light approach.
The cultivated meat sector is currently navigating a turbulent landscape, with private funding experiencing a notable decline in 2024. According to AgFunder data, investments in cultivated meat startups plummeted from a peak of $989 million in 2021 to just $177 million in 2023, raising concerns about the long-term viability of many players in the space. Political opposition in certain US states further complicates the regulatory environment, with some regions moving to restrict the sale of cultivated meat products.
