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Discovering the power of alternative proteins

Exploring the expected growth of a transformative market

Alternative proteins are plant-based and food-technology alternatives to animal protein. These innovative foods are designed to taste the same or better than conventional animal products while providing the same amount of protein. They include food products made from plants (grains, legumes and nuts), fungus (mushrooms), insects and cultivated (lab-grown) meat.

When comparing alternative proteins (which includes plant-based meat, eggs, dairy, and seafood products) to conventionally produced proteins, several notable advantages emerge. Alternative proteins require fewer resources like land and water, while also producing significantly fewer adverse effects on the environment, such as greenhouse gas emissions and pollution. Some of these products are available to consumers today, including numerous plant-based and fermentation-derived options, while cultivated meats remain in development.

Even though the total investment in alternative protein experienced a decline in 2022, certain regions witnessed significant growth as investors diversified their investment portfolios. In the Asia-Pacific (APAC) region, companies observed a remarkable 43% increase in funding compared to the previous year, reaching a total of $562M USD. Similarly, Europe experienced a substantial 24% YoY growth in investments, amounting to $622M USD in 2022.

The latest funding rounds raised by alternative protein startups based in the United States are concentrated in the Seed stage with investments ranging from $25,000 to $6M USD, followed by startups in Series A with investments ranging from $5M to $28M USD. Globally in Q1 2023, there have been 52 deals with a Deal Value of $431.8M USD.

Lab-grown meat startups have raised $416M USD across 18 deals globally this year as of June 23, compared to more than $1B USD in the first half of 2022.

“While some alternative protein companies have experienced challenges, others are succeeding in this competitive environment. Distribution has picked up for fermentation-enabled proteins – a number of companies launched products for the first time in 2022. UPSIDE Foods earned a green light from the FDA for its cultivated chicken, a de-risking event that could impact future investment activity in cultivated meat.“ Good Food Institute

Even with the funding slowdown, NotCo, a Chilean maker of plant-based meat products raised $70M in the end of 2022. NotCo uses technology to recreate and produce plant-based meat and dairy substitutes. They use artificial intelligence to make plant-based food that functions and animal-based tastes.

Currently, it is partnered with various chains such as Shake Shack, Kraft Heinz, and Starbucks, to name a few, with investors including KASZEK, Tiger Global, Bezos Expeditions, L Catterton, and angel investor Marcos Galperin (MercadoLibre) in this latest round.

Numerous large food companies have introduced plant-based variants of their food products and at the same time, many of the startups are doing so to help improve the Earth’s climate and change the dependency on animal-based foods along with consumer driven trends on healthier and alternative diets.

However, despite the widespread claim of prioritizing sustainability, a significant gap exists between consumer attitudes and actions, with only a small portion of consumers making sustainable food purchasing decisions (20%)

“Alternative proteins are a key part of our investment thesis, both in companies that aim to create alternative proteins and in companies that are using these ingredients in their products. At Santatera we recognize that there is a significant need in the market and, despite the challenges faced and those yet to come, we are confident that this is a category that will revolutionize the food industry and its impact on the environment.”
Mauricio Mendoza, Investment Analyst in Santatera Capital

The potential for alternative proteins to improve sustainability and meet consumer needs remains strong, making it an important area of development for a more sustainable food system. The growing awareness and demand for environmentally friendly products provide a favorable landscape for alternative protein startups. As investor interest and consumer awareness continue to rise, the alternative protein sector holds tremendous promise for a more sustainable and ethical food system.


Good Food Institute



Boston Consulting Group



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