Sovereign wealth funds' appetite for alt-meat

Newly foaled unicorn Upside Foods gets funding from SWFs such as Temasek and Abu Dhabi Growth Fund as their focus on sustainability grows

The world’s biggest sovereign wealth funds (SWFs) are increasingly investing in the alt-meat sector as their focus on sustainable investments grows. In mid-April, two SWFs – Singapore’s Temasek and the UAE’s Abu Dhabi Growth Fund – led the $400mn series C funding round for Upside Foods, a Berkeley-based artificial meat producer. Temasek, a returning investor, and Abu Dhabi co-led a group of fifteen that included both previous and new investors. 

Upside says the funding it received will help the company scale its operations as it moves towards store shelves. It currently doesn’t yet have any products on shelves but expects to be on US menus by the end of 2022.

The popularity of alt-meat, which includes plant-based brands like Impossible Foods and Beyond Meat, reflects the enormous growth potential in the industry. Upside’s valuation rose above the $1bn unicorn mark following its latest deal as the company works toward marketing its lab-cultivated chicken products. The deal was the sixth funding round since the company was founded in 2015 as Memphis Meats, Preqin’s Company Intelligence data shows. Upside says it’s the world’s first artificial meat company, and according to its website, it produced the world’s first lab-cultivated beef meatball. 

Upside’s previous funding rounds included food-industry giants Tyson Foods and Cargill. The $400mn Upside secured follows January 2020’s $161mn Series B round. That round was led by Norwest Venture Partners, SoftBank Group, and Temasek, each making their first investments in the company. 

Expect more SWFs, as well as other large institutional investors, to follow in the footsteps of Temasek and Abu Dhabi – but don’t expect early round outlays. These two funds only stepped into the mix after established venture capital and industry giants have made their moves. Still, over $1bn in alt meat poultry, and fish manufacturing deals have been done since the start of 2021, including Upside’s $400mn in funding this year. Upside competitor, GOOD Meat has received $167mn from two early-stage deals in May and late September 2021. Recent public market experiences of companies like Beyond, down 35% since its May 2019 IPO, will give more conservative investors pause until the market shows it can carve out more than a niche with consumers

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