Cultivated meat firm Upside Foods has cut its workforce as the industry continues to struggle with bans from legislators and a significant downturn in venture capital funding. In an email sent to employees, Upside CEO Uma Valeti wrote that 26 people would leave the company and that executive and leadership teams would be restructured to “reduce top-heavy structures.”
“Our focus must now narrow to a tighter set of priorities that pave the way for our product launches in the next two years,” Valeti wrote in the email seen by WIRED. “We need to deliver on the work that remains, especially on critical milestones that are yet to be hit or are delayed.”
Upside is among the best-funded startups in the cultivated meat industry, and one of only two firms that is cleared to sell its product in the US. In February, WIRED revealed that the startup had put on hold its plans to build a large cultivated-meat plant in Illinois and made “selective role eliminations” and “other changes” that would impact 16 employees.
In the most recent email, Valeti wrote that the company was pausing its “large-scale tissue program.” The company started selling its whole-cut chicken in July 2023 at Bar Crenn restaurant in San Francisco, but since this initial launch Upside has indicated that instead of whole-textured tissue, it is focusing its scaling efforts on so-called “suspension” products, more suited to producing chicken nuggets, patés, and other ground-meat products.
In the email Valeti also called out the difficulties currently facing his industry. “Uncertainty related to political, regulatory and macroeconomic headwinds requires us to be even more deliberate and conscious with our focus and resources,” he wrote. In May, Florida and Alabama passed laws that banned the sale of cultivated meat in those states.
“Upside is focused on our next chapter of scale and commercialization. To stay agile in the face of an uncertain macroeconomic environment and preserve the resources needed to reach our milestones, we made the difficult decision to eliminate a number of positions,” said interim head of communications Melissa Musiker in a statement to WIRED. “We’re deeply grateful for the hard work, commitment, and dedication of our departing team members and remain steadfast in our mission to bring cultivated meat to the world.”
On June 27, a few days before Florida’s ban came into force, Upside hosted a public tasting of its chicken in Miami. Outside the event, a mobile billboard protesting against cultivated meat directed people to a website backed by the Center for Environment and Welfare—a group linked to public relations firm Berman and Company, which has a long history of supporting nonprofits that defend the interests of the food and drink industry.
Steve Molino, an investor at Clear Current Capital, a sustainable-food venture capital firm that isn’t invested in Upside, says that it was a good sign that Upside was adjusting its strategy to account for these headwinds. “Too often we see companies wait until it’s too late to make difficult changes,” he says.
Venture capital funding for the cultivated meat industry has dried up significantly over the past couple of years, putting added pressure on companies as they attempt to reduce the high costs of producing meat in bioreactors. The industry attracted $922 million in funding in 2022, but in 2023 this dropped to $226 million, according to data from the Good Food Institute, a nonprofit that supports alternatives to animal protein.
Getting funding to overcome technical challenges is a big hurdle for companies right now, says Molino. “Some amazing progress has been made on the technicals, which has improved unit economics industry-wide tremendously, but commercial viability is not quite there for the true commodity products.”
The cultivated meat industry has already weathered some casualties this year. In June, the CEO of SCiFi Foods announced that his company was shutting down, as it had been unable to raise enough money to commercialize the burger it was developing, which was to be a blend of plant-based ingredients and animal cells. In February, AgFunder News reported that multiple employees at cultivated-seafood startup Finless Foods had changed their status on LinkedIn to “opentowork,” and some had shared posts explaining they were looking for new positions. Israel-based Aleph Farms also reduced its workforce by about 30 percent earlier this year.
Molino says he expects to see more closures over the next few years. “The funding environment is as closed as I’ve ever seen, so only a select few in the cultivated space will be able to keep pushing for progress,” he says.
Source : Wired
