Is plant-based protein still on the VC menu in 2022?

Venture capital appetite for plant-based protein startups has slowed this year amid a tougher environment for startup fundraising.

VC investments in the market grew substantially over the past decade, as more people either eschew or reduce their meat consumption for health, climate or animal welfare reasons. Alternative proteins—made of soy, pea or mushrooms, among other ingredients—often aim to imitate the texture and taste of meat, and have grown in popularity.

So far this year, $585.8 million in venture funding has been invested worldwide across 52 deals, according to PitchBook data. At the current pace, investments are likely to fall short of last year’s record high of nearly $3 billion in total deal value.   
The slowdown in plant-based protein investments is not due to decreasing interest in the sector, but rather symptomatic of a wider drop in foodtech-related deals. Compared with Q4 2021, foodtech deal values declined 41% quarter-over-quarter, while the number of rounds fell 13.3%, according to PitchBook’s Q1 Emerging Tech Research on foodtech. The decline could be the one of many signs of a larger market recalibration, as current macroeconomic climate starts to impact the venture capital industry as a whole. 

Still, this year has seen some significant deals for plant-based protein startups. In January, Redefine Meat raised $135 million in a Series B led by Hanaco Venture Capital and Synthesis Capital. A month later, Next Gen Foods secured $100 million from investors including K3 Ventures and GGV Capital. 

Related read: Reinventing Meat: Lab-grown protein is cultivating investor interest

Featured image via Aamulya/Getty Images

This article originally appeared on PitchBook News