- Cultured protein startup Geltor raised $91.3 million in a series B financing round to fund the global expansion of its animal-free ingredients platform. The round was led by London-based alternative protein investor CPT Capital with significant participation from WTT Investment. Other participants include Cultivian Sandbox, SOSV, Blue Horizon Ventures, RIT Capital Partners and the investment arm of Archer Daniels Midland.
- The startup produces animal-free proteins, such as collagen, in order to provide companies with a “ridiculously easy” alternative to produce sustainable products. Geltor, which already has animal-free collagens HumaColl21 and Collume on the market, said it has scaled its fermentation-based technology platform up 100 times to produce hundreds of new proteins.
- “We see huge market potential for Geltor’s protein platform across categories from cosmetics to food,” Costa Yiannoulis, investment director at CPT Capital and Geltor board director, said in a statement. “Even more so, in light of the havoc wreaked by COVID-19 on protein supply chains globally, we believe Geltor is laying the foundations for the sustainable, resilient, protein supply chain of the future.”
This most recent round brings Geltor’s total funding to $116.3 million after only five years, according to the company statement. Although the company is relatively new, it is competing in an up-and-coming category that is attracting a lot of investor attention.
As concerns about sustainability and the impact of protein on the environment grow, developers and manufacturers have been racing to release cell-based proteins onto the market. However, most of these companies are focused on beef, chicken, fish or crustacean products, and not necessarily on binders like collagen.
The majority of collagen, which is used in products including gummy bears, candy and marshmallow is sourced from pigs, Geltor co-founder Alex Lorestani told CNBC. Animal-derived collagen not only presents an issue for consumers searching for animal-free alternatives, but as COVID-19 strains supply chains and African swine fever wreaks havoc on Chinese imports, an alternative to traditional sources is becoming more desirable for manufacturers.
According to the release, global demand for collagen grew 25% in the past year and the disruptions to the traditional supply chain have caused sales of Geltor’s animal-free alternatives to surge.
Despite this increased interest in collagen alternatives, cell-based protein remains a novel and sometimes off-putting concept for consumers. In a poll last year, more than 40% of shoppers said lab-produced or synthetic foods and beverages are “scary.” At the same time, the poll showed a growing acceptance of the idea for those aged 18 to 34 with a fifth of those consumers saying these products are the future and will help save the planet. The pull for sustainable solutions and the desire for food companies to make public commitments to good corporate citizenship could prove to override these fears and persuade people to try these proteins.
If Geltor is able to persuade manufacturers to adopt its collagen products, there is a large market on which the company can capitalize. Meticulous Market Research predicts that the global alternative protein market will grow at a 9.5% compound annual growth rate to reach $17.9 billion by 2025, reported Forbes. But Geltor will also have the possibility to bridge into the $3 billion gelatin alternatives market, which is currently dominated by seaweed-based agar agar and carrageenan.
Geltor considers its products vegan because they are made from cells in a fermenter using a process similar to brewing beer. The process converts carbon, nitrogen and oxygen into collagen through microbial fermentation, and the end product is essentially identical to collagen sourced from pigs.
Even with ongoing concerns from consumers about cell-based protein and Geltor’s lack of generally recognized as safe status for its products, investors do not seem daunted. CPT Capital, which led the investment round, has been especially active in the animal-free protein space. The company has also invested in cell-based meat producer Memphis Meats and plant-based seafood maker Good Catch. Similarly, ADM invested last year in Perfect Day, the fermented lactose protein company.
With institutional funding support, startups that received previous investments from Geltor’s major investors have evolved into heavyweights in the animal-protein alternative industry. Perhaps with similar support, Geltor has a chance to also make waves and capture the interest of manufacturers looking to rework their protein supply chains and access the company’s hundreds of proteins that this investment will allow it to scale.