Global Fund Director on Fermentation Investors Are Looking For

The production of meat, dairy and alternative proteins relies on precision fermentation and biomass.

What is the investor perspective on the fermentation market? How can startups become more attractive to investors by reducing costs? How does fermentation compare to alternative methods of protein production, such as cultured meats?

Nadine Gieser, director of climate tech venture capital firm World Fund, spoke to us about the potential of the fermentation sector.

What criteria do investors use to judge a successful start-up?

Geiser, who now works in investing, worked in fermentation as a former biotechnologist.

She explained to us that when evaluating whether or not to invest in a non-commercial fermentation startup, it is important to look at both the organism and the fermentation setup the company uses.

She suggested that they need to match the organism to the protein, functionality and environment. They also need to subject the organism to the appropriate process.

While this knowledge and experience are important, a company CEO must be able to explain in simple terms what the science means, as well as a working model.

Fermentation: what are its opportunities?

Geiser believes precision fermentation can be used to solve problems with plant-based products, including taste.

Using precision fermentation, you can make fat substitutes that enhance the flavor of plant-based meat.

As an investor, she is more interested in biomass fermentation because of its relative simplicity.

How can the sector be improved?

Geiser explained that in the world of microbiological fermentation, the raw materials used are simpler and less expensive than those found in cultured meat, where cell culture media often use fetal bovine serum. In microbial fermentation, glucose is a major price factor.

Even though raw material optimization is not a way to improve the industry, it can still be used. This includes improving efficiency or finding cheaper sources of raw materials.

Customization of strains, which are groups of microorganisms adapted to heat and increased metabolic efficiency, can also be used as a means to further develop the sector.

A better bioreactor could eliminate the need for stirred bioreactors. This type is widely used because of their different cleaning protocol. Bioreactors in this situation could even be made of plastic.

She told us: “Overall, I see an increase in investor awareness, and at the same time, an appetite for improvement.”

AI can be used to reduce costs.

AI is still a relatively new technology and has not been used effectively to reduce costs. Geiser says some companies are using the captured data for future experiments. However, this does not constitute AI.

However, she predicted that the situation could improve in the future. Companies want to record high-quality data, and they usually have a large number of parameters recorded for fermentation.

Are we about to witness a surge?

Geiser explained that many of Europe’s major players, such as Novonesis, DSM Firmenich and others, use a process called “low volume, high value.” That needs to change to scale. Most of the companies that have grown in size are doing so by producing “low value, high volume” products. Geiser said more investment is needed to help major players shift their focus in that direction.

She suggested contract manufacturing as a solution. This is where some processes are outsourced. She told us it is “part of the journey to scale.”

But if you look at contract manufacturing as a whole, it's still expensive. It's hard for companies to make a decent profit.

Where are all the general investors?

Geiser said the meat alternatives sector has seen a lack of investor interest from mainstream players in recent years. That’s because many companies in the sector have received investment as early as 2021 but are still working hard on technical issues.

This is not aimed at the general public, which has become more conservative [recently].

This means that it is not really aimed at a general audience, but rather at a conservative audience [recently].

She told us that Cultivated Meat, for example, had made some big investments. However, these were mostly internal.