Contents07 sections
A young company out of an industrial lab pitches its technology for cultivated meat. Investor meetings fill up on their own, and the questions are about valuation and speed, not about whether.
Same company, same pitch, now with better data and a more advanced prototype. The meetings stay empty.
The technology was better in 2023 than in 2021. The money was gone.
A sector loses 95 percent of its capital
The example is made up, the numbers aren't. The Good Food Institute has been tracking investment in cultivated meat for years. In 2021, around $1.4 billion flowed into companies in the industry. In 2022 it was $922 million, in 2023 just $226 million, in 2024 $144 million. In 2025, $73.9 million came together. That's a drop of around 95 percent in four years.
Two details make the picture even sharper. From 2022 to 2023, the number of investors still putting money into the sector at all almost halved, from 204 to 111. And according to GFI, the ten largest funding rounds in the industry's history all fell in the low-interest-rate period from 2020 to 2022. The three largest deals of 2025 each fail to make even the top twenty of all time.
The technology didn't get worse in that time. The climate turned.
This isn't an isolated case
If you think this is peculiar to alternative proteins, take a look at cleantech. MIT researchers analyzed the first cleantech wave: venture capital funds put over $25 billion into cleantech start-ups between 2006 and 2011 and lost more than half of it. Companies with new materials, chemistries or processes that never reached the scale of series production were hit especially hard. They returned only a sixth of the capital invested. Cleantech software, by contrast, came in at around 3.5 times.
Research on investment cycles shows a similar pattern. Nanda and Rhodes-Kropf studied VC-backed start-ups over more than two decades. If you get your first funding in a hot market, you're less likely to go public. In fairness, they show the other side too: companies from hot phases are more innovative, hold more patents, and when they do go public, it's at higher valuations. Hot markets fund bolder ideas. They just also leave them hanging more often.
In fairness: deep tech as a whole is more robust than its reputation
It would be convenient now to say: deep tech is just cyclical. That's not quite right. According to Dealroom, around $20.9 billion of venture capital flowed into European deep tech companies in 2021, and $15.1 billion in 2024. A drop of 28 percent, while classic tech collapsed by 60 percent over the same period. That's why Dealroom calls deep tech a hedge against momentum investing.
That's exactly what makes it treacherous. The overall picture looks stable while individual sectors collapse completely. If you only look at the deep tech statistics, you miss that your own market is drying up.
Investors buy a cost curve, not science
Before we get to the second market, a word on the story a venture tells. Cultivated meat shows nicely what investors look at in the end. CE Delft's techno-economic analysis concludes that costs today are a factor of 100 to 10,000 above the target. Even its optimistic scenarios for 2030 only work if growth factors and recombinant proteins get drastically cheaper and the expected return sits far below what commercial investors usually demand. David Humbird's analysis arrives at $37 to $51 per kilo even for unstructured cell mass, against a target of 25. Structured products, meaning real cuts instead of cell paste, are an additional, more expensive step.
The lesson: no investor funds a novel process. They fund what makes the process cheaper, faster or possible in the first place. A technology that directly attacks a known cost driver sells itself in one sentence. “It makes X cheaper” beats “a novel process based on Y” every time. In my experience, many pitches out of labs fail not on the technology, but because they tell the science instead of the math.
The second beachhead
Now to the core. A technology from the lab almost always has more than one application. Often there's the big bet, the market with the highest value and the longest road. And there's a smaller, faster application that can bring in revenue with the same technology and little additional development.
Gruber, MacMillan and Thompson showed in Management Science: founders who identify several market options before their first market entry perform better. The effect has diminishing returns. Two or three real options help, ten don't help anymore.
And this is where the strongest objection belongs. Gans, Stern and Wu argue that founders face several equally good alternatives and have to consciously decide against most of them, because they can't pursue all of them at once. Geoffrey Moore has been preaching the same thing for decades: one niche, full focus. Both are right. If you work two markets at full strength simultaneously, you work neither properly.
The way out isn't a dual strategy, but a sequence with a plan B. The big bet stays the big bet. The second application is identified before founding, technically vetted and backed by first conversations. It runs in parallel with a small stake or sits ready. If the climate in the first market turns, the company can pivot without starting from zero. That this works is shown by a field study of 116 Italian start-ups by Camuffo and colleagues: founders who test their assumptions systematically pivot more often, but don't give up more often. If you know your options, you change course instead of going under.
Sector sentiment belongs in the pre-founding review
This has a practical consequence for every carve-out and every spin-off. The question “What's the sentiment in this sector?” doesn't belong in the time after founding, when money gets tight. It belongs in the first review, alongside IP, maturity and market.
What needs to go on the table: how has invested volume in the sector developed over the last three years? How many active investors are left? How strongly does funding depend on the interest rate level? And can the second application be funded independently of the first market? If all the answers point the same way, that's not a rejection of the technology. It's a rejection of the assumption that it will fund itself in this market.
Plan the big bet. But only found the company once you know what it lives on if the bet bursts.
Sources
- Good Food Institute, “2021 State of the Industry Report: Cultivated Meat” (2022): 2021 investment around $1.36 or $1.38 billion (inconsistent within the report, rounded here to ~$1.4 billion) — gfi.org
- Good Food Institute, “2023 State of the Industry: Cultivated Meat and Seafood” (summary): $922 million (2022), $226 million (2023), number of investors 204 → 111 — gfi.org
- Good Food Institute, “2024 State of the Industry: Cultivated Meat and Seafood” (summary): the ten largest rounds all in the low-interest-rate period 2020–2022 — gfi.org
- Good Food Institute, “Cultivated meat and seafood: State of the Industry Report” (website, as of 2026): $73.9 million (2025) after a revised $144 million (2024), largest 2025 deals outside the all-time top 20 — gfi.org
- Gaddy, Sivaram, O'Sullivan, “Venture Capital and Cleantech: The Wrong Model for Clean Energy Innovation”, MIT Energy Initiative Working Paper MITEI-WP-2016-06 (2016); published with Jones and Wayman in Energy Policy 102 (2017): over $25 billion 2006–2011, more than half lost, materials and process companies returned one sixth, software approx. 3.5x — Working Paper, doi.org
- Nanda, Rhodes-Kropf, “Investment Cycles and Startup Innovation”, Journal of Financial Economics 110(2) (2013): funding in hot markets lowers IPO probability, but companies are more innovative and valued higher at IPO — doi.org
- Dealroom, “Deep Tech Report 2025” (2025): VC in European deep tech $20.9 billion (2021) → $15.1 billion (2024), −28% versus −60% for classic tech — dealroom.co
- CE Delft, “TEA of Cultivated Meat” (2021, corrigendum 2021): costs today a factor of 100–10,000 above target, 2030 scenarios only with drastic cost reductions and expected returns below commercial practice — gfieurope.org
- Humbird, “Scale-Up Economics for Cultured Meat”, Biotechnology and Bioengineering 118 (2021): $37–51/kg for unstructured cell mass against a target of $25/kg, structured products as an additional step — doi.org
- Gruber, MacMillan, Thompson, “Look Before You Leap: Market Opportunity Identification in Emerging Technology Firms”, Management Science 54(9) (2008): several market options identified before entry improve performance, with diminishing returns — doi.org
- Gans, Stern, Wu, “Foundations of Entrepreneurial Strategy”, Strategic Management Journal 40(5) (2019): several equally good alternatives, founders must decide against most of them — doi.org
- Camuffo, Cordova, Gambardella, Spina, “A Scientific Approach to Entrepreneurial Decision Making: Evidence from a Randomized Control Trial”, Management Science 66(2) (2020): 116 start-ups, founders who test systematically pivot more often, don't give up more often — doi.org
