This startup is using precision fermentation to make plant-based food taste better. Check out the 10-slide pitch deck Paleo used to secure $12.8 million.
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- Belgian startup Paleo just raised $12.8 million to make plant-based food taste better.
- It uses precision fermentation and yeast to grow proteins “identical” to animal-based protein.
- Check out the 10-slide pitch deck it used to raise the funds from DSM Venturing and Planet A Ventures.
A European foodtech startup cofounded by a former Belgian senator has just raised 12 million euros (around $12.8 million) to make plant-based food taste better.
Founded in 2020, Paleo uses precision fermentation to produce proteins that it says are identical to animal-based proteins. The proteins are a form of heme, which has been deemed key in unlocking a meaty look, taste, texture, and aroma for plant-based food.
Venture capital investment in fermentation has crept up over the last five years, totalling $982 million in 2022. The figure is dwarfed by the record $2.3 billion invested in 2021, a year private markets were flush with capital and is largely considered an outlier, but builds on the $843 million handed to fermentation startups in 2020.
Heme was thrust into the spotlight in 2017 when Impossible Burger launched its plant-based version, which enabled its burgers to “bleed.” Paleo will sell its products to other plant-based food companies so they don’t have to develop it in-house. The company has developed heme for beef, chicken, pork, lamb, tuna, and even mammoth.
Cofounder and CEO Hermes Sanctorum, a bioengineer who spent 10 years as an MP in the Flemish Parliament, has always been driven by animal welfare and environmental concerns. During his time there, Sanctorum successfully proposed a law to ban the slaughter of animals without stunning.
“I must confess, even when you stun an animal before slaughtering … you still have to raise it, it’s still suffering. I started thinking, we should really fundamentally change the consumption of proteins,” the former Environment, Nature, Urbanism, Energy and Animal Welfare committee member told Insider.
Paleo programmes and trains yeast to produce a specific myoglobin, a muscle heme protein, depending on what kind of meat or fish is being produced. This is done via precision fermentation, in vats similar to brewing beer or fermenting yoghurt. It also programmes the yeast to produce the protein outside of its own cell so the two can be separated, meaning Paleo’s product is non-GMO as there is no DNA in the final product.
The process is currently taking place in Paleo’s lab, in 10-litre fermenters, but will now be scaled up as a result of the fresh funds. The Series A round was coled by DSM Venturing, the venture arm of Dutch science multinational DSM, and Planet A Ventures.
The startup will use the cash injection to scale up, which includes optimizing its process and seeking regulatory approval. The round was oversubscribed but it was not immune to economic headwinds, Sanctorum said. Paleo had originally planned to use the cash to build a production facility but found investors were “quite capex-adverse,” he said, so decided to focus on its technology and rent space instead.
After years of consecutive growth, the plant-based food sector has slowed. Plant-based alternatives can still come at a price premium; economic uncertainty and the rising cost of living may have led consumers to buy cheaper proteins like animal meat.
Sanctorum is undeterred. “The main challenge now in the plant-based food space, it’s taste, and that’s exactly where we offer a solution,” he said. “We talk a lot of foods companies and there is no lack of belief that alternative proteins is are the way to go.”
Europe is a key market for the company but it is also eyeing Southeast Asia and North America. To put its plan into action, the Paleo team will grow from 15 to 25, with roles available in fermentation, regulation, and commercial.
Gimv, SFPIM Relaunch, Beyond Impact, and Siddhi Capital also participated in the found. It bring Paleo’s total capital raised to 12 million euros.
Check out the 10-slide pitch deck Paleo used to raise the funds below: