Growing consumer awareness about cruelty-free products, venture capital (VC) investor interest, new business models, and novel source availability are driving the protein alternatives market globally. As these alternatives come close to conventional protein sources in terms of price, taste, and texture, we are likely to witness more demand in the future, making it an exciting sector to watch out for, says GlobalData, one of leading data, and analytics companies.

Pranjali Mujumdar, disruptive tech analyst, GlobalData, comments, “The emergence of alternative proteins, which include plant proteins, dairy alternatives, meat, and seafood substitutes, is attracting VC investors' attention. Plant-based proteins constitute around 50% of investors’ deals and are the most funded category, with a significant volume of funding going into a small group of startups.”

Manish Dixit, practice head of disruptive tech, GlobalData, comments, “Since the protein alternatives sector is still in its infancy compared to the many established categories, any investment now will have a major knock-on effect on how the industry moves and grows in the upcoming years. VC activity in the alternative protein space is already picking up very rapidly. For instance, alternative protein companies raised $1.05 billion from VC investors in the first half of 2022, representing a staggering 173.8% growth over H1 2021's $384.13 million.”

An analysis of GlobalData’s Disruptor Intelligence Center reveals that organizations are penetrating the nascent alternative protein market and view this as the next growth opportunity.

In April 2022, Upside Foods, a US-based company involved in the cultivated meat, poultry, and seafood industry, secured $400 million in a series C funding round co-led by Temasek and the Abu Dhabi Growth Fund (ADG). The funding will be used for product innovation, partnerships, and the infrastructure needed to make cultivated meat at scale.

In September 2022, Innovafeed, a French biotech company producing insect-based protein for the feed industry, raised $250 million in Series D funding led by Qatar Investment Authority (QIA). The funding will be used to expand its manufacturing capabilities, speed up worldwide expansion, particularly in the US, plan the global roll-out of its technology, including development in Asia, and maintain its investment in research and development (R&D).

In May 2022, Redefine Meat, an Israel-based producer of plant-based meat designed to replicate the texture, flavor, and taste of beef and other high-value meat products, secured $250 million in a venture funding round led by Hanaco Ventures, with participation from Synthesis Capital. The funds will be used to grow its partnerships with restaurant chains in Israel and around the world, as well as to establish a production line and product factory in the Netherlands and Israel, respectively.

“Technology investors, sensing an opportunity to capitalize on the increasing globalization and industrialization of food, are investing heavily in startup companies, which pitch alternative methods of growing, manufacturing, processing, and distributing food. The scale of interest and investment in alternate proteins seems to have intensified and there is a growing consensus that this trend is here to stay,” Mujumdar concludes.