Aleph Farms faces funding challenges amid market shifts
ISRAEL – Israeli cultivated meat company Aleph Farms is reducing its valuation by 73% in an ongoing funding round, citing the need to adjust to changing market conditions.
The company is seeking US$25 million in investment but is expected to raise only US$10 million in the coming weeks, according to reports from shareholder Millennium Food-Tech.
This new round values Aleph Farms between US$80 million and US$100 million, a steep decline from its US$300 million valuation in its 2021 Series B funding.
Millennium Food-Tech has cut the value of its stake in the company by 75%, indicating concerns over Aleph Farms’ financial stability and its ability to sustain operations beyond the next year.
Industry-Wide Challenges Impact Funding
Aleph Farms, which has raised over US$118 million since its establishment in 2017, was among several cultivated meat startups that benefited from the mid-pandemic surge in venture capital funding.
Its US$105 million Series B round in 2021 included investments from figures such as actor Leonardo DiCaprio.
However, economic factors such as inflation, supply chain disruptions caused by the COVID-19 pandemic, and geopolitical instability in Gaza and Ukraine have slowed growth in the sector.
Data from Net Zero Insights, cited by the Good Food Institute, shows that global cultivated meat investments dropped from US$1.3 billion in 2021 to US$137 million in 2023, with only US$6 million secured in the second half of last year.
Several startups have shut down, while others have downsized operations, including Aleph Farms, which laid off 30% of its workforce last summer as part of a cost-cutting strategy.
Shift in Business Strategy
Aleph Farms has been expanding internationally and secured regulatory approval in Israel in December 2023 to sell its cultivated beef steak.
The approval was conditional on passing a Good Manufacturing Practices inspection, though no updates have been shared on the process.
The company, which has set a long-term goal of reaching US$1 billion in revenue by 2030, is currently awaiting regulatory clearance in Singapore, the UK, Switzerland, and Thailand.
It is also in advanced discussions with authorities in the US and plans to expand to Japan, South Korea, Australia, China, and Hong Kong in the future.
Aleph Farms previously focused on scaling up production, opening a 65,000-square-foot facility in Rehovot, Israel, in 2022, followed by a second site in Modi’in and co-manufacturing partnerships in Singapore and Thailand.
However, it is now prioritizing three key areas: lowering production costs, introducing its first commercial product, and ensuring profitability.
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