Navigating funding challenges in 2024: What alt-protein companies should know

“A lot of companies were able to survive throughout 2022 and pivot a bit, but 2023 was the year where we saw the companies that weren’t able to pivot as quickly, or were not able to ultimately raise future rounds of funding, they started going out of business,” said Steve Molino, principal at Clear Current Capital. “Also, the ones that did exist and did survive, even the new ones, the way they looked at raising money, growing their businesses, and scaling was very different. So, a lot of focus on the fundamentals.”

Alt protein: A ‘symptom of a broader reset … in the investing market’

In 2023, alt-protein companies faced numerous headwinds​, as venture capital dried up and the cost of traditional bank debt increased due in part to higher interest rates, and consumer demand moved away from the category in the US.  

These macro-economic changes didn’t just change how alt-protein founders thought about raising money, but VC firms also had a harder time raising money and became more critical of what type of investment they were making, noted Matt Spence, managing director and global head of venture capital banking at Barclays.

“A lot of the [limited partners] were looking for more returns, more exits, and it has become a much more difficult environment for everyone involved, even though the fundamental thesis of alternative proteins — what it could be — remained real. But alternative proteins became one symptom of a broader reset of the broader investing market. So, this is not something that’s really unique to alt proteins,” Spence said.