UK corporate finance house, Oghma Partners, has published its latest UK Food and Beverage Sector M&A report which documents a rise in funding for cell-based meats.

Cell-based meats can be sold in only two countries – Singapore and the USA – and within those countries, only two companies have regulatory approval, UPSIDE Foods (USA) and Eat Just’s ‘Good Meat’ (US and Singapore).

UPSIDE Foods has raised £555.1 million in funds, representing 21.5% of the global total of cell-based meat funding.

According to Oghma Partners, the USA approval is a “critical development” given the size of its consumer market, and regulatory progress looks promising in many other nations where Governments are showing interest in cell-based meats.

This comes as Italy recently moved to ban cell-based meat activity.

Mark Lynch, partner at Oghma Partners, said: “We believe that this potential has driven interest and speculative investment into the industry. Significant investment into the cell-based meat industry has led to increasing cap-ex spend with many companies scaling up production capacity and R&D facilities.

“These investments, some of which are yet to be completed, have the potential to accelerate the launch of products to consumers in the cell-based meat space. However, money for new investment is now harder to come by, as the slowdown in funding so far in 2023 demonstrates.

“The industry will be challenged to deliver sales to consumers and to stretch funding runways to the point of delivering profitability. We see a shake-out similar to that we are seeing in the plant-based meat sector, with consolidation amongst the players most likely.

“The USA is paving the way for the cell-based meats industry globally with the largest number of investors, and producers. A favourable regulatory environment and ease of business is seeing the USA become a hub for industry activity.

“Multiple overseas companies are looking to relocate or move certain operations to the USA. Israel and the UK are the second and third most active countries, after the USA., in terms of the level of funding for cell-based meat start-ups which reflects a combination of the level of innovation going on in their respective food industries/universities as well as the capital market pool available, combined with a flexible regulatory environment.”