London-based biotech VC Agronomics An impressive boasts Portfolio of venture-stage companies, primarily in cellular agriculture; Most of which will be familiar to vegans, such as Rebel Meals (plant-based chicken).; Formo (animal-free dairy); each (egg substitute); bluenalu (farmed seafood); Mosa meat (farmed meat); and Liberation Lab (Precision Fermentation), among many others.
Co-founder Anthony Chow graciously took the time to chat with us about the current and future position of the cellular agriculture space, providing some unique and extremely valuable insights.
Please introduce Agronomy, what does the company stand for?
Agronomics is a leading listed company, listed on the London Stock Exchange, focused on the field of cellular agriculture and the production of agricultural products directly from cell cultures that have historically evolved from traditional farming methods. Our investment focus is on the production of cultured meat directly from cells, as opposed to slaughtering an animal, as well as precision fermentation (primarily for dairy and egg protein) and enabling technologies to support these segments.
The food sector is known to be the largest contributor to biodiversity loss; Food production depends on agricultural practices, which use large amounts of water and land. Farming practices can be linked to deforestation and have had a negative impact on the environment, adding to the impact of climate change and continuing environmental concerns. The production of alternative food products is an important way to produce food without further burdening the planet.
Demand for alternative and environmentally friendly food sources has increased in recent years, with more and more people attracted to these products, however, many plant-based products do not meet consumer expectations in terms of price and taste, which has led us to invest in the field of cellular agriculture, where products are directly Can replicate farming options that consumers are used to.
How would you describe the progress and significance of cellular agriculture in 2023?
In 2022, several breakthrough changes took place, representing a shift in the sector as companies move from R&D validation to commercialization. The regulatory approval landscape in the USA is gaining momentum, in November 2022, the FDA issued a ‘no question’ letter to Upside Foods regarding their farmed chicken products, followed by another letter in March 2023 for good meat farmed chicken.
“Finding sustainable alternatives to agricultural products is fast becoming a top priority.”
In Upside’s no-questions-asked announcement, the FDA said it is working closely with the USDA on final approval, which would be the final step toward commercialization in the United States. It will likely be the first of many farmed meat companies to gain approval in the United States, and further, additional jurisdictions may follow suit by establishing their own regulatory pathways for farmed meat approvals.
Finding sustainable alternatives to agricultural products is fast becoming a key priority for major jurisdictions as they work towards achieving ambitious 2030 climate targets, as shown by the EU’s agreement in December 2022 to implement new restrictions to ensure products placed on the EU market are not forested. Not contributing. and forest degradation in the EU and elsewhere in the world.
Cellular agriculture is one of the only technologies with the potential to decarbonize the world’s protein production systems while meeting the protein demands of a growing world population, and its importance continues to grow as many companies move out of the research and development phase and into commercial production.
How many company holdings does Agronomics currently have?
Agronomics currently has more than 20 portfolio companies within the cellular agriculture sector. We have an established portfolio of venture-stage companies, with a global mandate but investing mainly in US and European companies. Most of the portfolio is currently in the Series A stage.
What are the agronomy requirements for investing in companies?
We invest in companies working in the field of cellular agriculture, which obtain conventional agricultural products directly from cell culture and fermentation without the involvement of animals. From 2022, we have put special emphasis on companies using precision fermentation technology or providing contract precision fermentation services.
We want to invest in companies that are developing technologies to reduce greenhouse gas emissions, antibiotic requirements, land use, water use, energy use, improve animal welfare and mitigate climate change.
How do you think the alternative protein sector will evolve over the next few years?
The alternative protein sector is vast, from plant-based burgers to precision fermentation and cultured meats. We expect a significant differentiation between these markets in 2023 with the approval of precision fermentation and cultured meats in the US and larger commercial launches.
Plant-based proteins will not be able to recover the rapid sales growth and consumption levels they once assumed, until their sensory profile is improved, perhaps by refined fermentation-produced proteins and cultured meats, and their costs are further reduced.
“In the coming years, we will see a wave of additional product approvals in Singapore and the US”
Once the USDA gives final sign-off to the first two companies (Upside Foods and Good Meat) that received their respective “no questions asked” letters from the FDA, consumers will be able to taste these long-awaited products first hand, as the Agronomics team is already there. , and realized that they are just like conventionally produced proteins.
In the coming years, we will see a wave of additional product approvals in Singapore and the US And then beyond that, a number of additional jurisdictions have approved the sale of these proteins, with Japan and South Korea likely to follow quickly after the United States. Unfortunately, at this stage, it looks like Europe will lag behind in this revolution. It is worth noting that precision fermentation proteins are now approved in the US, Singapore, Australia and India.
“Unfortunately, at this stage, it looks like Europe will lag behind in this revolution.”
With this increased certainty around the end market, large-scale infrastructure will be built to drive cell ag proteins downstream through economies of scale and create an investable asset class for infrastructure investors with more defensible revenue and cash-generating assets. This, we believe, will lead to a multi-decade, multi-trillion dollar capital inflow into the sector, which at first will only help meet the growing protein needs of the global population, but will begin to be displaced over time (over decades). Conventional production methods. Ultimately this will reduce food price volatility and increase food security and reduce the suffering of billions of intensively farmed animals.
What are the plans for 2023?
In 2023, there is potential for further investment in our existing businesses and we are always looking for new investment opportunities. Agronomy currently has £29.8 million of cash on our balance sheet. Our current investment portfolio shows considerable promise for future growth, with near-term inflection points including regulatory approvals and technology scaling. We expect significant developments in several of our portfolio companies to positively impact their valuations in the coming months and look forward to market updates when appropriate.