PitchBookData,Inc.JohnGabbertFounder,CEONizarTarhuniSeniorDirector,InstitutionalResearch&EditorialPaulCondraHeadofEmergingTechnologyResearchInstitutionalResearchGroupAnalysisAlexFrederickSeniorAnalyst,EmergingTechnologyalex.frederick@DataAlyssaWilliamsDataAnalystpbinstitutionalresearch@PublishingDesignedbyMeganWoodardPublishedonNovember8,2022ContentsKeytakeaways1Introduction2Regulatoryupdates3Addressinginputcosts3Scalingproduction4Strategiestoaddressconsumer6acceptance

EMERGINGTECHRESEARCHDigestingKeyTakeawaysfromtheCulturedMeatSymposium2022MountingenthusiasmforcommercializedcultivatedmeattemperedbyregulatoryandtechnologicalheadwindsPitchBookisaMorningstarcompanyprovidingthemostcomprehensive,mostaccurate,andhard-to-finddataforprofessionalsdoingbusinessintheprivatemarkets.KeytakeawaysDespiteanopaqueregulatoryprocessandtimeline,legalexpertsexpectcultivatedmeattobecommerciallyapprovedwithinthenextyearCellgrowthmediaconstitutes50%to90%ofthetotalcostofcultivatedmeat.Startupsandupstreaminputsuppliersaredevelopingnewproductsandtechnologiestobringcostsdown.Ifcultivatedmeatindustrydevelopmentmeetsprojectedgrowthby2027,itwillstillconstitutelessthan0.1%ofglobalmeatproduction.Additionalresources,governmentsupport,andcollaborationareessentialtoscalingproduction.1PitchBookAnalystNote:DigestingKeyTakeawaysfromtheCulturedMeatSymposium2022IntroductionTheCulturedMeatSymposiumisanannualconferencebringingtogetherstakeholdersintheemergingcultivatedmeatindustry.SpeakersandconferenceattendeesincludedSiliconValleyinvestors,cultivatedmeatstartups,suchasCULTFoodScienceandAlephFarms,andpick-and-shoveltechnologyproviders,suchasSartoriusAGandEppendorf,increasinglyfocusingonthisnascentbutgrowingindustry.Theconferenceisinitsfifthyear,andthisyear’sthemewas“CreativityandCommerce.”Theconceptofcreativitywasheavilyreferencedthroughouttheconferencepresentationsandpanels.Conferenceorganizershighlightedtwotypesofcreativityrelevanttocultivatedmeat:traditionalcreativeapproachestobusinessmanagement,whichincludemarketing,packaging,branding,anddesign.creativeapproachestosolvetechnicalchallengessuchasreducinginputcostsandscalingproduction.Ongoingheadwindstocultivatedmeatcommercializationandproliferationincluderegulatoryuncertainty,steepinputcosts,andheadwindstoscalingproduction.Foradeeperdiveoncultivatedmeatandalternativeproteins,seethefollowinganalystnotes:Alt-proteinIndustryAdvancesDespiteCostsandRedTape:AnalyzingtheStateofAlternativeProteinsandReinventingMeat:Lab-grownProteinIsCultivatingInvestorInterest.USVCquarterlydealactivityincultivatedprotein$500$400$300$200$100$0Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q420182019202020212022*Dealvalue($M)Dealcounource:PitchBook|Geography:US*AsofNovember3,20222PitchBookAnalystNote:DigestingKeyTakeawaysfromtheCulturedMeatSymposium2022RegulatoryupdatesTwolawyersfromCovington&BurlingLLPwithacultivatedmeatspecialtyprovidedaregulatoryupdateattheconference.Theupshotisthattheregulatoryprocessandtimelineisopaqueandtherearepotentialheadwinds,butbothlawyersexpectcultivatedmeattobeapprovedforcommercializationwithinthenextyear.Regulationhasbeenakeyquestiontomanystakeholdersbecausethereiscurrentlynoclearregulatoryprocessortimeline,andverylittleinformationisprovidedbyregulatoryauthorities.RegulationisespeciallycomplexintheUnitedStatesbecausetheUSDepartmentofAgriculture(USDA)andFoodandDrugAdministration(FDA)sharejurisdictionoverlandanimalsincludingbeef,pork,andpoultry.TheFDAhasjurisdictionoverallfood,meaningthatcultivatedseafoodcompaniesareregulatedbytheFDAalone,whilecultivatedlandanimalmeatcompaniesareregulatedbybothorganizations.TheFDAexercisesregulatoryoversightuntilthe“pointofharvest,”andtheUSDAprovidesoversightthereafter.OnecultivatedseafoodstartupdescribedtheFDAas“morescience-based,”meaningithasaclearerregulatoryprocess,andtheUSDAasmoreeasilyswayedpolitically,meaningthatcultivatedmeatregulationundertheUSDAcouldbenegativelyimpactedbylobbyingfromhostiletradegroupssuchastheUSCattlemen’sAssociation.Forthisreason,cultivatedseafoodcompaniesmayhaveaneasierandfasterpathtocommercialization.Labelingisakeyregulatoryconsideration.TheUSDAiscurrentlyundergoingaprocesstoestablishlabelingrequirements.Theprocesskickedoffayearagostartingwithasurveyofstakeholders.Thisisalong-termprocess,andthelawyersdonotexpectproposedrulesinthenearterm.TheUSDAhassaidtheywillapprovelabelingforindividualcompaniesbeforetheypublishfinalrulesasnottoslowdowncompaniesfromcommercializing.TheFDAiscurrentlyperformingapremarketreview,mappingoutateverylevelallhazardsthatcouldariseandsubsequentmitigationefforts.TheFDAsetagoalofprovidingdraftguidancebyDecember31,2022.Attheendofthesession,thelawyerswereaskediftheyexpecttoseecultivatedmeatcommercializedinthenextyear.Bothansweredintheaffirmative.Wildtypesupportedthisexpectation,explainingthattheywereinthefinalstagesoftheregulatoryprocess.AddressinginputcostsCellgrowthmediaisacriticalcomponentincultivatedmeatproduction,asitcontainsnutrientsnecessaryforcellproliferation.Growthmediaisthemaincostcomponentofcultivatedmeat,constituting50%to90%ofthetotalcost.Reducingthecostofgrowthmedia,ortheamountrequired,iscriticaltomovingcultivatedmeattowardspriceparitywithtraditionalanimalmeat.Severaltechniqueswereproposedtoaccomplishthis:Efficientcultivationtechniques:Therearemultiplecultivationtechniquesdeployedforcellproliferation.Advancedcultivationtechniquessuchasfed-batchculturingorperfusionmayreducethequantityofmediarequiredandevenenablemediatoberecycledacrossbatches.3PitchBookAnalystNote:DigestingKeyTakeawaysfromtheCulturedMeatSymposium2022Reducemediacomponents:Growthmediaismadefrom50-70ingredients.Thiscreatessourcingchallengesaswellasregulatorychallenges.Thesmallnumberofingredientsuppliers,combinedwithlowingredientquantitiesneededbycultivatedmeatstartups,canmakesourcingexpensiveandputstartupsatthebackofthelineintermsofsupplierpriority.Additionally,anynon-foodrelatedingredientsthatendupinthefinalproductwillundergoadditionalregulatoryscrutiny,makingtheapprovalprocesscomplex.Eliminatingingredientswillcutdowncosts,sourcingchallenges,andregulatorycomplexities.Reduceinputquality:Growthmediacomponentsaremostoftenusedforpharmaceuticalpurposesandare“pharmaceutical-grade,”meaningtheyaremadetomeetrigorousrequirements,whichincludeadditionalpurificationstepsanddocumentation.Eliminatingunnecessarystepsdesignedforthepharmaceuticalindustrycanlowercostforfoodcompanies.Developplant-basedor“upcycled”alternatives:CompanieslikeORFGeneticsarealreadydevelopingplant-basedgrowthfactorsthataremoreeffective,reducingtheamountrequired,thusrapidlyscalingproductionandreducingcosts.Eventually,agriculturalorevenupcycledsourcesofgrowthmediamaybeanessentialmeanstoreducecostandachievethescalenecessarytoindustrializecultivatedmeatproduction.ScalingproductionThekeynotespeakerwasJustinKolbeck,cofounderandCEOofcultivatedfishstartupWildtype.Justinhighlightedthegapbetweencultivatedmeatproductionpotentialandglobalmeatproductionwithsomequickback-of-the-envelopemath:averagecostofanindustrial-scalecultivatedmeatproductionfacility:$100millionormorenumberoffirmsthathaveraisedatleast$100million:fivenumberoffirmsthatcanbuildindustrialsizedplantsby2027:20estimatedproductioncapacityperfacility:20,000tonsofmeatperyearestimatedglobalcultivatedmeatproductioncapacityby2027:400,000to450,000tonsperyearcurrentestimatedglobalmeat&seafoodproduction:525milliontonsperyeartotalcultivatedmeat&seafoodproductionasaproportionofglobalmeat&seafoodproduction:0.086%.4PitchBookAnalystNote:DigestingKeyTakeawaysfromtheCulturedMeatSymposium2022Inotherwords,evenifcultivatedmeatindustrydevelopmentmeetsprojectedgrowth,itwillstillconstitutelessthan0.1%ofglobalmeatproduction.Additionalresources,support,andcollaborationareessential.Otherindustries,includingsemiconductorsandelectricvehicles,havereceivedmajorgovernmentfinancialsupporttosecurenationalsecurity,forexample,$278.2billioninfundingfortheCHIPSandScienceAct,andingreenenergy,forexample,Tesla’s$465millionloan.Asimilarcasecanbemaderegardingcultivatedmeat,foodsecurity,andfoodsovereignty.AloansimilartoTesla’sgreenenergyloancouldprovecriticaltorapidlyscalinginfrastructure.Collaboratingamongstakeholders,whichcouldincludeknowledgeshareorsharingmanufacturingfacilities,isanotherstrategytohelpbringtheprocesstoscale.Althoughmoststartupsinthespacearefiercelyprotectiveoftheirintellectualproperty,thecultivatedfoodspaceisvast,andstartupsdevelopingproductsindifferentcategoriessuchasbeef,seafood,anddairy,couldshareexpertiseorinfrastructure.Fromaninvestorperspective,infrastructurecollaborationcouldde-riskaninvestmentandacceleratedevelopment.TopUSVC-backedcompaniesincultivatedprotein*CompanyVCraised($M)Post-moneyvaluation($M)HQlocationJustEgg$863.5$1,250.0Alameda,CaliforniaUPSIDEFoods$608.2$1,312.0Berkeley,CaliforniaMetagenomi$276.4N/AEmeryville,CaliforniaWildtype$116.0$449.7SanFrancisco,CaliforniaBlueNalu$84.5$60.0SanDiego,CaliforniaDemetrix$61.0$100.0Berkeley,CaliforniaDMCBiotechnologies$47.9$104.0Boulder,ColoradoFinlessFoods$47.7$184.0Emeryville,CaliforniaProlificMachines$42.0$72.7SanFrancisco,CaliforniaOMeat$40.0$111.1LosAngeles,CaliforniaSource:PitchBook|Geography:US*AsofNovember3,20225PitchBookAnalystNote:DigestingKeyTakeawaysfromtheCulturedMeatSymposium2022StrategiestoaddressconsumeracceptanceAscommercializationnears,stakeholdersneedtothinkabouthowtoeducateandengageconsumers.Thereisatangibleconcernthatoneblundercouldaffecttheentireindustry.Somestartupsarecateringtofansandenthusiastsbyholdingprivatetastingevents.However,thevastmajorityofconsumershavelittleexposuretocultivatedmeat.Onestartuphasrunsurveysindicatingthat50%ofconsumershaveneverheardofcultivatedmeat.SomeparticipantswereunderthefalseimpressionthatBeyondMeatandImpossibleFoodswerecultivatedmeatcompaniesinsteadofplant-basedmeatcompanies.Transparencywasidentifiedasanimportantmeasuretogainconsumeracceptance.Aneasyoptionwouldbetobuildretailorrestaurantoperationsintoproductionfacilities,withclearglasswindowslookingintotheplant.Cultivatedmeatisoftenlikenedtotheprocessofbeerbrewing,withproductionfacilitiesactingasmicrobrewerieswhereconsumerscouldenjoytheproducton-site.Cultivatedmeatwaslikenedtothegeneticallymodifiedorganism(GMO)debacle.AlthoughGMOtechnologymaybeessentialtoincreasingthefoodsupplyinlightofgrowingpopulationsandclimatechange,thetechnologywasvilified.CompanieslikeMonsantofailedtoeducateconsumersandfarmers.Neithergroupunderstoodthebenefits,andthetechnologywasconflatedwithpesticides,contributingtoaconsumerbacklash.Onespeakerexplainedthatconsumerscareabouttaste,price,andnutrition—inthatorder.Communicationisessential,butthemostimportantfactorisdevelopingproductsthatconsumersactuallywanttoeat.Althoughtransparencyisimportant,producersshouldn’toverloadconsumerswithconfusingscience.Transparencymeansrevealingeverything,while“visibility”meansprovidingconsumerswithinformationrelevanttothem.Onepanelfocusedonauxiliary