Newform Food - Investment Memo

Pioneering cultivated meat via a modular bio-manufacturing platform

Newform Foods (formerly Mzansi Meat) is a UK and South African foodtech startup offering a bio-production platform for cultivated animal products. Their technology enables food companies to manufacture cultivated meat (first vertical). Future verticals include: fat, connective tissue, functional ingredients like Omega 3.

Newform provides an end-to-end solution for the cultivated meat value chain - from cell lines to pilot production. Their goal is to accelerate the adoption of cultivated meat globally by lowering barriers to entry. Newform's modular, subscription-based platform reduces risk, cost and timelines for food businesses looking to integrate sustainability.

Since 2020, Newform has made significant advances in refining and testing its flexible bio-manufacturing prototypes focused on scalability and automation. They provide customized packages for food industry clients tailored to specific needs across research, small-volume prototypes, pilot facilities, and licensing agreements.

The traditional industrial animal agriculture system faces pressing challenges around environmental damage, climate impact, ethics and meeting rising future demand. However, existing cultivated meat solutions have extensive infrastructure requirements, multi-year timelines and uncertainty in navigating emerging regulations.

Newform provides an alternative path into cell-cultured meat production through its modular off-the-shelf bio-platform. Companies can tap into a ready launchpad avoiding the capital intensity and technical complexity facing early movers in cultivated meat:

This accelerated process de-risks the route into this emerging space. Newform Food bridges the gap between interest and adoption at a pivotal moment when early adopters are exploring more sustainable meat solutions.

Newform Foods offers a modular bio-manufacturing platform. This enables food companies to pilot and scale cultivated meat production in-house without intensive upfront investment into full end-to-end infrastructure.

The modular bio-platform provides clients the flexibility to match precise business needs. Newform's range of packages allows food brands to explore use cases spanning research, prototyping, pilot production, and licensing the complete bioprocess 10x cheaper and 3x faster than other players

This tiered suite of bio-solutions integrates seamlessly under a single umbrella. Newform charts an accessible route into the cultivated meat ecosystem catering to clients at any stage of maturity.

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Newform Foods' cultivated meat production line:

Part of this funding round is to build a 1000 L demo prototype to be used for client engagement and in-house production and testing. It will generate over 550 kg of cultivated biomass per month. The media cost at this stage will be $50/liter

The cultivated meat sector has seen surging growth trends, with over $3 billion invested globally across startups in the space as of 2022. Corporate participation is likewise expanding with leading meat processing giants like JBS and Cargill actively acquiring startups to tap into this domain early as a hedge.

Recent deals include:

Venture enthusiasm mirrors massive enterprise participation as companies urgently seek ways to respond to escalating consumer demands for more ethically, sustainably-produced proteins globally. This enormous latent demand-side opportunity suggests cultivated alternatives will transform into multi-billion dollar categories over the coming decades.

Recent M&A activity demonstrates corporate eagerness to gain strategic exposure early:

This surging investment momentum highlights the potential for Newform Foods to pave inroads offering modular and affordable bio-manufacturing gateways to expedite sustainable protein’s real-world proliferation. Their differentiated approach sits squarely at the nexus of technological proficiency and commercial viability required to make this critical evolution unfold at scale.

New Form Food has 5 main revenue lines:

Historical finances 2020 - 2023 (4 years)

Food & Meat Producer

Food & Meat Producers globally are starting to future proof their business by investing in the technology early. JBS and Cargill have all invested or bought into the cultivated meat industry and there are more companies that can benefit from future proofing by gaining access to the technology early.

Food Retailer

Food retailers ultimately are exploring innovations to stock shelves with what customers want. Many have seen progress on plant-base products but are reluctant to to spend millions of dollars in a new technology upfront

Equipment Manufacturer

More niche category, with some equipment manufacturers that are looking to future proof themselves in the farming industry. Looking to purchase more specialised equipment

Africa’s livestock numbers are expected to increase by a much larger absolute number and at a higher rate than Asia’s projected 26% rise from 2012 to 2050 (source). With Nigeria and South Africa as key drivers of growth of intensive animal agriculture.

These figures are made evident by the fact that South Africa has the world’s largest feedlot. The Karan Beef feedlot accounts for 70% of South Africa’s beef exports and 30% of the local market (source).

There is a growth in demand with meat consumption in the EU expected to reach 47.5 million tonnes by 2030, up from 44 million tonnes in 2020. In the UK meat consumption is projected to rise to 2.4 million tonnes by 2025 from 2.2 million currently. The rising income levels and demand for high protein foods driving growth especially in processed and packaged meat.

Trends in technology and innovation are focus on:

There is growing pressure to reduce environmental impact driving tech like biogas, precision agriculture, and process optimisation. Producers investing in startups and piloting production to prepare for consumer adoption of cultivated meat.

List of major retailers based on volume and revenue

JBS, one of the world's largest meat producers, recently made significant strides in the field of cultivated meat. They acquired a Spanish cultivated meat company, Biotech Foods for $100m and are currently collaborating to build one of the largest cultivated meat factories in Brazil. This move demonstrates JBS's proactive approach to adopting innovative and sustainable practices in response to the growing awareness of environmental and ethical concerns related to traditional meat production. This strategic investment positions JBS at the forefront of the evolving food industry, showcasing their commitment to staying ahead in the market.

The cultivated meat competitive landscape remains open for disruption across Africa, the UK, and Europe. Small early startups are scattered trying to gain traction, while regulatory policies still present obstacles for rapid testing and adoption in many areas.

However, South Africa uniquely provides flexibility allowing public tastings of cell-cultured prototypes, accelerating real-world evaluations. This positions local players like Newform Foods to lead development gaining a 12-18 month head start perfecting products matched to consumer preferences through extensive trials. Interest in the African market likewise remains less saturated compared to Europe currently.

In contrast, countries across the EU face more ambiguity still working to formalize oversight policies for both R&D as well as ultimate sale of finished products. Strict Novel Foods acts stipulate extensive safety reviews often taking years before authorizing first meat alternative introductions in these markets.

Newform Foods strategically leverages South Africa's supportive cultivated meat backdrop to accelerate prototyping while linking with partners in innovation-friendly UK regions.

United States Department of Agriculture (USDA) approved the first-ever lab-grown meat for 2 companies:

Meatable (🇳🇱), received funding of USD 35 million that it will use for the production of lab-grown sausages, pork products, and dumplings.