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HK billionaire backs Aussie start up in $45m round

Canberra-based food tech start-up Nourish Ingredients is the latest in a burgeoning group of local alternative meat companies to score backing from high-profile investors, raising $US28.6 million ($45.3 million).

The company has added Main Sequence Ventures and Hostplus to its register, as well as the private investment arm of Hong Kong billionaire Li Ka-shing, Horizons Ventures.

The business, co-founded by former CSIRO scientists James Petrie and Ben Leita in late 2019, is developing synthetic fats and oils to replicate the taste, texture and smell of meat, to be used in plant-based alternatives.

A carnivore himself, Dr Petrie said while plant-based proteins have been gaining traction among vegans and vegetarians, by and large they have not managed to crack the meat-eating portion of the population.

“There has been a lot of emphasis on the protein part of plant protein food, which is understandable, but if you think of a beautiful roast chicken, you have that juiciness and succulence and those beautiful aromas. That’s difficult to replicate using plants,” he told The Australian Financial Review.

“We thought, how can we make the real animal thing, but not in the animal? We did a molecular dissection of meat and dairy to understand the specific fats and oils that create the wonderful aroma we crave.

“[We discovered] that maybe 20 per cent are distinctly animal fats and oils, while the rest can be easily replicated with plants. This small group, this 20 per cent ... is what gives the taste and experience of meat.”

The company uses precision fermentation – a process which uses microbial hosts as “cell factories” for producing specific functional ingredients – to make the fats and oils using yeast.

It’s an expensive process, and to build a facility capable of producing the fats and oils at scale he expects would cost $250 million.

The company is still tossing up whether to build its own manufacturing facilities, or to lower this cost barrier by forming a partnership with another precision fermentation or cellular agriculture player. Some companies have already launched facilities that others can pay to use, including start-up Perfect Day and a company formed by Fonterra and Royal DSM.

The business is yet to commercialise its products, but Dr Petrie said this latest capital raise would enable it to “get to the point of market entry”.

The tight funding market made it a “difficult environment” to raise funds in, he said, but he believed this was a good thing for the sector.

“I don’t think it’s unhealthy for the start-up ecosystem. It was overheated around plant protein and a lot of that heat has come out now,” Dr Petrie said

“We’re cutting down to the people who know what they’re doing in the space, and are keen to build it for the long term.”

Other local alternative meat companies to raise funding include All G Foods, Vow Foods, v2food, ProForm Foods and Fenn Foods.

Dr Petrie said the company was investing aggressively to bring its products to market as quickly as possible.

“This doesn’t give us anywhere near long enough runway for my comfort,” he said. “We are burning [cash] pretty quickly, but the reason we are is because the industry needs solutions quickly, because we’re seeing a plateau in the growth of plant protein and that’s not healthy.”

Horizons Ventures investor Chris Liu said perfecting alternative animal fats would be a “quantum leap” in taste and experience of alternative protein products.

“Nourish, with their science-led approach, are able to produce at scale, tailor-made, non-animal derived fats and oils that can match our expectations in taste and mouth feel,” he said.

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