A first-of-its kind report released today by The Good Food Institute (GFI) reveals that globally, 2019 and the first seven months of 2020 were record periods of investment in fermentation companies creating sustainable alternatives to conventional animal-based foods and ingredients. 

GFI’s fermentation state of the industry report is the first-ever analysis of the significant role and potential of microbial fermentation as a third pillar of the alternative protein industry, alongside plant-based proteins and cultivated meat. 

Fermentation—the use of microbes such as microalgae and mycoprotein—can be used to produce protein biomass, improve plant proteins, and create paradigm-changing functional ingredients, such as Impossible Foods’ heme. Fermentation technology is delivering a new wave of tasty, high-quality, sustainable, and efficiently-produced meat, egg, and dairy products. 

GFI’s report analyzes investment activity in the industry and shows that globally, fermentation companies devoted to alternative proteins received more than $274 million in venture capital funding in 2019 and over 58% more in just the first seven months of 2020, $435 million—even as Covid-19 disrupted global markets. 

Fermentation companies focused on alternative proteins have raised more than $837 million in venture capital funding, starting with the first GFI-tracked investment in 2013. Eighty-five percent of this funding was raised in 2019 and in the first seven months of 2020 alone. The $274 million raised in 2019 is nearly five times the capital raised in 2018 and more than three times the capital raised in 2016 and 2017 combined.

Investors in the space include Bill Gates-backed Breakthrough Energy Ventures, Temasek, Horizons Ventures, CPP Investment Board, Louis Dreyfus Co., Bunge Ventures, Kellogg, ADM Capital, Danone, Kraft Heinz, Mars, Tyson, SOSV, Viking Global, Thiel Capital, Generation Investment Management, Mayfield Fund, and Techstars.  

Globally in 2019, fermentation companies raised 3.5 times more capital than cultivated meat companies worldwide and almost 60% as much as U.S. plant-based meat, egg, and dairy companies. Collectively, these alternative protein companies raised $820 billion in 2019. They raised a further $1.5 billion in the first seven months of 2020, which is 80% more than the 2019 full-year investment total. Investments in 2020 included the fermentation industry’s largest ever raise, Perfect Day’s $300 million Series C.
The fermentation-derived alternative protein industry goes back as far as 1985 when Quorn became its first commercial player. Quorn is now joined by a growing field of competitors. By mid-year 2020, 44 fermentation companies focused on alternative proteins had formed around the globe, and almost half are U.S.-based. Twenty-one of these 44 companies launched in 2019 and the first seven months of 2020 alone. This is a 91% increase from 23 companies in 2018. 
Several of the world’s largest food and life science companies, including DuPont, Novozymes, and DSM, are also developing fermentation-derived product lines and solutions tailored to the alternative protein industry. Even JBS, the world’s largest meat company, is leveraging fermentation for alternative proteins through their new and mostly plant-based brand, Planterra Foods. 

In addition to analyzing investment activity, GFI’s fermentation state of the industry report showcases the industry’s competitive landscape and production methods for the three key applications of fermentation in alternative proteins—traditional fermentation, biomass fermentation, and precision fermentation—as well as opportunities for technology development and cost reduction.

“Fermentation is powering a new wave of alternative protein products with huge potential for improving flavor, sustainability, and production efficiency,” says GFI Associate Director of Science and Technology Dr. Liz Specht. “Investors and innovators are recognizing this market potential, leading to a surge of activity in fermentation as an enabling platform for the alternative protein industry as a whole. And this is just the beginning: The opportunity landscape for technology development is completely untapped in this area. Many alternative protein products of the future will harness the plethora of protein production methods now available, with the option of leveraging combinations of proteins derived from plants, animal cell culture, and microbial fermentation.” 

Here are additional executive insights: 

GFI Executive Director Bruce Friedrich: “Fermentation’s ability to efficiently produce protein could help feed the world, significantly alleviating global malnutrition. Fermentation could enable companies to meet the growing demand for high-quality protein at a cost that is competitive with or lower than that of animal products. Microbes and fermented plant proteins can also provide the sensory experiences and full nutritional profiles of animal products but without the range of external costs that come with industrial animal production, from massive contributions to climate change to growing antibiotic resistance and zoonotic diseases.”

CPT Capital Investor Rosie Wardle: “Given the breadth of applications, we believe that fermentation could solve many current challenges faced by alternative proteins. On the one hand, biomass fermentation can create nutritious, clean protein in a highly efficient and low-cost way. On the other hand, the potential for precision fermentation to produce value-added, highly functional, and nutritious ingredients is very exciting and could revolutionize the plant-based category. From an investment perspective, we are very excited about the white space opportunities in this category, and we are actively looking to increase our investments in the space. This new report from GFI is the first comprehensive overview of fermentation for alternative protein applications and should be required reading for everyone who wants to create a more efficient and less harmful global food system.”

Perfect Day CEO and Co-founder Ryan Pandya: “We use fermentation to make the foods people love while delivering the same taste, texture, and nutrition as conventional dairy without the environmental, food safety, or welfare concerns. But that’s just the start. By working with food and dairy companies to bring a new category of animal-free products to market, we’re building a next generation supply chain to provide more nutritious, scalable options globally.”

Nature’s Fynd CEO Thomas Jonas: “Fermentation is rapidly becoming the number one technology in terms of investments towards new proteins. Fundamentally, the rationale is simple: Fermentation is just more efficient, and markets hate inefficiencies.”


To quantify this investment activity, GFI used the PitchBook financial data platform to conduct a custom analysis of global investments in alternative protein companies using fermentation. 2019 data pertains to the 52-week period ending December 31, 2019. 2020 data pertains to the 30-week period ending July 15, 2020. 

About The Good Food Institute

The Good Food Institute is an international nonprofit building a sustainable, healthy, and just global food system. With unique insight across the scientific, policy, industry, and investment landscapes, we are using the power of food innovation and markets to accelerate the transition of the world’s food system toward alternative proteins. GFI is funded entirely by private philanthropic support.