Subscribe to our newsletter to catch every headline.
The first cell-cultured hamburger — a five-ounce patty that cost more than $300,000 to produce — was made in 2013, and a slew of beef and poultry-based products were under development. "I said to myself, that's amazing technology," Cooperhouse said, "but the real home run, the holy grail, would be seafood."
Chris Somogyi, an entrepreneur in the audience that day, agreed. Before the year was out, Somogyi and Cooperhouse had teamed up with Chris Dammann to launch BlueNalu, a seafood-focused cell culture company. Since its founding in 2017, the San Diego-based company has become the first to create stable cell lines from a variety of fin fish. (Both Somogyi and Dammann have since left the company.)
The cell-based protein industry is booming. Dozens of startups trying to grow food in labs have formed in the United States in recent years, and they raised more money in the first quarter of 2020 — some $189 million — than in all previous years combined, according to the Good Food Institute, a nonprofit that advocates for alternative meats.
BlueNalu President + CEO Lou Cooperhouse
So far, only one company has made it to market: the U.S.-based start-up Eat Just received regulatory approval to sell it's cell-cultured chicken at a restaurant in Singapore in late 2020. One of the major obstacles for many companies has been cost, and most are still working to bring down the price of the raw materials, scale-up production and gain regulatory approval. A few more are expected to hit the market this year. By one estimate, as much as 35% of meat will be cultured by 2040, buoyed by efforts to reduce carbon emissions, antibiotic use and the risk of disease.
But to Cooperhouse, seafood, more than any other industry, is in need of a transformation: Overfishing has pushed fisheries around the globe to the brink of collapse. Ocean acidification, heat waves, plastic pollution, and more threaten the stocks that are left. Research suggests that as many as 60% of the marine species humans fish are at a high risk for extinction in the coming years. Yet demand continues to rise since at least the mid-20th century. According to the United Nations's Food and Agriculture Organization, the rise in global fish consumption since 1961 has outpaced both population growth and increases in production of other meat products.
"Our global supply gap is only getting worse, our supply is increasingly compromised with mercury and environmental pollutants and plastics, and we just can't feed the world," Cooperhouse said. But in cell culture technology, he saw an opportunity to create a stable supply of one of the world's most sought-after protein sources, easing pressure on our oceans and feeding the world at the same time.
In January, the 40-person company announced it had raised $60 million in debt financing led by Rage Capital, bringing its total fundraising up to more than $84 million. BlueNalu's other significant investors include New Crop Capital, Lewis & Clark Agrifood, Siddhi Capital, and Rich Products Corp. The latest round of funding is expected to see the company through the next two phases of its development, according to Cooperhouse: FDA approval, and the initial launch of its products in select restaurants in San Diego.
It's too soon to say which restaurants those will be.
After market testing in restaurants, BlueNalu plans to scale up production with the construction of more factories, creating jobs and providing consumers with a third option to farmed or wild caught fish.
Already, the company is building out its facility in San Diego. By the end of the year, it will be capable of producing several hundred pounds of cell-cultured fish per week.
The Good Food Institute, which has called on the Biden administration to allocate some $2 billion toward research and research facilities for alternative proteins, believes that the production of plant-based and cell-cultured meats "will spark a renaissance in American manufacturing."
BlueNalu fish
Critics of cell-cultured meat worry that the product could put farmers and fishermen out of work, but BlueNalu claims that it is carefully choosing its products with these issues in mind. Its first product to market will be mahi-mahi, a nod to the company's Hawaiian roots, and the most practical choice for a company that's trying not to compete with U.S. fisheries.
"We're specifically targeting seafood that are typically imported, that are high in mercury or other contaminants, or they can't be farm-raised at all," Cooperhouse said. A cell-cultured Bluefin tuna, a species that is both overfished and high in mercury, will follow. "The bottom line is there's a fundamental global supply chain gap. If we don't find another solution, we will be out of fish or it will be so high priced it will be unattainable."
The National Fisheries Institute, a nonprofit focused on seafood sustainability, is supportive of cell-cultured seafood as part of the solution. "As the global demand for seafood increases, so will the need for innovative solutions like cell-cultured products," an NFI spokesperson said by email.
The final challenge for the first cell-based fish company is marketing. To prepare for direct-to-consumer sales, BlueNalu worked with the Alliance for Meat, Poultry and Seafood and the NFI to agree on a term that would allow the public to distinguish between wild-caught, farmed and fish grown from fish cells: cell-cultured. The term can be used more broadly to distinguish proteins from animals, and those made from animal cells.
As CEO, Cooperhouse has worked to distance BlueNalu from earlier cell-cultured products presented to the public as meat grown in petri dishes. BlueNalu's facility is a food factory, he says, not a lab.
"We are first and foremost a food company," he said. "BlueNalu is a culinary driven company. We are making great-tasting seafood products with all the sensory benefits, all that you love about seafood, but without the mercury, microplastics or pollutants."
Lead Image by Ian Hurley.
Amazon's Jeff Wilke Is Betting on US Manufacturing — and LA
Former CEO of Amazon Consumer Worldwide Jeff Wilke has moved to Los Angeles part-time, where he is focused on investing in underrepresented founders and restoring American manufacturing prowess. We talked to him about what he learned about his time at Amazon and what's coming next.
What Warner Music's Partnerships with Wave and Genies Means
The musicians in Warner Music's roster will soon be able to more easily livestream their concerts, create avatars and sell digital merch — including NFTs — after the company inked partnerships with two L.A. entertainment startups: Genies and Wave. Is it a new era for digital music?
SCALE Aerospace's Accelerator Cohort
A jet designer that aims to make supersonic flight available to the masses, a durable 3-D printer maker and a company trying to improve post-disaster and space communication — all are among SCALE Aerospace Ventures' 2021 accelerator class. Get to know the new space startups in town.
Using Deepfake Technology for Movie Dubbing
Director Scott Mann began searching for a new way to dub films into other languages after watching his 2015 film "Heist" in German. Now, he's launched a new startup that uses AI and "deepfake" technology to make voice dubbing flawless — just as foreign box offices are becoming more important than ever for Hollywood.
Stripe for Cannabis Companies
Bespoke Financial has been lending to legal cannabis businesses, but it has much bigger ambitions. After an $8 million raise, the L.A.-based company is developing software to streamline point of sale systems for a tricky industry.
EV Charging Comes to LA's Ports
Volkswagen has been installing fast electric vehicle charging stations across California. Its Electrify America subsidiary — born out of the settlement from VW's 2015 emissions scandal — has pledged $25 million to help electrify the trucking industry at the ports of L.A. and Long Beach.
The Honest Co's Very Good Day
Jessica Alba's The Honest Company made a strong debut in its first day of public trading. Its stock—trading under HNST — closed up 43% from its opening price, before losing steam later in the week. Honest has never made a profit but saw gross margins soar by 35.9% last year as the pandemic drove sales of sanitizing products.
Startup of the Week: Kajabi
Kajabi is a subscription service designed for content creators and "knowledge entrepreneurs" building businesses online. The startup offers digital tools to build websites, newsletters, online courses and membership programs. On Tuesday, the Irvine-based company closed a $550 million round valuing it at $2 billion.
Weekly Graphic: The Decline of Pay TV
Ryff, a stealthy L.A.-based startup founded in 2018, has been using gaming technology to develop a method for product placement in film and TV. The company sees itself poised to ride the wave of non-pay streaming services by offering them a means of generating ad-based revenue.
The approximately 50 guests had their temperatures checked at the entrance and could choose to affix a bright "I Got Vaccinated" sticker to their wardrobe, which most did.
Elbow bumps replaced handshakes and everything took place outside on an overcast and unusually cool night. But otherwise, the occasion seemed remarkably normal – with only servers, bartenders and valets wearing masks.
"We felt like it was the right time," said Derek Norton, managing general partner of Watertower Ventures, the early stage fund that hosted the event. "We definitely wanted to be on the forefront and be the first to get everybody back, because this is a community and it's a community of friends that are investors and collaborators."
"We felt like it was the right time," said Derek Norton, managing general partner of Watertower Ventures, the early stage fund that hosted the event.
Guests sipped on Aperol spritzes and wolfed down freshly baked margarita pizza from Toscana – the theme of the evening was "A Taste of Italy."
"Since most of us won't be traveling to Europe this summer, we thought we'd bring Italy here," Norton explained.
The crowd included a who's who of the L.A. venture scene, including Bonfire's Mark Mullen, Crosscut's Brian Garrett, MaC VC's Marlon Nichols, East West Ventures' Jaeson Ma, TenOneTen's Minnie Ingersoll, Watertower's Jeremy Milken and Science Inc's Peter Pham, who bounced from group to group wearing silent disco headphones and sipping on the Liquid Death canned water he incubated.
Guests sipped on aperol spritzes and wolfed down freshly baked margarita pizza from Toscana – the theme of the evening was "A Taste of Italy."
The mood seemed positively giddy, thanks to a welcome return to normalcy and the fact that for all the hardship of the past year these have been heady times for tech – with record amounts of deals, new unicorns crowned and IPO's popping off seemingly every week.
More than one VC remarked that they have never seen such a crazy time in the industry, with even the most far-fetched of business plans able to secure gobs of capital.
For all of the pleasantries and talk about how kids were doing, the event was far by no means purely social. This is an industry after all with no shortage of extraverts which normally revolves around schmoozing and handshakes.
"There are definitely deals and business being talked about tonight," said Norton. "We have tons of stuff to catch up on."
Los Angeles County had reached the least-restrictive "yellow tier" the day before, allowing bars to reopen and indoor stores to increase their capacity. Still, COVID remains a threat; an average 63 people in the county are dying each day.
- The Fund Launches a Venture Capital Firm in Los Angeles - dot.LA ›
- Los Angeles Venture Capital Activity Was Up in Q3 - dot.LA ›
- Here Are Los Angeles' Top Venture Capitalists - dot.LA ›