In a year marked by significant growth, European alternative protein companies attracted nearly $509 million (€470 million) in investment during 2024, reflecting a 23% increase from the previous year. However, despite this surge, experts caution that the sector remains immature, with large funding rounds occasionally skewing the overall picture of progress.
The data, compiled by Net Zero Insights (NZI) and analysed by the Good Food Institute (GFI), highlights a promising trend in the alternative protein landscape, particularly in precision fermentation and biomass fermentation.
Companies focused on precision fermentation, which employs organisms like yeast to create ingredients that mimic the taste and texture of traditional animal products, raised approximately $130 million (€120 million) in 2024 – over three times the amount secured in 2023. Meanwhile, biomass fermentation firms garnered $129 million (€119 million), marking a 10% increase.
Investment in privately held plant-based companies, which dominate the European alternative protein ecosystem, rose by 37% to $181 million (€167 million). Notably, this figure excludes outlier deals, such as the $425 million (€391 million) investment in Swedish plant-based dairy company Oatly, which could misrepresent the sector's overall fundraising success.
Conversely, funding for cultivated meat products fell sharply, declining by 59% to $52 million (€48 million). This decrease can be attributed to the previous year's large deals that distorted the funding landscape. Companies that did secure significant funding in 2024 primarily focused on preparing for market entry.
Helene Grosshans, infrastructure investment manager at GFI Europe, commented on the mixed results: “It’s positive to see overall growth in investment during 2024. But these figures demonstrate that the region’s alternative protein ecosystem remains immature, with large individual deals such as those seen in 2023 still capable of skewing figures from one year to the next.
She continued: “It’s also encouraging that large funding bodies were behind some of last year’s most significant deals. Start-ups cannot rely on venture capital to build the plants needed to scale production, and to reap the benefits that protein diversification can offer, governments and organisations such as philanthropic foundations should develop innovative finance mechanisms to support this growing ecosystem.”
Key stats from the 2024 Alternative Protein Report
Total investment: $509 million (€470 million) raised by European alternative protein companies in 2024.
Precision fermentation funding: $130 million (€120 million), over three times the amount raised in 2023.
Biomass fermentation funding: $129 million (€119 million), a 10% increase from the previous year.
Plant-based companies investment: $181 million (€167 million), a 37% increase.
Cultivated meat funding: $52 million (€48 million), a 59% decline from 2023.
Consumer interest: Nearly 50% of consumers in Europe are open to trying precision fermentation-enabled products.
The report underscores the necessity for diverse funding mechanisms to support start-ups in scaling production. Grosshans emphasised that start-ups cannot solely depend on venture capital to build the infrastructure required for growth. She urged governments and philanthropic organisations to devise innovative financial solutions to bolster this emerging sector.
The 2024 'State of Alternative Proteins' report also outlines broader trends in the industry, including increasing consumer interest in alternative proteins driven by health, sustainability and taste considerations. Research indicates that nearly half of consumers in several European countries are open to trying precision fermentation-enabled products, but education remains key to unlocking this demand.
As the global demand for meat continues to rise, the alternative protein ecosystem is seen as a crucial component in diversifying food sources and mitigating environmental impacts. The World Bank has highlighted the potential of alternative proteins, ranking them as a top intervention for climate mitigation, with the ability to reduce greenhouse gas emissions significantly.
The report also notes the emergence of Asia as a potential leader in alternative protein innovation, with substantial government investments and a growing number of start-ups entering the market. Countries like Singapore are establishing themselves as hubs for research and development, creating opportunities for collaboration and commercialisation on a global scale.
While the investment figures for 2024 are encouraging, the European alternative protein sector faces challenges that must be addressed to ensure sustainable growth. The reliance on large funding rounds, coupled with an immature ecosystem, suggests that stakeholders must work collaboratively to build a robust framework for innovation and market entry.
