Upside Foods IPO: FDA-Approved Cultivated Meat Company

Overview:

• Upside Foods is a cultivated meat company that received FDA approval for its lab-grown chicken.
• The company raised $400 million in funding, valuing it at over $1 billion.
• There are rumors of an upcoming IPO, but there are no concrete plans as of yet.
• Upside Foods' goal is to produce sustainable and ethical meat products using lab-grown animal cells, its up against companies like Mosa Meat and Aleph Farms.

What you need to know about Upside Foods

Upside Foods is a food technology company that produces cultivated meat, poultry and seafood using animal cells. This means its products aren't vegan or vegetarian. But it does mean they can create animal products without having to raise and slaughter animals. A win for animal rights and the environment.

They were the first food technology company in the world to receive a “no questions” letter from the FDA. Why is this a big deal? A “no questions” letter is an official statement from the FDA that recognizes that an ingredient is permitted for use.

This was a huge win for the company because it signaled that regulators had found nothing unsafe about the company's cultured food products.

Upside Foods isn't in the clear just yet. Before it can launch its products it still needs to pass an inspection from the US Department of Agriculture (USDA). According to Upside Foods COO Amy Chen, once they get the green light from USDA it will be a “matter of weeks or months” before their products hit the market.

Is Upside Foods ready for an IPO?

At the time of writing (June 2023), Upside Foods has not made any public plans or statements regarding a potential IPO.

Upside Foods raised $400 million in a funding round led by Temasek and Abu Dhabi Growth Fund in April 2022. This is the largest funding round in the cultivated meat industry to date, and it values Upside Foods at over $1 billion.

This valuation is impressive, especially considering Beyond Meat ($BYND) who IPO'd in 2019 is currently trading at $13.94 per share at a $895m valuation. In saying that, Upside Foods is still a relatively small player (in terms of market captialization) when compared to other “meat” stocks. For example, Tyson Foods is valued around $17 billion and JBS S.A another meat giant is valued around $8 billion. It's clear there's still plenty of upside left for Upside Foods (see what I did there?).

Aside from its FDA approval and record funding round, Upside Foods still has plenty going for it. They also opened the largest production facility for cultivated meat in North America. Capable of producing 50,000 pounds of cultivated per year.

Who founded Upside Foods?

Upside Foods was founded by Uma Valeti, Nicholas Genovese, and Will Clem in 2015.

Let's start with Uma Valeti, the CEO, a man of many hats – a former cardiologist, a professor, and now leading one of the biggest food tech companies in the world. With a laser-like focus on sustainable food tech, his mission at Upside Foods is to create meat alternatives that's both good for us and the planet. Valeti is clearly bullish on the industry as he also invested several food tech companies. His aim? To lead the development of a future food system that's profitable and positive for the world​.

Next up, we have Nicholas Genovese, the Chief Sales Officer (CSO). Genovese also has an eclectic but impressive background. He's done everything from raising poultry on his family's farm, to his industrial experience as a bioprocess technician, he even has a scientific background in cancer biology and livestock stem cell cultivation. With this unique set of experiences its clear why Genovese plays a key role at Upside Foods.

Will Clem was recruited as a co-founder for Upside Foods back in 2015 as part of the R&D team. Will's technical background is impressive. He holds an undergrad biochemistry degree from Lipscomb University, a master's in biomedical engineering from the University of Michigan, and a PhD in biomed engineering from the University of Alabama. Clem also went on to co-found another food related startup, Bite Ninja which was part of the Y Combinator Summer 2021 cohort. Bite Ninja landed $11.3m in funding in May 2022. According to Clem's LinkedIn profile he still has his role as a co-founder at Upside Foods.

What’s the market saying about the Upside Foods IPO?

The company hasn't made any official announcements yet, but there's been a lot of chatter in the investment community.

Some analysts believe that the company could be valued at $10 billion or more. Others are more cautious, noting that the cultivated meat industry is still in its early stages.

It's still too early to say when Upside Foods will actually go public. Market conditions haven't been enticing for most companies to go public. There have only been 68 IPOs on the US stock market so far in 2023. As of Jun 13, 2023, this is nearly half the amount of IPOs when compared to the same time period in 2022, which had 119 IPOs by this date.

How does Upside Foods make money?

Upside Foods' products are still in the research and development phase. Once this is complete it will move into the commercialization phase where they plan to sell their cell-cultured chicken as their first product.

Despite all the hype around a potential Upside Foods IPO there are still question marks on how much profit the company will be able to generate (or generate profits at all). For one, its still waiting on the green light from U.S. regulatory agencies, which remains a big if​​. There's also the looming question of cost – while Upside has made strides in reducing production costs, their cultured chicken won't exactly be cheap when it first hits the market.

Upside's success could hinge on their ability to scale production and deliver on their promise of sustainable and ethical meat alternatives. It's a business model that's big on potential, but also comes with plenty of uncertainty. And let's not forget the competition – they're not the only player in town, with numerous startups racing to bring their own plant-based and cell-cultivated protein alternatives to market​.

Who is Upside Foods’ competition?

The competition in the cultivated meat sector, also known as “cell-based” or “lab-grown” meat is intense. Upside Foods are up against other key players such as Mosa Meat, Aleph Farms, and Meatable. These companies are all aiming to bring cell-based meat to our dinner tables, and there's no doubt it's a race to see who gets there first​.

There's also a wave of competition not just from within the cultivated meat sector, but also from plant-based protein companies. Think Beyond Meat, Impossible Foods, and the like. They're offering consumers an alternative option to traditional meat without the need for, well, actual meat. They're changing what it means to enjoy a burger (without the cow), and that's something Upside Foods will need to compete with.

And then there are the shared challenges that all these companies face: cost, scale, and regulatory approval. It's one thing to grow meat in a lab, but another to do it at a scale and price that makes it competitive with traditional farming. And let's not forget that they'll need to get the regulatory green light too. There's a lot of optimism, but these obstacles are real and present for all the players in this market​​.

Frequently Asked Questions