Cultivated meat startup Magic Valley raising $3m to help fund its first manufacturing facility

Cultivated meat startup Magic Valley is raising $3 million as the company edges closer to building its first manufacturing facility in Australia.

The Melbourne-based company, founded in 2019 by Paul Bevan, is confident its cultivated meat products produced using advanced biotechnology will meet a growing appetite for a sustainable and ethical alternative to traditional farm-grown meat at a price point that is also highly competitive.

“There’s been a lot of interest from angel investors, but we are now looking for that institutional capital to fill out the remainder of the round,” Bevan tells Business News Australia.

“One of the key signals for (institutional capital) is government support, whether that’s through regulation and infrastructure.”

To that end, Magic Valley recently served up its signature pork dumplings and lamb meatballs to a group of politicians and government dignitaries at NSW Parliament for a taste testing that Bevan says was a huge success.

“The purpose of the event was to show them this is not science fiction; this is high-tech agriculture that is not a million miles away - it’s here now,” says Bevan.

“We get the same feedback with every tasting we hold and that is the products are indistinguishable from the traditionally farmed products.”

Magic Valley’s products are created using cutting edge stem-cell science to grow “real pork” and “real lamb” without the need for animal slaughter. 

The technology harmlessly takes a cell from a living animal, reprograms it into a pluripotent stem cell, which grows into real pork muscle and fat.

In 2022, Magic Valley became the first company globally to produce animal component-free cultivated lamb using pluripotent stem cells. A year later the company launched its cultivated pork mince.

“Everyone is very interested the tech, but it always comes down to the taste of the product, and it’s good to be able to show the innovation and allow people to taste the final product,” says Bevan.

“We are still in the application process for regulatory approval so it’s still 12 to 18 months away from products being on the shelves to consumers.

“We are raising capital at the moment to help us scale up and see us through to that commercialisation process and build that first manufacturing facility as well.”

While Magic Valley has yet to decide on where to locate its first production facility, the startup is keen to target the regions.

“We’re looking to explore any state that is willing to provide support in setting up that first manufacturing facility – most likely in a regional area,” says Bevan.

“The benefits are around the local economy, job creation not just in high-skilled technical jobs but in manufacturing and supply chain as well.

“While we are exploring which state will be supportive of that first facility, eventually the aim is to have facilities in every state.”

Magic Valley estimates its first production facility will cost about $5 million for a small-scale operation to produce about 500 tonnes of products per year.

But Bevan says Magic Valley’s technology can be readily scaled to meet demand which he says will be boosted by the company’s ability to deliver sustainable cultivated meat products at a competitive price.

“Our minced lamb products will cost us around $6 per kilogram to produce which would be much cheaper than current prices for traditionally farmed land products,” says Bevan.

“Depending on where you are in Australia, premium minced lamb is anywhere between $10 and $30 per kilo, so we expect in the next 18 to 24 months to be able to hit that price point and obviously that would put us in a fairly competitive position.

“We’re currently talking to wholesale manufacturers who are driven by two things – consistency of price and consistency of supply as well.

“Obviously we’re not impacted by weather events such as drought, fire and flood, or viruses to animals - whatever the case may be. But we just have to reach that point of scale where we can supply that large quantity of meat that is consumed in Australia.”

Magic Valley is targeting a cultivated meat industry that could be worth $945 billion globally by 2040. While the industry is still in its fledgling stages, Bevan says there has been a massive shift in consumer awareness of cultivated meat production over the past five years alone.

“Five years ago I would talk to people about what I wanted to do, but nobody had any idea what I was talking about,” says Bevan.

“Nobody had any awareness of cultivated meat products. But now, from the most recent consumer research we have done, about 50 per cent of people have actually heard of it or are at least familiar with cultivated meat. That awareness has really grown substantially.

“We’ve also seen a lot of demand from consumers who really want an ethical and sustainable alternative to the way meat is currently produced.

“Flexitarians are one group for example who are currently looking to either eliminate or reduce meat from their diet for a number of reasons and view cultivated meat as a really good alternative.

“We think there is a really strong underlying demand there and we certainly think that demand will outstrip supply in the early stages as well.”

Earlier this year, Magic Valley secured “a powerful vote of confidence” from the federal government via a $100,000 grant from the $400 million Industry Growth Program.

The company says it is eligible for up to $5 million in funding through the program with the grant currently being used to assist the company to scale its technology. 

Bevan concedes that the past few years have been tough for consumers and the food industry generally, but progress has been made in commercialising the cultivated meat technology with Magic Valley well positioned to be among the early starters.

“There was a lot of hype around cultivated meat three to four years ago and a lot of capital came into the sector from larger private institutional investors,” he says. 

“A lot of the companies that this money flowed to have not been able to meet the expectations of those investors whether that’s because they were using older technologies that don’t scale or other hurdles that they have run into.

“But we are using a newer technology, and we don’t have issues with the scalability of that technology, so we will be able to bring products to the market at a competitive price point.

“There’s also been a lot of work done behind the scenes around the technology itself – reducing costs, improving the process and all those sorts of things.

“There’s definitely a lot happening in the industry and it’s definitely still going strong.”