Bio-food startup Cauldron secures $10.5m seed funding to bolster animal-free meat sector

Cauldron, an Australian company laying the foundation to bolster the production of animal-free dairy and meat products globally, has raised $10.5 million from two venture capital funds in one of the country’s largest seed rounds for a female-founded company. 

Australia’s Main Sequence and Hong Kong’s Horizon Ventures have backed Cauldron’s mission to build the Asia-Pacific region’s largest network of precision fermentation facilities that the company says will create new proteins, fats and fibres for multiple applications including food and medicine production.

Cauldron’s founder and CEO Michele Stansfield says the seed funding gives the company the funding to scale its pilot production facility at Orange in regional NSW, and prove the feasibility of new hubs in other parts of Australia.

“Humanity has spent thousands of years getting fermentation to work,” says Stansfield, who over the past decade has worked in the precision fermentation sector before founding Cauldron last year.

“With Cauldron’s revolutionary fermaculture platform, we are supercharging that process and unlocking the next evolution of how we produce food, feed and fibre globally.

“Our technology, 35 years of expertise, combined with Australia’s unique infrastructure and abundance of natural resources, will help ensure companies in this space can get new products and ingredients to market quickly, at lower cost and risk.”

Precision fermentation uses genetically engineered microorganisms, such as yeast, algae and bacteria, and cultivates them in brewery-style fermentation tanks to develop new ingredients, such as proteins, fats and fibres, for use in various products including animal-free milk and plant-based meats.

Precision fermentation offers food producers a fast-track to the fermentation process. Cauldron says the challenge for the sector to date has been the capital investment required to manufacture at scale and at a low cost.

Cauldron’s hyper-fermentation platform has been described as a breakthrough for the industry by optimising conditions for microorganisms and bacteria to create new ingredients.

Among Cauldron’s existing customers is Loam Bio, an Orange-based biotech that is using the company’s network to accelerate the production of the microbial technology used to capture and store carbon.

Cauldron is also working with Perth-based plastics alternative-manufacturer ULUU to scale up the manufacture of its products.

Long-term plans for Cauldron include the establishment of precision fermentation facilities in other parts of regional Australia, where it says it has access agricultural knowledge and feedstock.

Earlier this year, the company announced plans to establish a ‘Future Foods BioHub’ in Mackay after gaining the support of the Queensland Government through a $528,000 grant to develop a business case.

“The proposed $300 million facility will provide the anchor infrastructure Queensland needs to catalyse a new commercial-scale industry (and) complement the region’s agricultural and manufacturing strengths,” Minister for State Development Steven Miles said at the time of the announcement in January.

Main Sequence partner Phil Morle sees significant potential for Cauldron as a first mover in bringing scale to the industry which the CSIRO predicts could be worth $1.1 billion in Australia by 2030.

“If Australia doesn’t tackle this opportunity, others will,” Morle says.

“Precision fermentation is already a crucial part of medicines like insulin and many animal feeds but is often done at smaller scale and overseas. Cauldron will serve as a regional powerhouse for production to ensure Australia plays a part in the future of agriculture and other industries.”

Hong Kong’s Horizon Ventures has seized the opportunity to tap into Australia’s ‘unique advantages’ and natural resources that position the country as a potential market leader in bio-based manufacturing.

“Cauldron’s hyper-fermentation platform provides a supercharger in the quest for scalable precision fermentation without sacrificing cost and efficiency, particularly due to its easy access to abundant local feedstock supply alongside a carbon neutral production process,” Horizon Ventures’ Chris Liu says.

Cauldron is co-founded by David Kestenbaum, a former general partner at ZX Ventures which is the venture capital arm of global brewer AB InBev. Kestenbaum, who is Cauldron’s CFO, had previously led ZX Ventures’ investments in biotech and alternative protein.