- On Monday, alternative protein startup Geltor announced it raised $91.3 million in Series B funding led by CPT Capital with participation from WTT Investment.
- The startup offers what it calls "ingredients-as-a-service" by sustainably producing proteins like collagen without using animals, and selling those ingredients to end-producers to make things like skin cream or vegan leather goods.
- Cofounder and CEO Alex Lorestani told Business Insider that he didn't have a clear picture of how venture capital worked prior to joining Silicon Valley biotech accelerator IndieBio.
- According to Lorestani, factory-produced proteins like those from Geltor help supply chains become more resilient; he pointed to the United States' potential meat shortage after processing plants were linked to local coronavirus outbreaks.
- See the pitch deck Lorestani used to win over investors even after the pandemic had struck.
- Click here for more BI Prime stories.
The coronavirus pandemic has upended the world's protein supply chain. Meat processing plants across the US have been tied to local outbreaks, and animal-based protein ingredients like collagen are at sky-high prices while China's pig farms come back online.
But a California-based startup says it's found the key to a new, pandemic-proof supply chain. Instead of relying on animals for proteins, both edible and not, Geltor bio-designs proteins like collagen in a lab and then sells the completed, factory-made products to end-point manufacturers for things like skin cream or non-animal leather goods in what the company calls an "ingredients-as-a-service" model.
On Monday, Geltor announced it raised $91.3 million in a Series B funding round led by CPT Capital with participation from WTT Investment at an undisclosed valuation. The IndieBio accelerator alum plans to hire aggressively. The staff count was 30 in January, and the company plans to add nearly 50 people by December. Geltor also aims to meet customer demand for new protein ingredients outside its current suite of products, according to cofounder and CEO Alex Lorestani.
"I think there is a very real sense that we are running out of time to make an impact on the environmental changes that are happening because of the way things work today," Lorestani told Business Insider. "Five years from now, success looks like flipping the use of unsustainable sources of protein to Geltor-powered sources."
As first-time founders, Lorestani and CTO Nick Ouzounov are still largely navigating the fundraising landscape without much of a map to speak of. The pair moved from Princeton University, where they met and originally came up with the idea for Geltor, to Silicon Valley-based biotech accelerator IndieBio, where they learned the in's and out's of fundraising for a deeply technical, science-based company.
"When we first got started, Nick and I really didn't know what venture capital was because we were starting a business for the first time," Lorestani said. "IndieBio was the only opportunity that we could identify to give our idea a shot. Then what we started doing as we learned more and more about how capital markets worked, we tried to understand who is seriously investing in this space, and the group that got our seed financing off the ground was a group that's colloquially called 'The Vegan Mafia.' "
But over time, Geltor's business made more sense to larger groups of investors, Lorestani said. Many investors are still interested in backing sustainability startups as part of larger environmentally-focused missions, but the pandemic's impact on protein supplies around the world has opened up opportunities beyond the animal rights and sustainability communities.
"In the last decade, 75% of new human pathogens have all come from animals," CPT Capital investment director Costa Yiannoulis told Business Insider. "The way we produce and use animals is going to start causing a problem. Globalization is great but actually, for certain things, you cannot have your supply chain halfway across the world when it comes to physical survival."
See the pitch deck Geltor used to raise $91.3 million in Series B funding from top global investors right before the pandemic proved out their total addressable market.
Source: Read Full Article