Embattled alternative protein firm Meati Foods is set to sell for just $4M after an unprecedented financial crisis that turned the business on its head.
Two months after a bank swept most of its cash reserves in an unexpected move, Colorado-based mycelium meat maker Meati Foods is preparing for a sale worth $4M.
The deal was disclosed in filings to the Adams County District Court on May 2, with CEO Phil Graves assigning the firm’s assets to attorney Aaron Garber. It’s expected to be sold to a new company called Meati Holdings, though the filing did not provide any other information about the buyer, according to BusinessDen, which first reported the news.
Garber wrote that the $4M sale would “preserve the operational value of the company, maximise recovery for creditors, and reduce collateral damage to stakeholders and interested parties when compared to a liquidation”.
Meati, which listed $158M in assets, has asked a judge to allow the buyer to run the company even before the sale closes. It is unclear how this affects its employees and facilities. Meati declined to comment when approached by Green Queen.
The $4M valuation is far below its $650M valuation in the $150M Series C funding round in 2022. Last year, the firm added another $100M via a Series C1 round, and was an outlier in an otherwise dire investment landscape for alternative proteins.
How Meati got to this point
At the beginning of this year, Meati was cruising. It had raised the largest round in the industry in 2024, doubled its revenue, and expanded its retail distribution by 130%, with its mycelium steak, chicken and breakfast patty SKUs in over 7,000 stores.
In late February, its lender swept away two-thirds of its cash reserves due to a technical default, despite assuring Meati that it wouldn’t. Meati was in the middle of an internal fundraising round that would have extended its runway into 2026; while the company was current on its payments, it had breached a financial agreement relating to revenue and gross profit.
This legally forced the firm to issue a Worker Adjustment and Retraining Notification (WARN), informing all 150 employees of impending layoffs if immediate funding isn’t secured.
The notice suggested that should Meati fail to raise the capital it needed by May 6, it would cease operations at its manufacturing facility in Thornton, Colorado and permanently cut all jobs at the site, all the way from the warehouse and food production technicians to the R&D team and the CEO.
“Our lender unexpectedly removed cash from our accounts and took control of remaining cash reserves […] and the action was not reasonably foreseeable,” Meati’s WARN document read. “We would have liked to have given you more advance notice of this action, but we were unable to do so because our lender’s actions were wholly unanticipated and unforeseeable.”
Meati had been hopeful of securing the required investment. And this Monday, AgFunderNews reported that Meati had secured bridge funding that would allow it to continue operating for the time being.
Now, a judge is set to rule on Meati’s request, which, if approved, would give Garber control of its actions until the sale closes.
Uncertainty plagues alternative protein space
Meati’s impending sale comes at a curious time for alternative protein. Global investment in the sector declined by 27% in 2024; plant-based food (-64%) and cultivated meat (-40%) startups took most of the hit.
Fermentation startups, however, saw a 43% hike, surpassing the plant-based category for the first time. This was led by Meati’s $100M round. The company is actually one of the most well-capitalised in the industry, having raised $365M since being founded in 2017.
It has had its fair share of troubles. It has conducted multiple rounds of layoffs since 2023 – with the latest described as a right-sizing move to move the company towards profitability – and has been involved in an IP dispute and false marketing lawsuits over the last few years.
While meat alternatives also saw a 7% dip in sales in the US last year, Meati bucked the trend. Circana data for the 52 weeks to July 14, 2024 showed slowing sales of meat analogues, but Meati’s whole-cut steak was among the top 15 growth items. The company saw a $2.7M hike in year-to-date sales, thanks in large part to its all-natural ingredient list.
“Consumers shouldn’t have to decide between feedlot meats that are inhumanely raised, wreck the environment and lack nutrients, or ultra-processed plant-based options that have a long list of ingredients you can’t pronounce,” Graves told Green Queen in January.
Alternative proteins are a polarising topic in the US, where the discourse around ultra-processed food and Robert F Kennedy Jr’s Make America Healthy Again movement has dovetailed with a cultural shift back towards beef, despite its health and environmental detriments.
As an established leader in the space attempting to decarbonise the food system, Meati’s impending sale is unfortunate and a further example of the uncertainty enveloping the sector.
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