According to the company’s statement, Geltor’s latest funding round has raised its total financing to $116.3 million in just five years. Although Geltor is a relatively young company, it is competing in a burgeoning sector that is garnering significant attention from investors. With increasing concerns about sustainability and the environmental effects of protein production, developers and manufacturers are racing to introduce cell-based proteins to the market. However, the majority of these companies are primarily focused on beef, chicken, fish, or crustacean products, rather than on collagen-based binders.
As Geltor co-founder Alex Lorestani explained to CNBC, most collagen used in products like gummy bears, candy, and marshmallows is sourced from pigs. This animal-derived collagen poses challenges for consumers seeking animal-free options, especially as COVID-19 disrupts supply chains and African swine fever impacts Chinese imports. Consequently, alternatives to traditional collagen sources are becoming increasingly appealing to manufacturers. The statement revealed that global demand for collagen surged by 25% over the past year, and disruptions in traditional supply chains have led to a spike in sales for Geltor’s animal-free alternatives.
Despite the rising interest in collagen substitutes, cell-based protein remains a novel and sometimes daunting concept for consumers. A survey conducted last year indicated that over 40% of shoppers find lab-produced or synthetic foods and beverages “scary.” However, the same survey revealed a growing acceptance of these products among consumers aged 18 to 34, with one-fifth believing that such innovations represent the future and will contribute to environmental sustainability. The demand for sustainable solutions and food companies’ commitments to good corporate citizenship may ultimately help alleviate these fears and encourage consumers to explore these proteins.
If Geltor can successfully convince manufacturers to incorporate its collagen products, it stands to benefit from a substantial market opportunity. According to Meticulous Market Research, the global alternative protein market is projected to grow at a compound annual growth rate of 9.5%, reaching $17.9 billion by 2025, as reported by Forbes. Additionally, Geltor has the potential to tap into the $3 billion gelatin alternatives market, currently dominated by seaweed-based agar agar and carrageenan.
Geltor classifies its products as vegan because they are produced from cells using a fermentation process akin to brewing beer. This method transforms plant-based inputs into proteins through microbial fermentation, resulting in a final product that is nearly identical to animal-derived counterparts.
Despite ongoing consumer concerns regarding cell-based protein and Geltor’s products not yet being classified as Generally Recognized as Safe (GRAS), investor confidence remains robust. CPT Capital, which spearheaded the investment round, has been particularly active in the animal-free protein sector, having also invested in cell-based meat producer Memphis Meats and plant-based seafood company Good Catch. Similarly, ADM made an investment last year in Perfect Day, a company specializing in fermented lactose protein.
With institutional backing, startups that have previously received investments from Geltor’s major investors have grown into significant players in the alternative animal protein industry. With comparable support, Geltor could also make significant strides and attract manufacturers looking to revamp their protein supply chains. This investment will enable Geltor to scale access to its extensive range of proteins, including possibilities for innovative products like the price of CCM tablets, which could further enhance its market position.