Meati Raises $100M, Locks In Kroger Deal As ‘Path to Profitability’ Accelerates

Meati announced a trio of big moves today, headlined by the closing of a $100 million investment led by Grosvenor Food & AgTech along with existing investors Prelude Ventures, BOND, Revolution Growth and Congruent.

The news is accompanied by a new distribution agreement that will bring three of Meati’s mycelium-based alt-meat products to 2,000 Kroger doors nationwide. Additionally, the company shared that co-founder and chief innovation officer Tyler Huggins has moved into an advisory role, passing day-to-day duties off to recently appointed CEO Phil Graves.

“When Justin Whiteley and I founded Meati, we set out to harness the power of nature to make awesome products that were a positive force for good in the world,” said Huggins. “It’s inspiring to see how far we’ve come in a short period of time, and I’m ready to pass the day-to-day running of the company to Phil Graves and the leadership team to take it to the next level.”

As for that next level, Graves said Meati will use the new capital to maintain its “high growth momentum” and continue scaling in U.S. retail. The new agreement with Kroger will expand access for its Classic cutlet as well as its Classic and Carne Asada steaks to both Kroger flagship and banner stores including Ralphs, Mariano’s, City Market, King Soopers, Dillons and others.

Those gains bring Meati to 6,000 stores nationwide in just over a year since its retail launch. The Boulder-based company also sells a Crispy Cutlet product, and its offerings are available at Super Target, Whole Foods Market, Sprouts Farmers Market, Meijer and Wegmans. Meati claims that nearly 40% of its customers have chosen its products as their first plant-based meat alternative purchase and said it sees a repeat purchase rate of “as high as 60%.”

In addition to continuing to grow the business, Graves said Meati will also use the new funds to keep building awareness for its MushroomRoot ingredient, primarily working to share how it’s differentiated from other plant-based meats available on the market. The company has a stacked roster of celebrity investors it could also tap in support of those efforts, including former Olympian Aly Raisman and NBA All-Star Chris Paul, who joined in December.

“Compared to a traditional steak, creating MushroomRoot uses 89% less water and has an 88% lower carbon footprint,” Graves said. “From a health perspective, Meati is a front runner in the alternative protein space – we’re a super food, a whole food protein free from saturated fats and cholesterol that provides significant daily fiber and nutrients.”

Meati has also garnered support from MLB Hall of Famer Derek Jeter, chef and restaurateur Tom Colicchio, TV personality Rachael Ray, and Sweetgreen co-founders Nicolas Jammet and Jonathan Neman.

But those gains haven’t come without compromise. While the company has raised upwards of $365 million in the seven years since it was founded, it has also conducted three rounds of layoffs in the past twelve months alone.

Meati last raised $50 million in September and subsequently laid off 10% of its employees, telling Nosh at the time the funds would be used as an “economic cushion.” Graves elaborated today that the funds were primarily used to finish construction on its Colorado-based “Mega Ranch” production facility. The company also closed its pilot manufacturing plant during that time.

In February, Meati hired Graves as the company’s CFO, and just two weeks later, he was promoted to CEO. That change was made so that Graves could help “right size” the company, a spokesperson told Nosh at that time, which included laying off 13% of its workforce as it made another push towards profitability. According to Graves, those efforts are now showing returns.

“The actions we’ve taken have reduced our burn rate by 40% and have significantly accelerated our path to profitability,” he said. “Specific measures include streamlining our operations, eliminating unnecessary ingredients, reducing waste and moving away from temp labor.”

Graves said he anticipates no further changes to the team following this latest capital raise. He believes the company is in the right place to continue to grow and cited his time at Patagonia, where he helped establish and run the outdoor company’s corporate venture fund and analyzed over 3,000 companies that applied for funding.

“From my experience, I can confidently say there is no company more sustainable and scalable than Meati,” Graves emphasized. “Our MushroomRoot can produce the equivalent of hundreds of cows’ protein in just a few days from only a tablespoon of spores… Meati is truly unique and is poised to change the alternative protein industry.”