A Jerusalem-based food tech startup has set its sights on the sea scallops market, a high-end segment of the $100 billion global seafood industry, with cellular agriculture technology that will produce cultivated scallops made from cells.
Mermade Seafoods was founded in 2021 by Daniel Einhorn, who serves as CEO, CTO Dr. Rotem Kadir, an embryologist and microbiologist, and Dr. Tomer Halevy, COO and a biologist with a background in stem cell derivation and culturing. On Monday, the company announced a $3.3 million seed round with investors OurCrowd, US VC fund Fall Line Capital, and Dutch investor Sake Bosch, among others.
The company says its work will “make it possible to streamline the global scallop market and provide a high-quality, tasty product at prices far lower than what is currently available.”
Fresh scallops are among the pricier menu items in upscale eateries, and can cost between $15-$40 per pound in fresh fish markets in the US. The harvest of scallops fluctuates and most production comes from aquaculture (fish farming) due to increased demand and limited supply.
While cultivated meat and chicken products are well on their way in the commercial development process, cultivated fish and seafood technologies are still nascent.
Mermade says it developed a novel method using micro-algae to help grow the cells needed to make the cultivated scallops, in a “circular method of production” that will make the production and end result cost-effective and high in nutritional value. It is a take on aquaponics — a combination of fish and plant production — the company calls “cytoponics” and for which it has filed several patent applications.
The method recycles the bio-waste produced by cell-cultured products to feed algae, which is then used as the growth media — a mixture of nutrients and other substances that support the growth of microorganisms — to feed the cells.
The tactic is not limited to seafood and could be used in a wide variety of cell-based applications, including pharmaceuticals, the company says though its first product will be scallop.
“We decided to focus on scallop as our first product, since it’s a popular dish all over the world, but one that suffers from high prices and shortages due to serious supply chain problems,” said Einhorn in a company statement. “It’s easier to produce in comparison with other more complex meat products, and we can bring it to market relatively quickly.”
Einhorn said the global scallop market is worth $8 billion a year, over $600 million of which is in the US alone. “Our production method will make it possible to reduce the cost of each scallop dish and to expand the market’s volume by orders of magnitude because supply will finally adjust itself to the high demand,” he explained.
The company will use the funds to employ more stem cell and algae researchers and hopes to reach laboratory-scale production by 2023.
Mermade scallops, said Einhorn, will be available for purchase in the next few years “at an affordable price and with the same quality and taste as the original food.”
Using its novel method, Mermade can then produce a variety of other cultivated seafood products such as calamari, shrimp, and crab, he said.
Eric O’Brien, co-founder and managing director of Fall Line Capital, said Mermade was “not only pioneering new technologies to improve sustainability in aquaculture, but we believe they are building a circular technology platform that could unlock scalable commercial production for the entire cultivated meat industry.”
OurCrowd founder and CEO Jon Medved said the Jerusalem company was “undoubtedly a pioneer in cellular aquaculture, and specifically in scallops,” demonstrating “remarkable progress” in R&D. Mermade is
positioned to potentially transform a vast market that is worth billions.
Mermade is one of about 120 companies across the world operating in the alternative seafood industry, which includes plant-based and cultivated products.
These still make up a small portion of the global alternative protein industry but the market is growing. Companies developing alternative fish and seafood products grew by 30 percent between 2017 and 2020, according to market research firm IMARC Group.
In 2021, at least nine new companies developing cultivated and alternative seafood were founded, a majority of them Israel, according to a report published in April by the Good Food Institute. These include Mermade, Wanda Fish, Forsea Foods, Sea2Cell, and E-FISHient Protein.