Shiok Meats already talking to investors about Series A funding, says CEO

Sandhya Sriram, CEO & co-founder of Shiok Meats.

Shiok Meats is not short of money and investors.

The Singaporean cell-based meat startup says it received so much interest for its $4.6 million seed round, it had to turn investors away. The round itself was already oversubscribed. Shiok had initially targeted just $3.5-4 million.

“We’re actually already speaking to a number of investors for an early Series A,” said Sandhya Sriram, CEO of Shiok Meats. “We are very choosy with our investors. From day one, Ka Yi Ling (Shiok’s co-founder) and I were very insistent about only taking in money that made sense for us.”

Founded in August 2018, Shiok Meats is led by Sandhya Sriram and Ka Yi Ling, two former stem cell scientists from Singapore’s A*STAR institute. The two were disillusioned by academia, choosing to take the route most scientists could only dream (or fear) of pursuing – being entrepreneurs.

As a cell-based company, Shiok Meat taps stem cell technology to reproduce animal parts for human consumption. It targets crustaceans – shrimps in particular, which alone represents a $40 billion global industry. It is also an industry that’s been marred by poor hygiene and lackadaisical ethical standards.

According to Sriram, most shrimp farmers around the world have taken advantage of shrimps as being natural bottom feeders. This has led to widespread practices of growing shrimp in – quite unbelievably – sewage water.

“Shrimps, by nature, eat dirt. That is what they eat. That’s why when you peel a shrimp, you remove that black thing on its back? That’s all dirt inside. It’s the digestive tract,” said Sriram.

Large vats of antibiotics are then dumped into the ocean to clean these shrimps, after which they are washed with water and shipped for human consumption.

“This is not spoken about as much because people think that shrimps don’t really feel pain,” explained Sriram. “But that is not true; crustaceans do feel pain as they do have a central nervous system and along with tackling animal cruelty, cell-based meats take care of the environment and human health.”

Unlike traditionally farmed shrimps, Shiok Meats says its product is clean, healthy, environmentally friendly and uses zero antibiotics. It has already developed its first batch of Shiok shrimp, but it currently costs a hefty $5,000 a kilo.

Its next steps will be to lower this down dramatically.

“We want it to be $50 per kilo by the end of next year,” said Sriram. “That’s still slightly expensive, but we want to launch by selling our products in a premium restaurant, where consumers come for the novel and gastronomical experience.”

It also has several other barriers to knock down – including costly patent registrations which will likely take 2 to 3 years to clear across multiple markets. Food safety licenses will also need to be acquired in order to commercialise their product later down the line.

It’s a long journey ahead, but Sriram is convinced that the global tide of sustainability and clean meats is going to work in their favour.

“I think people are very worried about sustainability and personal health. Several food companies have come under fire of late for poor food practices, pathogens, epidemics and all of it, so I think they want to keep a very clean food processing facility as well,” said Sriram.

“I think they see our technology as one of those.”

Edited interview excerpts with Sandhya Sriram, CEO of Shiok Meats:

I heard that your latest seed round was oversubscribed.

Yes. We actually only wanted to raise about $3.5-$4 million, but we raised $4.6 million. We were very choosy with our investors. We were looking for very strategic investors and even turned down a couple of them.

That sounds like a good problem to have.

Yes! We’re actually already speaking to a number of investors for an early Series A. From day one, Ka Yi and I were very insistent about only taking in money that made sense for us. We only wanted investors to be people who we wanted to talk to on a daily basis, especially on strategic connections and networking.

If you go down our investor list, you will notice that none of our investors are traditional VCs. A lot of them are new funds, impact funds, philanthropy organisations.

With Series A, it will probably have to be even more strategic. Series A will involve a lot more work in large scale manufacturing and figuring out how to get the product to market.

It’s very early days but…any idea when that Series A will be?

(laughs) I can’t tell you!

How did you get into Shiok Meats? It’s quite unusual for a scientist to follow the path of an entrepreneur.

If you had told me that I would be a startup founder four years ago, I would have said you were crazy! That was around the time I had just begun getting exposed to the entrepreneurial world and I realised that science that was being done in the lab was not getting translated into any product or therapy for humans. It just takes too long.

I started my first company in 2014 as a part-time co-founder. It was a biotech news website called Bio Tech in Asia. It was here where I first heard about cell-based and clean meat – in fact I was interviewing those companies when they first came out, and was super intrigued by the technology. It also aligned with my background as a stem cell scientist.

Four and a half years later, I decided it was high time that I would do something on my own. I discussed it with Ryan, one of my mentors in the US, and he said “yeah, just go for it and I’ll put down the first cheque”. So I said “okay, I’m quitting my job” and it literally happened like that. I quit my job a week later.

I had known Ka Yi for some time and was looking for a full-time chief technology officer (CTO) to join me. She too was bored of academia and wanted out. She quit her job almost the next week as well.

We joined forces and Shiok Meat was born in August 2018.

So what does Shiok Meat do? And why shrimp?

Shiok Meats does cell-based shrimp, so we use stem cell to make the meat. It’s not synthetic or fake, it’s not plant-based, so this is not vegetarian. We are catering towards meat eaters, or vegans and vegetarians who don’t eat meat for ethical reasons like me. So I’m a vegetarian by choice. I don’t eat meat because it comes from dead animals and it’s not sustainable for the environment.

Why shrimp – three reasons. First, it’s a $40 billion market so why not. Second, we’re based in Asia and this market eats so much shrimp and crustaceans on a daily basis in every form, shape and size. Third, the shrimp industry is very dirty. It’s so dirty compared to red and white meat that even if I was a flexitarian, I wouldn’t eat shrimp. I would eat something else.

A lot of shrimp that is factory farmed is grown in sewage water. The reason being, shrimps are bottom feeders. So shrimps by nature, eat dirt. That is what they eat. That’s why when you peel a shrimp, you remove that black thing on its back? That’s all dirt inside. It’s the digestive track.

So what the shrimp farmers do is – they exploit the fact that they are bottom feeders and grow them in sewage water. After that, they dump huge vats of antibiotics to clean them. That’s then washed with water and sent to you for consumption. All these vats of antibiotics are dumped into oceans and rivers leading to the superbug and antibiotic resistance that’s been happening around the world.

“This is not spoken about as much because people think that shrimps don’t really feel pain. But that is not true; crustaceans do feel pain as they do have a central nervous system and along with tackling animal cruelty, cell-based meats take care of the environment and human health.”

If you’re looking at a $40 billion industry you can imagine the amount of shrimps that are killed on a daily basis for human consumption or even for animal feed. Why do all of that when we can make a sustainable source of shrimp? No one was doing anything about this, so we said why not? Let’s just jump on it.

Shiok’s meats are definitely cleaner and healthier – no antibiotics, no sewage water and definitely good for the environment.

Who are the big players in the shrimp industry? Who are you really targeting?

I think rather than targeting, it’s more like we want to give these big players an opportunity to change their business model. Why not obtain technology like ours, license our technology and still grow shrimp?

Most of these shrimp farms are family-run businesses so all the family knows is how to grow and sell shrimp, and they know it very well. We can enable them to grow shrimp our way and still make money, still make business, and help us thrive as well.

Some of the biggest shrimp companies in the world are from Southeast Asia, like Thailand, India and Vietnam. About 65 per cent of shrimp farmed for global consumption is from this region. Over 50% of shrimp grown in India is for export rather than for local consumption.

What’s next in the pipeline for Shiok this year?

We’ve figured out the basic technology –  like how to take out cells from shrimp and how to grow them in a medium but all this is in a lab scale. We were able to make about 8 or 10 dumplings, but that’s nowhere close to even one human’s consumption so we have to scale up production significantly.

We’ll have to invest a lot of money into infrastructure, getting access to the right equipment, and getting access to the right talent to handle that scale-up.

The $4.6 million is mainly for helping us bring down the costs of our technology. A bit of the money will also go into filing for our patent. Patents are expensive. We’re in the midst of a provisional filing. There are about three main stages, and you have to file per country. Each country will be about $30-40K for each patent.

Generally you’d want to patent China, India, US because these are the bigger countries with a lot of talent, and these countries have a lot of stem cell knowledge so we would rather patent in these countries. It takes about 3 to 4 years to get the patents approved, depending on the country as well.

Our target milestone is to be in at least one high-end restaurant by the end of next year in Singapore. We’re still about 18 months away, but even to do that we need to reach a scale where we can produce a couple of kilogrammes of meat every week. And we’re nowhere close to that.

Cost is crucial for a food company. How will you keep costs low? What’s the cost strategy for Shiok?

For us, most of our cost goes into a nutrient mix we use to we feed the cells. We call it media. It’s a mix of carbohydrate, protein and fats, similar to what a shrimp would eat or animal would eat. This is the most expensive because the ingredients we buy are all farmer grade. Stem cell technology or clean meat is originally from farmer technology, so everything is pretty expensive.

One of the key milestones for us to do away with farmer grade ingredients, but find out if plant extracts can help grow our cells instead. If we can figure that out, we can lower our cost by 100x. We hope to achieve this about 12 months from now.

Shiok shrimp costs about $5,000 per kg right now. We want it to be $50 per kilo by the end of next year. That’s still slightly expensive, but we want to launch by selling our products in a premium restaurant, where consumers come for the novel and gastronomical experience.

Similar to Impossible Burger, I don’t think you would pay more than $5 or $8 for a beef burger but people today are buying it at $25-$30, because it’s in a celebrity chef restaurant. So we want to go down the affluent market route, but eventually our pricing should be as low as $1-$5 per kg and that’s what we want to reach in 3-5 years from now. Prices will come down when we reach mass scale production.

What about other crustaceans?

We’re adding crab and lobster in the next couple of months. But we will concentrate on shrimp first so our first product will still be a shrimp product. Crab and lobster are actually a little more complex than shrimp so it may take a longer time.

Food companies also need to apply for food safety licenses. Where are you guys on that?

Yes. We are working with the Singapore food agency on the regulations, rules and permits that we have to get and so on. It’s a work in progress. We don’t know how many licences we have to get yet because…they don’t know as well! (laughs)

It’s a novel food, so even they are trying to figure out how to regulate this. In fact I think the entire world is trying to figure this out because none of the countries have put out a strong framework on how to regulate cell-based meats yet. So we are working with regulators on the ground, as well as those in India. We’ll eventually have to speak with regulators in Hong Kong too.

Do you see Shiok Meats being more of a food supplier? Or more of a B2C, consumer-facing company?

It will have to be a hybrid model. Part of it will have to be B2C and B2B to restaurants. There are a lot of sustainability restaurants and chefs who are worried about sustainability. They want to work with brands like us who want to incorporate our meats into their dish. I foresee on the menu it would say – “dumplings made of Shiok Shrimp”. So there’s still brand recognition but it also explains where the shrimp comes from.

You mentioned brand recognition. That must be something you’d want to invest in as a foodtech company?  

It’s actually a really important part of our business. For instance, when I ask you what was the best soft drink you’ve ever had, would you describe it as a brown, aerated drink? No. You would probably say Coke or Pepsi. So it’s always about brand recognition when it comes to food. Even when it comes to a hawker centre – go to that Tanjong Pagar hawker centre, to that food stall and buy it from that uncle or aunty. It’s connected to a brand. So brand recognition is really important to us as well. When we’re ready to get into the market, we’ll do a lot more of this.

You must do a lot of market education too. How has the reception been like on the merchant side?

You’d be surprised actually. In Southeast Asia and Asia, most of the food suppliers, food packers, even shrimp farms that have grown shrimps ethically have already reached out to us and asked when they can start selling our meat. Two or three shrimp farms from Southeast Asia have already asked us when they can adopt our technology. And we’ve not reached out to any food company until now!  

I think people are very worried about sustainability and personal health. Several food companies have come under fire of late for poor food practices, pathogens, epidemics and all of it, so I think they want to keep a very clean food processing facility as well and I think they see our technology as one of those.

Also read:

Singapore-based Shiok Meats raises $4.6m seed funding to produce cell-based shrimp

Temasek, Enterprise SG back new foodtech fund seeking to raise $100m

More than a fad? Plant-based meat catches investor fancy in Asia

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.