Precision fermentation as an investment hotspot

How a new take on an ancient technology is unlocking the next wave of protein innovation

Precision fermentation merges traditional fermentation techniques with modern biotechnology to produce targeted functional ingredients, such as proteins, fats, enzymes, and flavour compounds. It uses specially programmed microorganisms like yeast, fungi, or bacteria to synthesise molecules identical to those found in animal-derived foods or plants.¹ Unlike conventional fermentation, used for thousands of years to produce foods like kimchi or tempeh, precision fermentation enables the efficient production of individual ingredients for use in food, drink, and beyond.

Using this technique, companies can create ingredients such as casein, whey, ovalbumin, and collagen without animals being involved in the process, and at a fraction of the environmental cost. The approach also enables consistent quality, customisable functionality, and potential nutritional or sustainability advantages over conventional production.²

Globally, precision fermentation is emerging as a foundational technology in the future of food, health products, and cosmetics. In the food sector specifically, its potential to decouple protein production from animal agriculture is attracting significant attention from investors, regulators, and manufacturers.³

ProVeg’s perspective

At ProVeg, we recognise precision fermentation as an established technology with products now reaching consumers in selected markets. Although availability remains limited, the pace of development is notably faster than that of cultivated meat, which still faces more complex technical and regulatory hurdles. Precision fermentation is a viable solution for sustainable protein production, one that offers a credible path to reducing reliance on industrial animal agriculture.

Key players and promising startups

A number of well-funded companies are already scaling precision fermentation platforms to produce high-value proteins and functional ingredients. Perfect Day produces animal-free whey protein, used in consumer products like Brave Robot ice cream.⁴ The EVERY Company focuses on animal-free egg white proteins.⁵ Geltor develops animal-free collagen,⁶ while Shiru uses AI-guided fermentation to produce functional proteins for food applications.⁷

Alongside these leaders, a wave of startups is bringing novel applications and regional diversity to the sector. MeliBio, for example, is producing bee-free honey using microbial fermentation and has recently raised USD 9.4 million.⁸ Zero Cow Factory, based in India, is developing animal-free casein and has secured USD 4 million in funding.⁹ The Dutch company Vivici raised EUR 32.5 million in 2023 to accelerate its production of dairy proteins.¹⁰ Meanwhile, Australia’s Cauldron is building high-throughput microbial fermentation infrastructure and is backed by USD 20 million in investment.¹¹

Regulatory progress and market entry timelines

Ingredients produced through precision fermentation are classified as novel foods in most regions, with approval timelines and regulatory processes varying considerably.

In the European Union, companies must apply for authorisation through the European Food Safety Authority (EFSA) to market novel foods. The authorisation process typically takes around 18 months from submission to market entry, provided the application is complete and no further information is requested. Several companies producing non-animal whey protein through precision fermentation, including Perfect Day, Remilk, and Change Foods, have initiated the novel food approval process in the EU in recent years.¹²

In the United States, the Food and Drug Administration (FDA) reviews precision fermentation products under the GRAS (Generally Recognised As Safe) framework. Perfect Day and The EVERY Company have both received GRAS no-objection letters from the FDA, permitting commercial sale of their precision fermentation-derived proteins.^{13 14}

The United States has emerged as an early commercial market for precision fermentation dairy products, with Bored Cow’s animal-free milk, made using fermentation-derived whey, now available in Target stores across the country.¹⁵

Given the complexity of EU regulation, many companies are prioritising launches in the US, where GRAS approval is faster, before pursuing European or Asian markets.

Market potential and scalability challenges

The precision fermentation market is projected to grow from USD 3.2 billion in 2024 to over USD 104 billion by 2034, at a compound annual growth rate (CAGR) of 46%, according to Precedence Research.¹⁶ Driving this growth are advances in synthetic biology, consumer demand for ethical and sustainable protein, and increased public and private sector funding.

In 2024, European fermentation companies attracted significant investment, with total funding reaching EUR 164 million in the first half of the year, surpassing the EUR 100 million raised throughout the whole of 2023. Notable funding rounds included Formo’s EUR 61 million Series B to scale its animal-free cheese alternatives and Helaina’s USD 45 million Series B to commercialise its human-equivalent lactoferrin protein. ^{17 18}

But scaling up remains a major challenge. Expanding production to commercial levels requires significant investment in fermentation infrastructure, along with solving technical bottlenecks in processing, and addressing supply chain issues around feedstocks and energy.

Emerging research focuses on improving microbial strain efficiency, reducing input costs, and advancing modular bioreactor systems for decentralised manufacturing.¹⁹

As infrastructure matures, production costs are expected to fall, especially for high-value functional ingredients like proteins with gelling, foaming, or emulsifying properties, which are essential for replicating the texture, structure, and performance of animal-based ingredients in food products.

Strategic considerations for companies and investors

ProVeg makes the following recommendations:

• Prioritise B2B ingredient suppliers over consumer brands: While consumer-facing alt-protein brands can generate attention, the more stable and scalable opportunities often lie in B2B ingredient suppliers. Companies producing precision fermentation-derived proteins, enzymes, or fats that can be used across multiple product categories are better positioned to secure long-term contracts, licensing deals, and recurring revenue from manufacturers and formulators.
• Invest in infrastructure innovation for long-term gains: A key bottleneck in the sector is capacity. Investing in companies developing scalable fermentation platforms,  including high-efficiency microbial strains, modular bioreactor systems, and energy- or feedstock-efficient processes,  is critical. These innovations not only reduce production costs but also enable faster iteration, localised manufacturing, and better unit economics over time.
• Target markets with faster regulatory pathways: Markets with streamlined novel food approval systems, such as the US (via the GRAS pathway) and Singapore, offer faster routes to commercialisation. Startups prioritising entry into these jurisdictions can establish early brand partnerships, gain real-world data, and build investor confidence before tackling more complex regulatory environments like the EU.
• Prioritise high-functionality ingredients: Not all proteins are commercially equal. Those with strong techno-functional properties, such as solubility, gelling, foaming, or emulsifying, are in high demand across food categories, from dairy and egg analogues to ready meals and snacks. Ingredients that offer performance advantages as well as ethical or sustainability credentials are likely to command a premium.
• Plan for cost trajectory, not immediate parity: Precision fermentation is not yet cost-competitive with commodity animal proteins, and may not be for years. But price is only part of the value equation. Investors who understand that adoption will be driven first by functionality, regulatory access, and sustainability goals, especially among large food manufacturers, will be better positioned to support the sector’s mid- and long-term growth.

Looking ahead

Precision fermentation is no longer a speculative technology; real-world products are already reaching consumers in markets like the US and Singapore,^{20 21} while companies such as Perfect Day, The EVERY Company, and Formo have secured regulatory clearances and major funding rounds.^{22 23} Global investment totalled USD 651 million in 2024 alone, with Europe surpassing its entire 2023 investment total by mid-year,²⁴ confirming strong capital momentum.

As the sector evolves, its value won’t be defined solely by novelty or sustainability claims. Its commercial future rests on delivering functional, consistent, and scalable ingredients,  attributes already demonstrated in B2B applications ranging from dairy proteins to egg and collagen analogues. Analysts project the global market to exceed USD 100 billion by 2034, driven by rapid advances in strain development, processing efficiency, and market demand for animal-free inputs.²⁵

For investors, the strongest opportunities may not be in individual products alone, but across the wider system, including production capacity, strain development, and companies that can navigate regulation effectively. Startups entering responsive markets like the US and Singapore are gaining early traction, while long-term viability depends on reducing production costs and scaling modular, decentralised manufacturing systems.^{26 27}

In short, precision fermentation should be seen not as a niche innovation but as a platform technology with the potential to reshape food supply chains, from ingredient production to formulation and manufacturing. For investors, the most effective capital will be patient, systems-aware, and focused on long-term functional value rather than short-term consumer trends. Ultimately, success in this sector won’t just be measured in returns, but in its ability to reduce reliance on industrial animal agriculture, lower environmental impact, and contribute to a more resilient, ethical global food system.

1. Fortune Business Insights (2024). Precision Fermentation Market Size, Share | Report 2024–2032. Available at: https://www.fortunebusinessinsights.com/precision-fermentation-market-109824
2. Good Food Institute (2023). Fermentation: A pillar of the alternative protein industry. Available at: https://gfi.org/resource/fermentation/
3. Good Food Institute (2023). State of the Industry Report: Fermentation. Available at: https://gfi.org/resource/fermentation-state-of-the-industry-report/
4. Perfect Day (2024). Our Animal-Free Dairy Protein. Available at: https://perfectday.com/
5. The EVERY Company (2024). Product portfolio. Available at: https://theeverycompany.com/
6. Geltor (2024). Biodesigned Collagen. Available at: https://geltor.com/
7. Shiru (2024). Technology overview. Available at: https://www.shiru.com/
8. Green Queen (2023). Exclusive: MeliBio on Precision Fermentation & Upcoming Series A. Available at: https://www.greenqueen.com.hk/vegan-honey-melibio-precision-fermentation-series-a-plant-based-mellody/
9. Vegconomist (2023). Zero Cow Factory Secures $4M for India’s First Animal-Free Casein. Available at: https://vegconomist.com/investments-finance/zero-cow-4m-animal-free-casein/
10. Vivici (2025). Vivici Secures €32.5 Million in Series A Funding. Available at: https://www.vivici.com/insights/vivici-secures-series-a-funding
11. Green Queen (2023). Cauldron Raises AU$10.5 Million to Scale Australia’s Precision Fermentation ‘Fermaculture’. Available at: https://www.greenqueen.com.hk/cauldron-raises-10-5-million-for-precision-fermentation/
12. Food Navigator (2024). Animal-free dairy seeks EFSA approval: What we know so far. Available at: https://www.foodnavigator.com/Article/2024/04/17/Precision-fermentation-dairy-seeks-EFSA-approval-What-we-know-so-far
13. US Food and Drug Administration (2020). GRAS Notice No. 863 – β-lactoglobulin produced by Trichoderma reesei (Perfect Day). Available at: https://www.fda.gov/media/136751/download
14. US Food and Drug Administration (2022). GRAS Notice No. 967 – Soluble egg-white protein produced by Komagataella phaffii (The EVERY Company). Available at: https://www.fda.gov/media/152289/download
15. US Food and Drug Administration (2022). GRAS Notice No. 967 – Soluble egg-white protein produced by Komagataella phaffii (The EVERY Company). Available at: https://www.fda.gov/media/152289/download
16. Precedence Research (2024). Precision Fermentation Market Size To Hit USD 104.13 Bn By 2034. Available at: https://www.precedenceresearch.com/precision-fermentation-market
17. AgFunderNews (2024). Formo raises $61m Series B, launches cheese featuring koji protein. Available at: https://agfundernews.com/formo-raises-61m-series-b-launches-cheese-alternatives-featuring-koji-we-aim-to-become-a-real-challenger-brand
18. Business Wire (2024). Helaina Raises $45 Million in Series B Funding to Accelerate the Commercialization of Human Bioactive Proteins. Available at: https://www.businesswire.com/news/home/20240925697200/en/Helaina-Raises-%2445-Million-in-Series-B-Funding-to-Accelerate-the-Commercialization-of-Human-Bioactive-Proteins-Starting-with-effera-Human-Lactoferrin
19. Lee Enterprises (2024). Scaling Up Precision Fermentation: Challenges and Strategies. Available at: https://lee-enterprises.com/scaling-up-precision-fermentation-challenges-and-strategies/
20. Green Queen (2024). Bored Cow: Animal-Free Dairy Milks Now Selling At Target Stores Across America. Available at: https://www.greenqueen.com.hk/bored-cow-animal-free-milk-target-stores-pumpkin-spice/
21. The EVERY Company (2024). Product portfolio. Available at: https://theeverycompany.com/
22. Perfect Day (2024). Our Animal-Free Dairy Protein. Available at: https://perfectday.com/
23. AgFunderNews (2024). Formo raises $61m Series B, launches cheese featuring koji protein. Available at: https://agfundernews.com/formo-raises-61m-series-b-launches-cheese-alternatives-featuring-koji-we-aim-to-become-a-real-challenger-brand
24. AgFunderNews (2024). Formo raises $61m Series B, launches cheese featuring koji protein. Available at: https://agfundernews.com/formo-raises-61m-series-b-launches-cheese-alternatives-featuring-koji-we-aim-to-become-a-real-challenger-brand
25. Precedence Research (2024). Precision Fermentation Market Size To Hit USD 104.13 Bn By 2034. Available at: https://www.precedenceresearch.com/precision-fermentation-market
26. Green Queen (2023). Cauldron Raises AU$10.5 Million to Scale Australia’s Precision Fermentation ‘Fermaculture’. Available at: https://www.greenqueen.com.hk/cauldron-raises-10-5-million-for-precision-fermentation/
27. Food Navigator (2024). Animal-free dairy seeks EFSA approval: What we know so far. Available at: https://www.foodnavigator.com/Article/2024/04/17/Precision-fermentation-dairy-seeks-EFSA-approval-What-we-know-so-far