Mermade Seafoods is poised to disrupt the $8 billion global scallop market with its circular cellular farming technology approach to producing mature scallops.
The Israeli company was founded in July 2021 by CEO Daniel Einhorn, CTO Dr. Rotem Kader and COO Dr. Tomer Halevi. Einhorn, who has a naval background — explaining his love of the sea — and a venture background met with Derr and Halevy at venture studio Tech7. They hit upon the idea of cell-based seafood, and suggested Einhorn as their partner.
Mermaid Seafood Technology aims to streamline production and provide delicious scallops, which will be the company’s first product, which is smaller than the alternative proteins currently available.
As Einhorn explains, cell-based foods represent biowaste, just like other animals and us humans, and it’s typically thrown away. Mermaid Seafood’s specialty is using biowatts, made from water, ammonia and carbon dioxide, to feed the algae. That is used as a growth medium to feed the algae cells. The company is calling this version of aquaponics “cytoponics”, and has filed several related patent applications.
This repurposed method is not only for seafood, but also for use in other cell-based applications such as pharmaceuticals, Einhorn told TechCrunch. Another unique feature is that it reduces the cost of cell production, which is highly dependent on expensive growth media, which can add up to 55% to 90% of the cost. That’s partly why processed meats are so difficult to measure, Einhorn added.
The overall seafood market is expected to reach $193.9 billion by 2027, and another report states that “scallops are one of the most traded and consumed seafood in the world, with the majority of production coming from aquaculture.”
And it seems to be growing fast to boot. In the year In 2018, the global scallop aquaculture market was valued at more than $5.8 billion and “farms produce three times the total biomass of the wild harvest.
Even with all that production, it’s widely recognized that food production in general won’t be able to keep up with public demand for the next few decades, which is why startups like Mermaid Seafood and other seafood companies like Blue Seafood, Wildtype, Cellmeat, etc. Plantish and BlueNalu are working to create alternative protein sources.
It also catches the eye of investors. Behind chicken and beef, alternative seafood represents just 0.1 percent of the total U.S. seafood retail market, according to the Fine Food Institute. In total, 15 startups in this area raised $175 million in 2021, more than double the amount raised in 2020, GFI reports. In fact, that figure is actually bigger because nine other deals were made that didn’t disclose amounts.
Mermade Seafoods is one of the latest to receive funding, having raised $3.3 million in seed funding from a group that includes OurCrowd, Fall Line and Sake Bosch. The investment closed in June and will allow the company to hire more stem cell and algae researchers to develop the product to laboratory scale by 2023, Einhorn said.
The company says business readiness is still a tough question to answer, even though it’s been planning for five years.
“When it comes to that lab-scale production, we’re talking about a few tenths of a part, and we want to reach that by 2023,” Einhorn added. “We want to keep the cost of scallops down, and we’re looking for a very significant price cut this round.”
