Toronto-based foodtech startup New School Foods has closed an $8-million CAD ($6-million USD) seed extension as it gears up to launch its plant-based salmon in the United States (US) and Canada.
The seed extension was led by Good Startup, which invests in startups that aim to remove animals from the food system. The round also included participation from returning investors NewTree Capital and Hatch, and new investor Inter IKEA Group. It also includes some non-dilutive capital that New School Foods received from federally funded innovation cluster, Protein Industries Canada, as well as angel capital.
“The response to our initial tastings with chefs and restaurants across the US and Canada have been incredibly positive.”
Chris Bryson
The seed extension comes roughly 18 months after the startup closed $15.9 million CAD in seed financing, and brings the company’s total funding to over $24 million CAD.
New School Foods produces plant-based seafood that is meant to emulate the taste, texture, nutritional benefits, and cooking experience of conventional seafood. It is currently in the process of rolling out its first product, an imitation salmon filet.
According to one global market research report, the plant-based seafood market was valued at approximately $84 million in 2022 and is predicted to grow to $1.3 billion by 2030. New School Foods is one of a growing number of Canadian foodtech startups looking to develop environmentally friendly and cruelty-free alternatives to meat and fish.
But CEO Chris Bryson believes New School Foods has found its pearl: the startup has developed a proprietary food production process to create “whole-muscle” seafood alternatives.
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In the context of seafood alternatives, “whole-muscle” refers to products that are designed to closely mimic the texture, structure, and appearance of a real piece of seafood. Unlike ground or processed seafood alternatives, which may be shaped into patties, nuggets, or other forms, whole-muscle alternatives aim to replicate the fibrous nature of actual seafood.
New School Foods has patented “scaffolding and directional freezing” technologies that it says can create this effect. The startup was founded in 2021 by Bryson. Prior to starting New School Foods, he founded Unata, which provides white-label e-commerce solutions for grocers. Bryson sold Unata to Instacart in 2018, reportedly for $65 million.
Along with the new funding, New School Foods is also unveiling a 28,000 sq. ft pilot production facility in Toronto. The facility houses the first version of the startup’s commercial assembly line, which will use the company’s patented tech to imitate the muscle fibres and connective tissue that form the basis for the texture of seafood and meat.
The facility also houses the startup’s scientific research lab, engineering lab, and business operations team, which the company said will work together to develop more whole-cut plant-based products that have the same look, cooking properties, taste, and texture as seafood and meat.
In an emailed statement, Bryson told BetaKit the startup began using the facility in the first quarter of this year.
“It’s worth noting that unlike many other plant-based companies, we are completely our own manufacturing operation and do not rely on a co-manufacturer,” Bryson added. “This ensures that we have greater control over quality, unit costs, and can invest in continuous innovation for both our process and formulations so as to solve the most important issue at hand: creating plant-based alternatives that appeal to a wider customer audience.”
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The new funding will support New School’s upcoming launch in American and Canadian restaurants. Bryson said the startup is gearing up for its restaurant launch, noting its plan has “always been to distribute via the chefs and tastemakers.”
“[Seventy percent] of the seafood purchased in the US is via restaurant orders rather than grocery [or] cook-at-home,” he added.
Inter IKEA Group represents the group of companies that connects IKEA franchisees with range development and suppliers. In a statement, New School Foods said Inter IKEA Group’s investment is part of the furniture retailer’s goal to increase its own plant-based product offering in the last few years. IKEA has previously stated its goal to make half of the main meals in IKEA restaurants plant-based by 2025.
“New School Foods is a true pioneer in the alternative protein industry, and we were impressed by the team, their products and the production technology they’ve developed. We are curious to explore and learn more about the potentials for plant-based alternatives,” Robert Carleke, innovation ventures manager at Inter IKEA Group, said in a statement.
When asked if New School Foods is currently negotiating a deal to put its products into IKEA restaurants, Bryson said there is currently no plan to serve the product in IKEA restaurants. He declined to disclose whether the firm is in negotiations with IKEA.
“Our initial go-to-market strategy via restaurants is unchanged, as is our longer term mission of accelerating the transition to a more sustainable food system,” the CEO added. “We don’t expect that can happen with any single brand, which is why we will be working with larger companies to leverage our production technology to produce co-branded products.”
When raising its seed financing last year, New School Foods launched a chef-only pilot program for its salmon alternative. On a June episode of The BetaKit Podcast, Bryson explained the initial target market for the product was restaurants and food service businesses.
He explained that plant-based meat alternatives were “struggling in grocery, but that’s because, for the most part, there’s a lot of crappy products that are out there.”
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Bryson added that sales of plant-based foods were actually growing in the food service and restaurant markets. He noted that restaurants are places where people are more open to trying something new, making it easier to encourage the switch from meat to plant-based foods.
“The response to our initial tastings with chefs and restaurants across the US and Canada have been incredibly positive,” Bryson said in a statement. “It’s a testament to our team’s commitment to creating a product that truly amazes both chefs and customers, providing a delicious and joyous experience.”
One individual who has tasted the product is Rob Kenedi, startup advisor and coach, and co-host of The BetaKit Podcast, who described it as remarkable.
“From the way it looked raw, cooked, and even after being torched, just uncanny,” Kenedi said. “They prepared it with an excellent chef in many different forms. Some I liked more than others, but, in general, it worked very well.”
“It’s really weird the expectations you put on what a food ‘should’ look, taste, feel, and smell like, but I would totally eat it again. It worked for me,” he added.
Feature image courtesy New School Foods.