San Diego startup BlueNalu, which is growing fish fillets in a lab directly from real fish cells, has raised $60 million in convertible debt financing to build out a pilot factory, continue to pursue regulatory approval and launch its seafood in restaurants.
The 3-year-old firm, which was featured on CNBC’s Streets of Dreams with Marcus Lemonis on Tuesday, is developing cell lines to grow up to eight species of seafood — with mahi-mahi and bluefin tuna targeted as its initial products.
Depending on the pace of U.S. Food and Drug Administration review, BlueNalu could roll out its first lab-grown mahi-mahi this year, said President and Chief Executive Lou Cooperhouse.
“We will be only in restaurants when we start,” said Cooperhouse in an interview. “We plan to launch here in San Diego in the first restaurant. We have not determined one just yet, but we are in various discussions. From San Diego, we will quickly launch in restaurants in the U.S.”
While plant-based milk, and more recently beef, have become somewhat mainstream, cell-based foods are still in the early stages. One cell-based product, Eat Just’s cultured chicken, has received a regulatory designation in Singapore that says it’s safe for human consumption. But BlueNalu knows of no cell-based seafood products that have been authorized by regulators.
Still, a handful of startups are working to grow cell-based seafood as a more environmentally sustainable food source that can be produced closer to home, rather than shipped hundreds or thousands of miles from where it was caught.
BlueNalu makes cell-based fillets by isolating real fish muscle cells, fat cells and connecting tissue, bathing them in nutrients and growing them in stainless steel equipment akin to what’s used in microbreweries, said Cooperhouse.
The company has focused on certain species, such as mahi-mahi, that are difficult to raise on fish farms.
“Our whole model is to partner with the food industry,” he said. “We are really changing the model from supply restricted — basically we sell what we catch — to now it can be a demand-driven model where we sell what people want.”
BlueNalu’s production facility will be roughly 40,000 square feet. The company employs 30 workers today, along with several independent contractors. It expects to grow to 60 employees by the year end.
Previously, BlueNalu raised $20 million in a Series A round of venture capital funding in early 2020. It got off the ground with a $4.5 million seed round in early 2018.
Rage Capital led the convertible note financing. Others participants include Agronomics, Lewis & Clark AgriFood, McWin and Siddhi Capital, as well as strategic investors Radicle Growth, Rich Products Corp. and Thai Union.
“BlueNalu’s technology is the next phase in the continuous agricultural revolution,” said Alex Ruimy, managing partner of Rage Capital, in a statement. “What the team has built, and continues to build, promises to change the way we source and eat fish.”
