Meati Foods’ $450M Financial Cris: What Went Wrong for the Mycelium Meat Pioneer?

Meati Foods, once a leader in mycelium-based meat alternatives, is facing an unexpected financial crisis that threatens its operations and workforce. The Colorado-based company, known for using fungal mycelium as a protein source, recently announced that its lender had pulled funding, forcing the company to warn state officials of a possible shutdown of its Thornton, CO facility and the layoff of 150 employees by May 2025.

According to a Worker Adjustment and Retraining Notification (WARN) notice, the lender unexpectedly withdrew cash reserves on February 28, 2025, leaving Meati without sufficient funds to continue operations. The withdrawal was triggered by Meati’s failure to meet revenue and margin targets, despite reporting a near doubling of revenue and a 130% expansion in distribution in the previous year.

Image courtesy: Meati

Investment Success Story

Founded by Tyler Huggins and Justin Whiteley, Meati Foods gained early traction for its whole-cut, mycelium-based steaks and cutlets, securing more than $450 million across 11 funding rounds. The company’s $150 million Series C round in 2022 aimed to fund a massive production site, known as the “mega ranch,” designed to scale mycelium-based protein production.

Investors included Revolution Growth, Cultivate Next (Chipotle Mexican Grill’s fund), Grosvenor Food & AgTech, Acre Venture Partners, Congruent Ventures, Tao Capital, Prelude Ventures, and Bond Capital. With this backing, Meati positioned itself as a potential leader in the next generation of sustainable meat alternatives.

A Shift in Leadership and Market Expansion

In early 2024, Phil Graves, a former Patagonia executive, took over as CEO, replacing co-founder Tyler Huggins, who moved to Chief Innovation Officer. Under Graves’ leadership, Meati prioritised profitability, aiming to achieve positive gross margins by the end of 2024 through expanded distribution and new product launches.

The company introduced mycelium-based breakfast patties and secured deals with major retailers, including Sprouts Farmers Market, Raley’s, and Harris Teeter, reaching 7,000 stores nationwide. These moves were intended to strengthen Meati’s foothold in the alternative protein space and solidify its brand among mainstream consumers.

High-Profile Backers and Industry Recognition

Meati’s rise was further amplified by celebrity endorsements. Investors and brand ambassadors included chef David Chang, MLB Hall of Famer Derek Jeter, TV personality Rachael Ray, gymnast Aly Raisman, and NBA star Chris Paul. Jeter, who joined Meati as an investor and advisor in June 2023, praised the company’s focus on nutrition, sustainability, and taste, positioning it as a premium alternative to highly processed plant-based meats.

The company also earned industry accolades, winning the Best Lunch & Dinner category in the 2025 Men’s Health Food Awards for its Crispy Cutlets. These endorsements and awards further solidified Meati’s reputation as an innovator in the alternative protein space.

Beyond retail, Meati pursued food service expansion. In July 2023, the company partnered with Dot Foods, North America’s largest food redistributor, to expand nationwide distribution. This partnership aimed to help Meati become the leading alternative meat brand by 2025, increasing accessibility in both grocery stores and restaurants.

The Broader Challenge for Alternative Proteins

Meati’s sudden financial collapse underscores the volatility of the alternative protein industry, particularly for companies investing in capital-intensive fermentation-based production. While demand for sustainable food solutions remains high, many startups in the sector struggle with scaling costs, profitability pressures, and shifting investor sentiment. The withdrawal of Meati’s funding suggests a broader hesitation among investors, even as the company achieved strong revenue growth and market expansion.

Despite its current crisis, Meati continues operating while seeking emergency funding to prevent closure. Whether it can secure the capital necessary to survive remains uncertain, but its situation highlights the financial risks facing mycelium startups aiming to disrupt the food industry.