Startup Series: Building a Better Food System with Wildtype

Today's guest is Justin Kolbeck, co-founder and CEO of Wildtype. Wildtype is a startup creating sushi-grade cultivated salmon, and they recently announced the completion of a hundred million-dollar series B funding round, which was the largest for a cultivated seafood company. I was excited for this one because it's clear that our current food system is not sustainable. It's a huge source of emissions, and we're going to have to feed billions of additional people over time. It's unclear today how we're going to do that, and especially do that in a way that is more sustainable with each other and with the planet that we rely on to support us and other life forms. Seafood, of course, is one of the largest categories of food, and Wildtype is one of the leaders in the cultivated seafood market, which made for a really interesting discussion.

We talk about the origin story of the company and what led Justin without a background in this area to anchor here, the state of the cultivated meat/seafood landscape when they started and how that's evolved to today, and Justin's predictions for how the market will play out over time. We also talk about some of the key challenges in building the company, how to balance customer development with the technical work in the lab, and Wildtype’s plans in terms of go-to market strategy, which sources of capital they have used to date, and which they anticipate using over time.

Enjoy the show!

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Jason Jacobs: Justin, welcome to the show.

Justin Kolbeck: Hey, nice to be here. Thank you.

Jason Jacobs: Well, I'm psyched to have you on. It's funny, we've covered this category a bit before in terms of whether it's cultured meat or plant-based or regenerative ag or different areas, but Wildtype is interesting, both because it's seafood, so something a little different, but also, I mean, you've raised a boatload of money and you seem to be further along than a lot of other companies. So I think your perspective's a really important one to hear from.

Justin Kolbeck: Well, yeah, thanks so much for having us on and having the chat today.

Jason Jacobs: Awesome. Well, for starters, Justin, what is Wildtype, in your words?

Justin Kolbeck: So Wildtype is going to introduce a third supply, our source of seafood. So we all know about wild-catch and we know about farmed seafood, and we're making cell-cultivated seafood. So the very basic ideas, we take cells from a healthy fish, we grow those cells up into fairly large quantities and we place them on a plant-based scaffold, similar to what you do with a building, to help direct those cells and mature them. And then basically harvest a product that looks and tastes a heck of a lot like what you'd find in the oceans.

Jason Jacobs: And what's the origin story for the company? Because correct me if I'm wrong, but you didn't come from this area at all. Did you?

Justin Kolbeck: [laugh] that's right. Yeah. I'm a, I was very proudly the only non-scientist at the company for, for actually several years. This story really starts, gosh, almost 12 years, or 11 years ago now. I had just come off of my, what would end up being my last assignment in the US Foreign Service as a diplomat. I was on a provincial reconstruction team in a place called Paktika, which is the, uh, east side of Afghanistan, right on the tribal areas, on the other side of Pakistan. And I ended up spending a bunch of my time that year working with the provincial governor there on food security, interestingly.

It's not what I had expected going into [laugh] that assignment, but it ended up being a big topic. After that, I decided to take a little bit of a break. I had, had that assignment and then a couple years prior to that, I was in Peshawar, Pakistan, another really tough one, and I just felt like I needed a break, and I had always wanted to go to grad school. So I, I, uh, convinced the state department to gimme a break, and I went to Yale to do an MBA. And a few weeks into that program, I was invited to a dinner and met my now co-founder, Aryé, who's been a dear friend of mine.

He spoke at my wedding, and one of my very best friends on the planet. And we started talking a lot about some of these big ideas that we had. And in about 2015, he came to me with this idea that we could make any type of meat or seafood using some of the technologies he was working on at the time, at the Gladstone Institutes. I actually went to go visit him in, in his lab, and at the time, he was working on growing functional heart cells. I mean, if you look at them under the microscope, you can see them beat.

It was like the coolest thing I'd ever seen. And it was like, "Justin, if I can make functioning heart tissue, we can absolutely make any kind of meat, including seafood." And that really just kicked off this really positive conversation we had about why we needed to supplement the seafood that we eat today. And just to put some numbers on it, seafood demand is expected to rise like 20% or something like that over this decade, which translates into several tens of millions of tons of new seafood per year. And the question we have to ask is, where are we gonna get it? Right? Are we gonna continue to push wild fish stocks closer toward extinction?

Are we gonna rely on, you know, what is now in a lot, a lot of cases, overburdened fish farms? And the answer to both of those questions is no, that doesn't work, it's not enough. We need a new source. And so that's really kind of what kicked off this journey that, that started, in earnest, the, the back half of 2016.

Jason Jacobs: And when you first set out to do this, where was the technology at the time, if anywhere? And what was it that gave you the conviction that this was the right place to anchor for the next chapter of your career?

Justin Kolbeck: Hmm. So this young field of ours has a little bit of a history. It goes back to some academic researchers and to some artists actually. So the first that I've read, that anybody had done in this field was a, a researcher in New Jersey named Morris Benjaminson, who was on a grant from NASA to grow meat for space. And [laughs] he actually grew part of a, uh, a goldfish as a matter of fact, for that paper. And I read this paper, it was very interesting. A couple years later, a French artist named Oron Catts, did a demonstration in France where he grew parts of a frog to [laughs] serve them to, to his guests.

And it was really, that was about art. But I'd say the conversation for what is now the cultivated meat and seafood industry kicked off, in earnest, in 2015, when a Dutch researcher named Mark Post had, with some backing from Sergey Brin and some others, had shown the first cultivated hamburger, and then they, you know, kind of famously ate it on TV. And so when we started, that was kind of it. There were a couple of companies out there getting going, so the company that is now Upside, they were getting started.

There was a company in Israel called SuperMeat, they were getting going. There's a company in Japan, called IntegriCulture. All of those companies are still around, but nobody had really shown anything impressive in terms of like product. And so in terms of conviction, so at the back half of 2016, Aryé and I rented some land space, we were still working at our jobs and kind of funding the company from our own pockets and our salaries, and working nights and weekends on, on what later became Wildtype, for a year. So it took us a year before we, we kind of made our first piece of meat that we're able to kind of cook up and eat.

And it also took, I think that much time for me [laughs]. So when Aryé first talked to me about this, I was like, "All right, so you wanna grow meat? Hmm. Okay. Is that, uh, A, ever gonna scale? And, B, can we ever get people comfortable with this?" And I think it, it really took the course of the year and a lot of conversations I had with people that I knew in the food industry to get to the point of conviction that this was something that, that could be something really big.

And now, I think in 2022, when we look back, it, it feels obvious that, yes, we need all forms of protein production and supply to be able to meet this huge demand for, for meat and seafood globally, but I think at the time, it felt very crazy. And so, yeah, it was, it was a year-long journey, I think, for me and Aryé before we left our jobs and went all in.

Jason Jacobs: And so it sounds like there were these super early prototypes in unrelated or different areas of cultivated meats. Sounds like nothing in seafood. What is it that led you to seafood as a starting point? And then as you thought about how to attack, how did you prioritize and where did you start?

Justin Kolbeck: Seafood made a lot of sense, because, I think just because of my experience in the foreign service, I tend to take a more global view. And so the first question I asked was, what is our species' number one source of animal protein? And the answer is seafood, by a lot, actually. And that's not necessarily driven by US consumption, although it's a meaningful part, but largely by Asia. And so we decided to first focus there, 'cause we felt like we could have the biggest impact. And then in terms of a, a plan of attack, we, like any old, classic consultant, and you know, drew a little bit of a two by two matrix, and on one axis was market size, on the other axis was problematic means of production, let's say.

And we waited very heavily on big opportunities to, to have an impact. And salmon just made a lot of sense. So on one hand, it's the most consumed fin fish, and actually the second-most consumed seafood in the United States after shrimp. So the opportunity to have an impact was colossal. And then it was also one of this fish that is growing very quickly, just in terms of year-on-year growth. I mean, more and more people are very comfortable cooking salmon and they're certainly eating it out at restaurants. It's very culinary, it has a very broad range of culinary applications, not just in the United States, but really around the world.

So that was very appealing to us in a lot of ways, a very global fish. But maybe most emotionally or viscerally, it's our hometown fish. So from the San Francisco area, all the way up to Alaska is salmon country, Pacific salmon country. So Chinook, and Coho and Sockeye, and all these other wonderful forms of Pacific salmon. And we'd go hiking on the weekends and we'd see these [laughs] signs about like, "Hey, this used to be Coho salmon breeding grounds, and now because of climate change and drying up rivers, they no longer return here."

And that's heartbreaking, and it felt like an opportunity to restore part of the marvel of the natural world, and in a, to a large extent in our own backyards. So unlike starting a beef company in the central part of San Francisco, felt very good to pick a, a fish that was so local, and, and, you know, have, have that big environmental impact off the jump.

Jason Jacobs: From what I understand about cultivated meat, it is not a small undertaking from a technology standpoint, and of course there's texture and cost and quality and scalability and things like that. And on the other side of that equation is that, consumers are fickle, and it's hard to predict their preferences and things like that, so sometimes you go through all the work to get it to work, and then you hang a shingle and no one comes. So when you set out, what were the most important things to focus on early on? And how did you balance that technological progress with market testing, if you will?

Justin Kolbeck: We were really concerned about spending a bunch of venture money in an echo chamber, just because those people kind of in our immediate circle were really interested in this idea. So we blew the doors open to the company in the very earliest days. So, you know, the first time we could really make a prototype, I packed it into my backpack and went out to go see a friend of mine in Portland, Oregon, who has run a family restaurant for the last 20 years. That was a guy named Peter Platt I knew from business school, and who a restaurant called Andina. And I asked him like, "What do you think?" So he tried it and he like introduced me to some other chefs.

And, and that really kicked off this journey of us having this really open and transparent conversation about the state of the product at the time. "So here's what we're able to make, cook with it, eat it, tell us what you think." We needed that feedback. But more importantly, I think what we wanted to do is just to understand, was there an appetite for this? Would these people who spent their lives in the restaurant industry and in the food industry, put this on their menus and offer it in their stores? And the answer that we got, particularly once we narrowly focused in on salmon was, "Yes, and please go faster. And by the way, here are five things that, that need to improve about the product."

And so since that time, we've given our product to, I- I've lost count, hundreds, hundreds of people in the food industry, outside of Wildtype, to get their feedback and to make sure that we're building something that people actually want. That's really been the heart of our efforts on the culinary development side. So we actually don't have an internal full-time chef, and that was very intentional. So we wanted to crowdsource the culinary input for the company.

Jason Jacobs: In terms of where the initial interest and positive feedback has come from, how would you describe the pockets of the food ecosystem where your value proposition resonates the most? And what is it about your value proposition that gets those people excited?

Justin Kolbeck: I can give you a recent example. So a friend of mine from college reached out with an introduction to one of the founders of a big poke chain in the US called Pokeworks. And they were interested in talking to us. And it turns out there were a couple of things driving that introduction. So one, they hear all the time from their consumers, their customers, people coming into their stores to buy poke bowls every day, that people want a more sustainable option, and they want to know that we're not paying Peter to pay Paul or stealing from Peter to Paul.

And by that, I mean, if we're getting our salmon from aquaculture, that we're not damaging those coastal ecosystems in the process or having these fish live, what is for a salmon, a very unnatural lifespan. So like you probably know they, they, there're these incredible creatures that are born in fresh water, migrate out to the oceans for a large part of their lifespan, and then come back into, out of salt water, into the fresh waters to spawn and die, and then their body sort of feed this huge, beautiful ecosystem that we have of bears and eagles and trees, and all these other things in this part of the country.

And I think people were just asking like, "Hey, can we have a more sustainable option?" So that was one big part of the driver. And, you know, at least for what we're doing, it's nice to know that we have zero impact on wild fish populations, full stop, which is hard to get in either wild-catch, certainly with wild-catch, and also with farm fish, because still, unfortunately to this day, a large percentage of the fish feed that we use for aquaculture comes from wild-catch fish, like anchovies and sardines.

The last time I saw a fairly reliable number, it was like 30% globally. And then the other aspect that I think was driving a lot of the interest was health. So seafood is really one of these interesting paradoxes, where on one hand, it's one of the most nutritious forms of animal protein that we can eat. So it's low saturated fat, it has these Omega-3s. We're regularly told by our doctors, "Hey, please eat less red meat and maybe eat a little bit more seafood in exchange" yet it has these major problems of contamination. And by that, I mean, the microplastics that are rampant in our oceans these days, there's some predictions that there would be more plastic in our oceans than fish by the middle part of this century, which is terrifying.

Antibiotics that are used in aquaculture, those have been on the decline, but there's still a meaningful part of production today. Mercury, right? Nobody likes that in their fish. So on one hand, we have this beautiful, nutritious animal protein, and on the other hand, we have these catches, and it would just felt very appealing to groups like Pokeworks and others that have come to us to solve for both of those things. So to have an actually sustainable form of seafood, coupled with a pristine, pure form of that product, that doesn't have any of the pollutants that are just common today in our production systems.

Jason Jacobs: One thing that, that I wrestle with, and this is not necessarily a, a Wildtype-specific question, but given that our entire global economy was built without factoring in certain key externalities, and essentially we need to rebuild the entire global economy in a way that, that does enable us to, to be more in harmony with the planet we rely on and with each other, so philosophically, there's this huge sea change that's coming. And then that plays out one category at a time, and when it does, it's like a jump ball where things have been done the same way for a long time, and then it's like, okay, they're gonna be done totally different.

But then what happens it seems, is that it's almost paralyzing because you have so many different people jockeying with so many different approaches. You have people saying that, you know, "Well, demand is this, and so we need to deliver that." And you have other people saying, "Well, we need to change demand." And then you have other people saying, "Well, plant-based is the answer." Or, "No, it, it should continue to be meat, but farmed in a, in a way that's more ethical and humane and sustainable." And then you have others that say, "No, your cultivated is the way." And, and then it's like, well, how do we get there? Well, there could be incentive, carrots, and there could be sticks and there could be consumers driving it.

And this is playing out in every category, not just this category, but I guess my question is, stepping outside of Wildtype and just looking at the category overall of the food that we eat and that populations eat all over the world, how do you think it should change? And how do you think it will change if you need to look into the future? Like where will we get our food from in 20 years?

Justin Kolbeck: Boy, that's the question. [laugh] look, I think everything that you said is true. Do we need to all be more conscientious about our consumption patterns? Yes, we do. Should we realize that everything that we put into our body has a toll or cost on the environment, some of which are measured and some that are not? Yes, so absolutely. But taking to the extreme, should we assume that everybody on the planet is comfortable adopting a lentils only, or whatever the most sustainable form of protein production or other food as the sole element of their diet? No, I don't think anybody believes that that's tenable.

Do we need to explore much more responsible and sustainable forms of conventional production of food, like caps-on wild-catch fishing that are actually enforced and allowing some of these wild fish populations to recover? We can do that. It's within our power, we just need to take the pressure off of these wild fish stocks for a little while so they can rebound. So the answer to that is, yes. Should we also adopt new forms of food production, like plant-based and cultivated? Yes. Now, the thing is, everybody likes to have their one thing, that's the silver bullet, that's the solution that will fix everything.

And I just don't believe that's the case. Obviously I have a lot of bias toward cultivated seafood, but I don't think that alone is gonna fix this giant generational challenge that we have, which is, how do we feed the next 3 billion people that are gonna inhabit this earth, many of whom wanna have the same consumption patterns that we have here in the United States? And I think the answer is, we have to do all of the above. We have to be more conscientious with our food choices. We have to start measuring those externalities that you mentioned and maybe pricing them even into the foods that we eat.

We need to support all the efforts that the people who are currently putting seafood and meat on our tables are doing to make their production methods more sustainable, and, and stop demonizing them. 'Cause most of those groups are working really hard to fix some of the challenges that we spend a lot of time talking about today. And we need to support these new brands that are up-and-coming, and, you know, maybe be a little bit patient as we work through these initial product reps. And so I think it's all of those things, honestly, and, and we don't really get there with just picking one of those paths.

Jason Jacobs: Okay. Well, I don't disagree. A related and f- followup question is that, you talk about, yeah, how do we feed 3 billion more people and, and where's that gonna come from? It seems, I'm, I'm gonna say something intentionally controversial for discussion pu-

Justin Kolbeck: [laughs].

Jason Jacobs: ... purposes here.

Justin Kolbeck: Got for it.

Jason Jacobs: It seems that as that plays out, that the original, the authentic, like the real salmon becomes the premium thing and the, what might start out as a mediocre knockoff, that gets to be a more credible knockoff over time, but still a knockoff would be the thing that could maybe feed everybody else. Right? But at the same time, I've heard you talk about, and several people that are producing alternative proteins talk about how it's more expensive and how they're scaling problems in terms of getting it to be able to serve large quantities of people.

So it almost seems like it slipped on its head where it's like the original thing should be the delicacy, but it's like not only is the knockoff not as good, but it's also more expensive?

Justin Kolbeck: Well, I think there are a couple of things in the near term that give me hope in that scenario that you described. And as it pertains to seafood, you cannot find today, you just can't, a piece of seafood that is completely sustainable, that is free of all of the environmental contaminants that we've spent some time talking about. There's always a catch. And so I think in the very near term, while we are a little bit more expensive, and all new technologies, as you know, [laugh] are, are expensive when they're just getting going before they're kind of at full tilt, scaled production.

And the short-term, I think, you know, in, in early conversations with market partners, have validated this, that those two things, the sustainability conversation, as it pertains to Wildtype and being truly differentiated, and just the absence of all of these contaminants are real viable differentiators. And of course, you know, there's other things that play in the seafood industry, like traceability, like wouldn't it be nice to know exactly where every piece of your seafood came from through the entire supply chain, when it was pulled outta the water, how long has it been frozen, where was it de-boned, how many miles did it travel?

Those kinds of bits of information. I mean, certainly there are small scale providers that do great job at doing that, but largely, that information is not available. And so when we think about the early days, when we don't have the absolute, most pristine replica of what nature is able to do, we do think people are, and we've already heard, a great deal of interest of people supporting what we're trying to do. By the way, I should say, our product is actually pretty darn good.

So we do blind taste tests all the time, and people have a hard time differentiating it between even in like a complex, like nigiri format, the most sort of prized farm salmon, which is this Chinook King Salmon from New Zealand. So I, I think we're in decent shape, but you right that, I think in the long run, this beautiful thing that nature can produce, that is the gold standard of what animal protein should be, should be, continue to be the most prized thing, and ideally, priced appropriately. So demand and supply equilibrate.

Jason Jacobs: Now you mentioned health as one of the benefits. And I wanna talk about that for a minute, because it's kind of funny, on the one hand, you see people knock cultivated meat and the cultivated protein, and they say, "Well, there's so many unknown unknowns." Right? From a health standpoint. And I do wanna talk about that, because with anything new, there's unknown unknowns, and so what gives you the confidence that it's truly healthy and what is our understanding of the ingredients and process and things like that, to be able to say confidently, from a medical standpoint, that it is truly healthy?

But the thing that's funny about it is that some of those people that say, "Well, unknown unknowns" like, they're probably the same people that say, like, "Get the calories off the menu, I just want to enjoy my food. Like I want the most delicious food-

Justin Kolbeck: [laughs].

Jason Jacobs: ... I don't care about healthy." Right? Or I, or, "Maybe I, I think I care, but I don't really care." But all of a sudden, with this new thing, I'm gonna suddenly get all righteous about caring. And so it's like, well, either you care or you don't. How do you think about that? What gives you the conviction that this is healthy, and what are the unknown unknowns, if any?

Justin Kolbeck: Well, we're at a bit of a benefit, in that my co-founder is a medical doctor, so [laugh] we certainly have no interest in putting things out into the market that are unhealthy. And I think with his training and obviously the team that we have, we have a really thorough understanding of every single input that we use in our process, which are not weird by the way. I can talk more about that if you're interested. It's basically, the nutrients that we use to grow ourselves, which is basically fancy Gatorade and some special proteins, which are totally natural, salmon cells so just natural salmon.

And then plant-based ingredients that we use to help structure the, the product for our scaffold. All of those are available. You can get those in grocery stores. So there's nothing weird, going into the process. So we shouldn't expect that there would be anything weird coming out of the product. And we did realize, however, that consumer acceptance is gonna, to a large extent, especially for some new form of food production, is gonna hinge on how well and how responsibly we worked with the food regulators in this country.

And so we proactively reached out to FDA, way back in 2019, to start a multi-year safety assessment with them. And we've had honestly a really positive experience with them, a lot of back and forth iteration, as they've been learning about this kind of technology and all the pieces and all of the inputs and quantification of outputs, both in terms of like nutrition and compositional analysis and so on, and having great conversations about labeling and nomenclature. A lot of that is actually in the public domain. You can read about Wildtype responding to FDA's request for information on nomenclature, for example, it's on FDA's website.

And so I, I think that process should give consumers a lot of confidence that we've thought about this, we've turned over every rock over the last three years with FDA. And when that process is complete, we plan to make our safety submission public. So people can see how we got to that conclusion. And yeah, it's gonna take time. So there's gonna be the doubters, as you pointed out, that are gonna wanna hold off, and maybe they're a little bit less anxious to kind of be the first one in the shoot to try something produced in a novel way.

But once it's on the market for 2, 3, 4, or 5 years, I think it'll get a lot less exciting. And we actually have an example of that in the market today. So a company called Eat Just has launched a cultivated chicken nugget at a few restaurants in Singapore, and it's been in the market for the last year or two. And so I haven't heard anything negative about the unknown unknowns cropping up from that. And, and we shouldn't be surprised 'cause for all the reasons I mentioned. So I think that's how we get there.

We have a good, open, transparent communication with our government, you know, regulatory authorities, and then we sort of publish the results of that, and we get in the market and just let people get comfortable with it.

Jason Jacobs: And it'd be great to double-click on the process of actually scaling up the tech and improving the offering from a technology and operations standpoint, and then maybe do that same thing around the go-to market, in terms of the strategy, the approach, the phasing, and where you're at today on both of those fronts. Th- those really should be separate questions, so lumping 'em together is just ridiculous because each of them, we could spend a whole hour on [laughs].

Justin Kolbeck: Yeah. Well, let's start with, with scaling up since you asked first, and I think that's, before we're able to launch a product, we obviously need to do that, right? We need to make enough of it to have it done. Like I said earlier, the volumes of seafood that are produced globally are just astronomically high. And so even to have a tinies flash in this giant sea, we need to be making a lot of fish. So here's how we've kind of approached it. So we built, very intentionally, a quick pilot plant that came online last June, in San Francisco. And the idea there was not to produce giant quantities of food for commercial production, but to really iterate on, let's call it a medium scale production.

And so that facility has a handful of fairly large tanks that we used to grow ourselves, and call 'em cultivators or bio reactors if you want to get technical. It has the ability to keep those equipment clean. Like, and taking a step back for a second to talk about the process in a little bit more depth, it's not all that different, at least the first part of the process from a brewery. So you need equipment to clean these big, stainless steel tanks. So we use the same kind of equipment that's used in brewing, frankly, to do that.

You need the tanks themselves to grow the cells. You need mixing tanks to kind of mix up the nutrients. You need large refrigerators to keep those nutrients cool. And then you need a space to make the plant-based scaffolds that we make. And then there's an intermediary step where we have to separate that Gatorade mix for the cells, from the cells themselves, and then, you know, we're working on trying to reuse a lot of that stuff for a subsequent batch. So what we've tried to do with this facility was just iterate, as quickly as we can, on these processes without having to invest in multi-year construction projects.

And that actually served us pretty well. And now we're in the process of building out a slightly larger facility in San Francisco, as well as a much bigger one elsewhere. We can talk a little bit more about later. And so I'd say that the real big challenges here are a few. One, just from a practical perspective, [laughs] in 2022, I know this sounds so obvious, but it's been a real challenge for us, is just getting the equipment we need at, at a reasonable timeline. And I'll give you an example. So some of the tanks that we use to grow ourselves have like a year lead time.

The challenge is that when we order that tank to when we receive it, our process and our technologies evolved a lot, as you would expect it to, right? [laughs] in the early days. And so you end up with kind of a time machine effect where the equipment you're getting is effectively a year-old already, and your process has moved on a little bit. So that makes it sort of maddeningly difficult to iterate quickly when lead times are so long. And we've been kind of thinking creatively about how we can work around that.

Another challenge I'd say is, very little, is known about seafood cells. So we know a lot about human cells, we know a lot about mouse cells and other things that we use as model species to kind of study humans in biology. But there hasn't really been a really compelling reason to dig deep on seafood. And so we've had to learn a heck of a lot, really true scientific discovery almost, about how to keep fish cells healthy outside of a fish. And it's to a large extent a function of their environment.

So what kind of food are you giving them? How warm are you keeping their home? How are you agitating and moving those nutrients around in their home? Those are the kinds of questions that we've been working on. But to be honest, getting those cells to convert their nutrients efficiently into more salmon has been a real big challenge and one that we've pointed a great deal, a huge amount of our team toward. And then there are just like very practical things, [laughs] like right now, the process that we use for making our plant-based scaffold is very manual, and so we're in the process of automating that, which to a certain extent is part of the least stressful part, 'cause there's been automation, engineering firms and consultants for decades, that are very good at what they do, but at the same time, this is a, a pretty new use.

So getting them up to speed and moving quickly as we can, has been a challenge. So I'd say that just gives you maybe a flavor for what we're working through as we've been scaling this up. It's been obviously a ton of fun, but also I wish we could move so much faster, but we have these constraints, some from the supply chain and then some from the cells themselves, right? Like we just can only go as fast as the cells can grow. Right? So that dictates how many times we can try something in a year. And so therefore we have to think very creatively about running things in parallel and so on. I think we've gotten pretty good at that over the years.

Jason Jacobs: Now, it'd be also interesting to talk about the types of capital and the phasing to get that infrastructure built and the technology proven out. But before we do that, maybe we can switch gears and talk about the go-to market, so that, that way, when we talk about the capital, we can kind of cross reference that with the context of market validation and where you've been at, at each milestone.

Justin Kolbeck: Yeah. So on the, on the market side, where we've had the most interest, I would say, would be from chefs and restaurants and restaurant groups that... I really care a lot about sustainability. They're the ones that have reached out to us, they have been the ones that have been most receptive when we've reached out to them for new forms of salmon and other seafood in their restaurants. [laughs] it's funny, a lot of people are like, "Oh, you're just following the impossible model." And I think the reason impossible launched in restaurants, I mean, there are few, but I think the same is true for us, is that, as I was mentioning earlier, it just takes a while to build to this capacity. Right?

And you don't get to launch in one Kroger store in the US. They want to do a pilot in like 50 stores [laughs] around the world, around the country. Right? And it just takes time to kind of get your production scale up to that level to be able to service a customer like that. And so we very intentionally decided to focus on a handful of restaurants. Some of those have been part of that community that I was talking about earlier, that have been involved in the tasting and iterative improvements of the products over the years.

And so that's how we'll launch, and where we go from there is obviously small, one-off, maybe slightly fancier restaurants, but not super inaccessible, to bigger chains like Pokeworks, for example. And then from there, we go to the grocery stores. And generally the arc of what we're trying to achieve is smaller scale, maybe more limited availability to large scale, low cost for everyone-type of product. So if you like show up in your grocery store, your favorite grocery store and you go to the seafood section, you'll find some Wildtype filets on ice, next to the other products that are available that day, as you would in the freezer section, as you would in the prepackaged, like your honey soy, ginger, ready-to-go thing you might find you in grocery store just popped in your pan and off you go.

So that's really what the go-to market arc looks like. And although we've worked on other types of products that aren't seafood-related, we really intend to stay focused on seafood for the duration of our company's future.

Jason Jacobs: And coming back around, yeah, how you've capitalized the company to date, can you talk about how many rounds of capital have come into the company? What types of capital? And also maybe just a quick snapshot of your progress at the time and your goals for that stage?

Justin Kolbeck: So we've had three rounds of funding, a seed, a series A, and a series B. The seed was 3.5 million bucks, the series A was 12.5, and the series B was a hundred million, and it's been VC-led the whole way. Last time, the growth arm of L Catterton, more of a private equity fund, led that round. Um, and we had participation from a lot of strategics, including Cargill and Tamasek in Singapore, and some other smaller players in the food industry. And then in terms of where we were, [laughs] I'd say, gosh, I mean, thinking back on it, for our first series seed, pitches, it was barely recognizable [laughs] as salmon, I would say.

And you know, if you talk to the folks at Spark, who led our series seed round, I think they would agree, but I think they could see the promise there. Right? And where we were heading. Series A looked better, I would say. It was still, if you like looked at our product back then, it was like, okay, "See where it's going, it's not instantly recognizable as salmon." And then for series B, I think we got to the point where you like, "Look at our products on our website." You're like, "Yeah, that's salmon."

And my version of that touring test is to show my kids pictures of... They're smaller. I have two-and-a-half-year-old twins, and I've shown them pictures of our product along the way. And as soon as they started saying like, "That's salmon." I was like, "Yes. Okay. We're there." Right? It's [laughs] like a very basic thing, but I think it's, you know it when you see it, when it comes to such recognizable seafood like salmon. So that's where we were on a product perspective across that timeline.

And then from a scaling perspective, I'd say, along the way, we've been, gosh, the first products we made took us a long time to make, and it was all the entire company did to, [Laughs] just to make those prototypes for a while. Now we reliably host tastings on a, on a very recurring basis every week at the company. So from a scale perspective, that's really been leaps and bounds. And then from a cost perspective, in the early days, we were at hundreds of thousands of dollars per pound, and then series A, tens of thousands, and now we're well under a thousand, coasting toward price parity and then not too distant future.

So that's where we are across the three big pillars of the business, which are always product, first and foremost, followed by scale, and then cost, of course.

Jason Jacobs: And when it comes to scaling up production in certain types of climate tech, it seems like project finance is, I don't know if it's that it's more desirable or that it's more obtainable, but that, I've heard that if you look at the first Cleantech wave, for example, that equity was trying to get over at skis and do a job that equity wasn't best equipped to do, uh, yet you've chosen to scale only with equity to date. Has that been intentional? How have you thought about that? And where does project finance fit in, if at all?

Justin Kolbeck: So we have used a little bit of venture debt along the way, to supplement what we've done with equity. In terms of project finance, when I've talked about it with banks, they typically have suggested like, "Hey, once you're in market and you have multi-year contracts signed, then let's talk." In fairness, I haven't actually, I would say canvased the market for project finance broadly enough. And maybe there are, are funders out there that would be willing to look at a company of our stage.

Jason Jacobs: Oh, whether you like it or not, you're gonna get some inbound from some project finance from this episode, just because of this part right here.

Justin Kolbeck: [laughs] good, good.

Jason Jacobs: [laugh].

Justin Kolbeck: That's right. Yeah. But no, please. Seriously, I'd love to explore that a little bit more, because look, I don't think venture capital is the best source of buying a million dollar piece of equipment, right? Like there are just better ways to do it from a capital structure perspective, but I'll take a step back in time for a second. When, so when, when Aryé and I were first getting started, there was an open question about how this field would be funded. And we actually applied to an SBIR grant through the National Science Foundation, for this kind of work. And I remember the comments we got back, were like, "Hey, really impressive scientific progress. We'd love to see this develop further."

But the one negative one, I- I'll never forget this. The guy said, "Yeah, earth has enough forms of meat and seafood production, we don't need technology like this." [laugh] and I was like, "Okay, I don't know what to say to that, but fine." And so that gives you a sense of like where government funding was at the time. Now in 2022, it's a different ballgame. So there's a center for this kind of research that's literally cellular agriculture, cultivated research at UC Davis, there's a big program also at Tufts now, both being led by really phenomenal researchers. So government funding is flowing in, but it's half a decade behind venture, and maybe that's always gonna be the case with really cutting-edge technologies.

Jason Jacobs: Now, also a strange question, but I'll ask it anyways. And that is, it strikes me that because climate is not a vertical, it's more of a, it's like a mission, but it touches every vertical.

Justin Kolbeck: Yeah.

Jason Jacobs: And then within each vertical, certain companies can be climate-focused and others not, but they could both be a battery company, let's say, or, or something like that. And so when you look at a company like Wildtype, I guess, is it a climate company? And also how do you distinguish, like, is the difference for whether the founders take the time to do an LCA, or not? Or what distinguishes whether a company like Wildtype is a climate company or not in your view?

Justin Kolbeck: Hmm. I've never gotten that question before. [laugh] the answer is hell yes, we are a climate company. And, and I think what drives that is what values and what mission was the company founded to do? And our mission is literally to create the cleanest, most sustainable seafood on the planet. That's an audacious mission. And to do that, then yeah, you're right, we need to do an LCA, and w- we're actually gonna be doing one this summer. It's a starting point. I mean, it's still early since we're not at obviously full scale yet, but it's a starting point, and at least we'll have a baseline.

So I think that's part of it. Part of it, I think, is just what's in the hearts of the founders when they start and what do they care about, but are we selling like a solution to climate? No, we're selling food, right? And that's where things get kind of interesting, because from all the research I've read, anytime somebody's ever studied this, people don't typically buy food products based on their environmental preferences, they tend to buy things based on what tastes good, no surprise there, and also what's affordable and what can they get in their local grocery store?

And so how we intersperse, I think the core values of protecting the wild places in our, on our planet, keeping our oceans, at least as bio-diverse as they are today, if not returning them to a better place, and then trying to keep our oceans as the effective carbon sink, for 93% of our planet's carbon is so important to us. But how do we message that in a way that doesn't detract from the fact that this is just good food, right? That we want people to eat, and that they're gonna be excited to try? That is a really interesting challenge that we've grappled with a little bit.

Jason Jacobs: Well, so in our view, 'cause we, obviously we have a climate fund, it's less important to us that a company outwardly messages that they're climate to their customer base, and to their partners and things like that. And it's more important what they're trying to achieve and how much that drives the mission of the company and the founding team, as you said. So I guess-

Justin Kolbeck: Mm-hmm.

Jason Jacobs: ... I'll turn the question around and say, messaging aside, you talked about mission and how the company was started to protect the oceans and restore biodiversity, or at least keep it the same as it is, and things like that. So, but to make the company successful, the things that you need to do, you need to get the taste right, you need to get the cost right, you need to get the distribution locked down, you need to have the manufacturing capacity, like the texture, the... It's like stuff that doesn't necessarily have anything to do with climate. So given the mission that the company started from, messaging aside, what do you actually do to make sure that you're fulfilling your mission?

Justin Kolbeck: I'll give you a couple examples. So we're looking at a large scale facility now, as I mentioned a little bit earlier. When we were looking at where to locate it in the country, cost was obviously an input, but we didn't want to go into a place that was water-stressed. And the reason is, if you've been watching what's going on in California, for example, during the drought, when we redirect water toward agricultural purposes in a place that isn't naturally abundant with water, it has a lot of unfortunate secondary effects.

Like, I- as I was talking about earlier, the river levels are now so low that salmon can't spawn in there anymore, right? And we're like disrupting this natural cycle of life that has existed for centuries, and if not millennia. And so where we decided to locate our facility was a place that had abundant water, where we could plug into a utilities system that will be carbon-neutral by 2030, without us having to do anything. And then we're actually building this into our economic model, like having zero waste to fully closed, contained system.

Maybe we can even capture our own water that we can use in our process. If we can't use it in our exact process, we can at least provide it to someone else and, and to the economy. So we're taking this really seriously, right? We wanna build a food company that's based on 21st century values. And that means paying attention to the resources we use, the natural resources we use, paying attention to where we decide to locate our facilities, right? So we minimize food miles, for example. Obviously there's a good economic imperative to do that, but we care about the carbon footprint.

Measuring our carbon, as we talked a little bit about. So these aren't like things we're gonna do one day, these are part of our decision-making process today, for our first site.

Jason Jacobs: So I get that. In that example, it's also in your self-interest because if the water gets too low and the government mandates that you can't use it for example, or it's just not there, right? Then it's like you can't run your operations, so it's both for the good of the climate, but also for the company's self-interest. Given how much pressure there is for you to get the cost down, are there examples where you could do things that are better for the climate, but would be more expensive and would actually make the hurdle even steeper for you to clear, to get the cost down to parodies who can be competitive on the retail shelves?

And if so, how do you think about that? And I ask, because even if your climate-motivated, the right answer isn't necessarily to do the purest climate thing, because if your company doesn't make it and doesn't survive, then how does that do anybody any good? Because you like, from an ideal standpoint, checked every box the right way. Right? And so I think a bunch of climate founders out there are gonna listen really closely to how you answer this because it's a tension that every one of us wrestles with.

Justin Kolbeck: I love that question. That's so good. You're right. I have a fiduciary [laughs] responsibility to make us a choice that will be an economically viable thing for the company. You got me thinking about an idea as you were talking, and that is, what if there was a group of philanthropic-minded investors that would meet a company like ours halfway, right? So we've already made a decision to locate in a more water secure environment, pay attention to what our power source is gonna be in the not too distant future, but do I have the ability to do a hundred percent solar power on that building? No.

Would I accept [laugh] either an investment or philanthropic donation or some kind of co-invest, some mechanism to take it one step further beyond what is sort of in Wildtype's immediate economic interest to build? I, and think the answer is yes. And there's companies, not just like us, but like, like you said, battery companies, next-generation fuel companies, and the list goes on and on, that are building facilities all the time. And I think they're trying hard to square the circle when it comes to all of these competing interests.

But at the end of the day, we have to pick a site that we can get online, that makes sense. And the, you know, the economics are viable, and we're not always gonna pick a sort of fully optimized LEED [laughs] business or an office for our businesses. So I think that's maybe a place where different sectors can combine to build something that otherwise wouldn't be built.

Jason Jacobs: Yeah. I mean, uh, before we started recording, you were talking about how you still do finance and HR yourself, and I can't help but think that no matter how mission-oriented someone is, if they're still doing finance and HR themselves to cut cost, they're not gonna spring for the fancy, energy-efficient light bulbs.

Justin Kolbeck: [laughs].

Jason Jacobs: [laughs].

Justin Kolbeck: Yes, unless... That's right. Unless the, uh, unless it's the cheaper option in the long run, and I'll do the break-even calculation, since I'm the finance guy.

Jason Jacobs: Well, I know we're almost out of time here. One question I didn't ask that I- I'm really dying to know is just, in more and more industries, we are seeing that at an earlier and earlier stage, startups are starting to think about resource to and advocate for certain policies that can help accelerate their businesses. How do you think about policy? How relevant is it to Wildtype at this stage, and if, and how do you, or will you resource to that area over time?

Justin Kolbeck: So we haven't invested much in policy advocacy, to be honest, I haven't even given a ton of thought to what that would look like. We would never go as far to ask for subsidies or anything like that. We wanna compete in the market fairly on our own merit. But I think one thing that would be interesting for policy makers to think a little bit about is, in 10 years, is it the right thing for the planet to have some measure of resources used on the packaging for our food? And that could be carbon, it could be hectares of land, it could be water, it could be whatever. We could figure out what to measure.

But should we arm consumers with that powerful tool to make informed decisions? I think the answer is yes. I mean, we're doing it. I don't understand why other people in the industry wouldn't wanna do it. Obviously it's additional cost, et cetera, but if we want a level playing field, I think we need everybody playing by the same rules. And I think more information, more transparency for consumers is a big part of that.

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