After securing $18 million in Series A funding, startup New Wave Foods will bringing a plant-based shrimp alternative to restaurants and cafeterias this year.
New Wave Foods
Shrimp is the top seafood eaten in America, and a women-led startup is now bringing a plant-based alternative made from seaweed and mung bean to market, thanks to fresh funding.
New Wave Foods today announced it raised $18 million in a Series A round, led by New Enterprise Associates and Evolution VC Partners. It also includes Tyson Foods’ venture capital arm, Tyson Ventures, which first invested in the company in 2019. Now, the alternative seafood market is catching on.
“To have the $18 million raised is an enormous milestone for us. What it really sets us up for is our intent, which is to disrupt a $9 billion market,” New Wave CEO Mary McGovern said. It is starting with the food service space, with plans to debut in cafeterias and restaurants this year.
Startups like Good Catch and Finless Foods have also raised capital recently, but New Wave is the leading player concentrated on shrimp. That’s been its focus from the start. The company was founded in 2015, just as plant-based foods were becoming more mainstream, when Michelle Wolf—who has a background in material science and biomedical engineering—met oceanographer Dominique Barnes. Together, they identified sustainability problems in the seafood supply chain, and combined their expertise to make a positive impact and capitalize on a gap in the market.
“That was one of the reasons I got into it, because I was seeing the interest that folks were having in Impossible and Beyond Meat, but no one was looking at seafood,” said Wolf, who is now CTO and a 2021 Forbes 30 Under 30 honoree.
Shrimp’s unique texture and “snap,” however, are particular—and not easy to recreate. It took five years and $8 million for New Wave to engineer the product’s formula, working with a certified master chef from the Culinary Institute of America. Eventually, seaweed-derived ingredients, married with a functional protein, created the product New Wave is launching, one that is not without its secrets.
“We protect the formula like it’s Coca Cola,” McGovern said. “Ingredients are mixed in one location and then brought to the manufacturing locations so that no one who is in the production arena receives the entire formula.”
The new round of funding will help New Wave ramp up production as it hits the menus of cafeterias and restaurants with its branded product—think like the Impossible Whopper. It’s a smart first move for the startup, which says 80% of shrimp is consumed in food service. (For now, New Wave has no plans to sell in stores or online.) The company is also working on sauced and breaded versions of their base shrimp product.
Overall sales for fish and seafood alternatives still represent a small fraction of the plant-based sector. According to the Good Food Institute, annual sales total just $10 million in the United States, compared to billions for meat alternatives. Still, the growing appetite for plant-based food, which exploded during the pandemic, is likely to extend to seafood as consumers continue to experiment. That’s the larger trend the startup is betting on as it expects to expand beyond shrimp into other shellfish alternatives.
“Some genies are hard to put back in the bottle,” said New Enterprise Associates General Partner Liza Landsman, who is joining the company’s board of directors as part of the round. “I don’t think consumers are suddenly going to go back to eating steak six nights a week.”