Friends, 

Eels may be the strangest animals on Earth. Here are seven indicative facts: 

1. They have toxic blood. Eel blood is so poisonous that even a small amount is fatal to humans. It’s only by cooking that it becomes edible.

2. They live a surprisingly long time. Eels can live in the wild for more than 50 years, while one captive specimen reached 155. 

3. They go through Pokémon-like evolutions. Eels go through at least three extreme body transformations, metamorphosing from translucent glass eels to dark, opaque adults. 

4. Their origins are mysterious.  Eel breeding is so mysterious that humans have still never seen a European eel spawn in the wild.

5. They travel long distances…on land. Eels crawl across thousands of miles of land and can even wriggle up dam walls. This is how they travel from the ocean to freshwater lakes and streams. 

6. They’re illegally smuggled across borders. Demand has outstripped supply by so much that a criminal enterprise has emerged. Billions of dollars of eels have been trafficked internationally.

7. They’ve perplexed thinkers for millennia. Aristotle was so confused by where eels came from that he decided they rose spontaneously from the mud. 

I could have included a bunch more! 

When I heard an Israeli startup, Forsea Foods was attempting to cultivate eel from stem cells, I was immediately fascinated. Creating lab-grown meat is tricky at the best of times, but the idea of fabricating the flesh of the most unabashedly odd creature on the planet struck me as borderline insane, extremely innovative, and possibly quite important.

Because of their complexity, eels are nearly impossible to breed in captivity. As demand has increased, spurred by increased appetites in China and South Korea, supply has struggled to keep pace, with rampant overfishing decimating the eel population by as much as 98%. This dynamic makes a lab-grown alternative particularly persuasive, giving it a better chance of capturing the $4.3 billion global eel market. In time, Forsea hopes to fabricate other desirable, endangered seafood. 

Over the past few months, we’ve been digging into the story, learning about the state of lab-grown meat, the promise of the global eel market, Forsea Food’s innovative “Tesla-like” approach, and the eel's many eccentricities. 

I’m extremely excited to have partnered with Joseph Rachman on this piece, a gifted journalist with on-the-ground expertise in the Asian markets that dominate the eel trade. As I think you’ll see, working with Joseph has allowed us to go even deeper into the subject, bringing in perspectives from eel experts, Indonesian fish farmers, and local government officials. In the coming months, we plan to work with other new voices to keep elevating the quality of our work. 

(On that note, if you’re an experienced writer who wants to craft the best pieces of your life with a publication that values depth, ingenuity, and elegant prose, I’d love to hear from you.)

A small ask: If you liked this piece, I’d be grateful if you’d consider tapping the ❤️ above! It helps us understand which pieces you like best and supports our growth. Thank you!

50 game-changing startups – all in one place. 

Two weeks ago we released the inaugural edition of Future 50, a database featuring the world’s highest-potential startups, supported by our friends at Mercury.

The Future 50 is the result of months of collecting nominations from leading VCs, researching different companies, and reviewing private data. You won’t want to miss it. Here’s a sneak peek of the startups you’ll hear about: 

• The AI company detecting wildfires faster

• The “Saudi Aramco of carbon removal” reforesting the Amazon

• The maternal healthcare provider that’s already impacted 3M lives

• The tech-powered trucking company that’s surpassed $45M in revenue 

…and 46 others. Each company is accompanied by a detailed description and clear rationale of why we think you should have it on your radar.

Check it out here

Actionable insights

If you only have a few minutes to spare, here’s what investors, operators, and founders should know about the quest to cultivate edible eels in labs.

1. The real eel. You have seen an eel or at least a picture of one, but there’s a good chance you don’t know the real eel. These are some of Earth’s strangest creatures, equipped with poisonous blood, multiple body transformations, metamorphosing digestive systems, and long lifespans. European eels are known to travel thousands of miles over land to reach freshwater lakes before returning to the ocean to spawn. 

2. The price is right. The lab-grown meat industry has struggled to create products that are price-competitive with natural ones. Beef costs roughly $5 per kilogram, while chicken comes in at $1.50. Given the complexities of growing meat from stem cells, achieving parity has proven challenging. To give itself a shorter path to profitability, the Israeli startup Forsea Foods has chosen to focus on eel, a popular fish that sells at $35 per kilogram. It represents a differentiated approach to a challenging sector. 

3. Growing appetites. Aficionados of Japanese cuisine will be familiar with eel’s many preparations. Unagi kabayaki, in which an eel is grilled and seasoned with sweet soy, is one of the country’s favorite dishes. The global eel market is worth $4.3 billion, with 70% of consumption occurring in Japan. It’s also growing, driven by increasing demand in China and South Korea.  

4. Go fish. Demand for eels has gotten so high that a bustling smuggling trade has emerged. Narcotics gangs transport billions of dollars worth of baby glass eels across international borders, participating in the “largest wildlife crime on Earth.” Trafficking has been buoyed by the fact that it’s nearly impossible to farm eel, a significant difference from other popular species like salmon, tilapia, and trout.  

5. Tastemakers. On June 4, Forsea Foods invited select guests to sample its lab-grown eel. The verdict? Pretty, pretty, pretty good. Though naturally, there’s significant room for improvement. For the company to truly take off, it will have to persuade picky eaters, many of whom are skeptical about cultivated meats. Approximately 30% of Japanese consumers—eel’s largest market—would be unwilling to try synthetic seafood. 

“Throughout the Middle Ages and in modern times, too, there was a veritable hunt for male eels,” wrote a young Sigmund Freud in 1876. As a twenty-year-old research student in Trieste, Italy, the future founder of psychoanalysis was part of that hunt, spending his days dissecting the bodies of the long, rippled anguilliformes. 

If our cosmos has a creator, eels are an indication that they possess eccentric tastes. It begins with the name, an odd double vowel sliding across an ocean floor. A glance confirms the viewer’s suspicion that one is dealing with a curious predator, a floating comma with fins, a tilde with teeth. To watch them flash about a tank at your local aquarium or confront them on a scuba dive is to feel both interest and unease, drawn in by a dark magnetism. 

Neither name nor appearance truly captures the eel’s perplexing essence, though. These are magical fish that carve out enigmatic existences. Though eels begin their lives in saltwater, they migrate to freshwater, eventually returning to the ocean. Each of these trips necessitates a full transformation, which is why an eel takes so many forms: as thin, crystalline “glass eels,” opaque adolescents, and grim stone-colored adults. They live for fifty years or more, and though they appear to have the traction of a bar of wet soap, they have been known to climb dam walls in their astonishing, thousand-mile transits to our lakes and ponds. Oh, and their blood is toxic. 

What brought Freud to Italy’s Far East was yet another of the eel’s mysteries: their genitals. Eels only develop sexual organs later in life, as they prepare to return to the ocean to breed, which makes determining their sex especially difficult. The young zoology student spent his days desperately searching for eel gonads as part of a research team’s quest to uncover its reproductive mysteries. In the evenings, Freud wandered the streets with “hands stained white and red with the blood of marine animals,” he later wrote. “Cell detritus swims before my eyes, which disturbs me even in my dreams, in my thoughts nothing but the great problems connected with the world of ducts, testicles, and ovaries.” What came next for Freud is, as they say, history.

Beyond their mysteriousness, eels possess another key trait: deliciousness. Though not to everyone’s taste, the slippery fish are prized in dishes around the world. England serves them cold and jellied in aspic, Spain sautees adolescent “elver” eels with oil and garlic, and Vietnam stir-fries them with bean sprouts and coriander. In terms of consumption volume, none of these countries compare to Japan, where unagi tops sushi rolls, sizzles on grills, and illuminates donburi.

Given eel’s complexity in form and taste, the idea of growing them in a lab sounds far-fetched. How can you cultivate a changeling? What numinous petri dish permits the construction of a naturally poisonous, sexually complex dinner dish? Generating a passable facsimile of a hamburger – uniform in taste and texture – has proven a significant challenge for the cultured meat movement. What hope does the eel have? 

Forsea Foods, an Israeli startup, is undaunted by the challenge. Though the Israeli startup’s research is markedly less bloody than Freud’s, it contains similar revolutionary potential to the psychoanalyst’s theories. In the three years since its founding, Forsea has carved an alternative path in the lab-grown meat landscape, eschewing popular products like beef and pork for eel. It has done so with minimal venture funding and has succeeded in constructing a promising prototype. Earlier this year, it invited a select group of diners to try its creation. 

To explore this story, we spoke with an extensive list of sources, including Forsea’s leadership, cellular agriculture investors, global eel experts, and Indonesian fishery operators. In doing so, we’ve illuminated an unheralded, curious, and potentially lucrative corner of the cultivated meat market and the strange, cryptic world of the eel. 

Golden grams

The Wright Brothers’ moment for lab-grown meat arrived in 2013 in the humble form of an 85-gram burger. Produced by Professor Mark Post and with the research funded by Sergey Brin of Google, the burger was a revolution on a plate. It also had a long way to go. Two food critics who tried it said that while Post’s patty was definitely meat, it possessed an odd flavor and lacked the fats and juiciness one associates with a burger. Had they been forced to foot the bill, the reviewers wouldn’t have found it value for money given that it cost $330,000 to make.

Post’s achievement catalyzed a sector and set off a frenzy. Lab-grown meat offered a solution to the massive environmental destruction and suffering caused by traditional animal agriculture. Meanwhile, investors drooled at the thought of disrupting a global meat industry valued at $1.4 trillion in 2023 and expected to grow as consumer wealth increases.

In the intervening eleven years, a slew of well-funded startups have come to market to attempt to capitalize on the industry. Upside Foods (formerly Memphis Meats) has ingested nearly $600 million to create synthetic chicken, while Mark Post’s own company, Mosa Meats, has consumed $138 million to scale up his innovation. (Beyond Meat, though traded publicly, is best known as a provider of plant-based “meats,” a different proposition.)

Despite the talent and capital deployed, creating a product that is delicious, scalable, and price competitive remains elusive. “Unfortunately, there’s been no major success stories, certainly not from a financial perspective,” says Andrew Chow, co-founder of Agronomics, one of the largest investors in the foodtech space.

Only four companies have received regulatory approval to sell cultivated meat in any jurisdiction, and sales have been limited to a few curious or discerning customers. In recent years, funding for startups in the field has also dried up. Global interest rate hikes are part of the story, but so is disillusionment among investors who had hoped for faster results only to see companies that once raked in funds fail to deliver. In 2023, funding for cultivated meat declined by 78%.

The cost has proven to be the most significant barrier. The industry consensus is that for cultivated meat to be consumed on a mass scale, it needs to achieve price parity with a traditional product from a slaughtered animal. So far, no one has managed to do that.

“We knew it was challenging, we knew it was going to take a lot of research and development efforts,” said Amir Zaidman, founder and chief business officer for The Kitchen Hub, an Israeli foodtech incubator that invested in Forsea. “But I think, though we knew it would take several years, we didn’t anticipate the full depth of research that was required.” 

The Tesla strategy

Forsea is betting that eel presents a potential solution to the cost conundrum. Given the sheer volume of R&D spending the sector still requires, CEO Roee Nir believes starting with a premium offering makes the most sense rather than targeting popular low-cost products like hamburger patties or sausage links. In that respect, Forsea’s approach emulates Tesla’s, settling for a smaller beachhead market size to put profitability in sight. 

In 2022, the value of the global eel market stood at $4.3 billion, a fraction of the size of beef ($526.5 billion), chicken ($151.9 billion), or pork ($279.90 billion). 

However, whereas chicken’s price usually hovers around $1.50 per kilogram and beef sells at around $5 per kilogram, eel sells at around $35 per kilogram in Japan. That makes reaching price parity with a cultured product much less daunting.

Forsea’s decision to focus on eel is no accident, but rather the result of a considered process. When Nir founded the company in 2021, he knew he wanted to specialize in seafood. In part, that was inspired by the competitive dynamics in the sector. As mentioned, well-funded companies had emerged to produce cellular chicken and beef, but few were taking on fish. Human’s natural seafood consumption habits also helped, with dozens of different species consumed. That left room for multiple winners. For example, BlueNalu has made substantial progress in culturing the fatty belly of bluefin tuna, but this poses no direct threat to Forsea.

Once settled on seafood, Nir narrowed his options further, filtering by three dimensions. The CEO specifically looked for fish with high price points, market sizes of $1 billion or more, and endangered populations. “Eel really stood out in this area in terms of the amazing potential that it has without any ability to supply it,” Nir said. 

Not only is eel meat already expensive, but its price looks set to rise. Consumers continue to tuck in, but the global population is cratering, threatened by climate change, overfishing, and fierce smuggling. Since 1980, for example, the European eel population has fallen by 98%. Supply has declined so rapidly that some environmental scientists have called for it to be removed from menus. 

Forsea plans to launch a cultivated eel product commercially by 2026, just five years after its founding, an unusually quick rollout. It will start in Japan, where it is already seeking regulatory approval. The country accounts for a large share of eel consumption, with citizens eating 50,000 tons a year, by some estimates. Older benchmarks suggest that it accounts for as much as 70% of global consumption. Eel is embedded in Japanese cultural events, such as the “day of the ox,” a celebration in which millions feast on unagi kabayaki – a classic dish where eel is butterflied, doused in sweet soy, and grilled. 

According to Nir, the only hurdles in Forsea’s path are obtaining regulatory approval and the capital to scale up the product. How can the startup CEO be so confident, given the sluggish pace of innovation in the sector? The answer lies with Forsea’s cutting-edge technology.

The organoid revolution

On paper, the process of growing cultivated meat sounds simple. First, stem cells – cells that can turn into any other type of cell – are extracted from an animal. The cells are then “immortalized,” modified so they can multiply forever instead of aging and ceasing to replicate over time. These immortalized cells are then placed in huge sterile steel bioreactors, which allow for careful control of the environment. There, they sit suspended in a medium. This soup of hormones, proteins, and nutrients prompts the stem cells to develop into muscle, fat, or skin, as desired and provides them with the food they need to develop. Once you have enough cells, harvest them, cook them, and voilá! Bon appétit.

Until the last decade, cell cultivation has mainly been the domain of the pharmaceutical sector, used for cancer research, vaccine production, and gene therapy. This type of stem cell work has four distinctive traits that separate it from lab-grown meat.

1. Low volume. The pharmaceutical applications outlined typically require a small number of cells to work. There’s no need for these companies to scale processing into the tons. 

2. High fixed costs. Production relies on highly specialized tools and expensive raw materials, both of which contribute to a capital-intensive process.  

3. High operational costs. The smallest contamination can compromise a pharmaceutical product, further driving up costs and increasing complexity.  

4. Extreme pricing power. Consumers often have no alternatives to a medicinal product, meaning that pharma companies can sell at elevated prices. This essentially offsets the difficulties incurred by the first three traits. 

In short, pharma cell cultivation is low volume, high cost, and high margin.

Cultivated meat has very different requirements. The food industry is extremely high volume, with low costs, and low margins. For consumers in the developed world, cheap meat is sitting on every supermarket shelf. And, since prices are low, profit comes from selling lots of it. Each year, the world produces over 350 million tons of meat. Even eel production runs into the hundreds of thousands of tons – with production and consumption concentrated in East Asia. This is mass production in the most extreme sense of the word.

Some researchers, looking at these challenges, have declared it impossible to make cultivated meat commercially viable. Naturally, members of the industry don’t share such pessimism and have some evidence to justify their bullishness. Andrew Chow of Agronomics claims that several of the companies he’s invested in have already “blasted through” the price assumptions of techno-skeptics. Reducing the costs of raw materials (especially mediums) and operating at “food-grade” rather than “pharma-grade” standards have delivered key early wins.

Roee Nir believes that Forsea’s biggest advantage is its approach to cell cultivation, which he argues is significantly more efficient. “What we’re doing is we’re building organoids, mini-tissues that spontaneously differentiate into edible cells,” Nir said. This is the technology Forsea was founded on.

Keep reading

Puzzler

Respond to this email for a hint. 

Four crows sit on a fence. A farmer shoots one of them. How many of them are left on the fence?

Because I have a brain held together by loose string and Silly Putty, I forgot to include riddles in the several recent editions, which means that our winners hail from a little bit ago. Congratulations to Michael O, Barry R, David G, Cagdas A, Jordan G, Scott M, Emerson K, and Tom R for deciphering this puzzler:

What is more useful when it is broken?

The answer? An egg. Other clever answers: a horse, a glowstick, and a cypher. 

Until next time,

Mario