Meati Foods faces significant operational challenges after a U.S. lender unexpectedly withdrew financial support. This situation places the company at risk of going out of business.
On March 7, a Worker Adjustment and Retraining Notification (WARN) was submitted to Colorado authorities, indicating that Meati Foods had to close its manufacturing facility in Thornton. This closure stems from substantial financing constraints.
As a direct consequence of this financial instability, Meati Foods plans to permanently terminate 150 employees. The first round of layoffs is scheduled for May 6, emphasizing the urgency of the situation.
Meati Foods explained in their WARN filing, “We are taking this action because our lender unexpectedly removed cash from our accounts and took control of remaining cash reserves on Friday, February 28, and the action was not reasonably foreseeable.” This unexpected move has severely impacted the company’s financial footing.
“Based on this action, we do not have sufficient funding to continue operating,” the company added, highlighting the gravity of their financial state.
Interestingly, the signatory on the WARN notice was redacted, leaving questions about who is officially accountable.
In their WARN filing, Meati Foods reiterated, “The result of the lender’s unexpected action is that we have to shut down our manufacturing facility.” They further noted, “We are notifying you of this decision as soon as it was practicable to do so, taking into account the great difficulties we face in projecting staffing needs under these unprecedented circumstances.”
Co-founded by former CEO Tyler Huggins and Chief Technology Officer Justin Whiteley, Meati Foods specializes in producing meat alternatives derived from mycelium—the root structure of fungi typically found in mushrooms.
In early 2022, Phil Graves was appointed CEO to succeed Huggins, who transitioned to Chief Innovation Officer, indicating a shift in leadership focus.
Meati Foods secured $150 million in mid-2022 through a Series C funding round to support the development of their “mega ranch” in Thornton, bringing total funding at that time to $228 million.
Contributors to the Series C round included notable venture-capital firms such as Revolution Growth and Cultivate Next, the latter being affiliated with fast-food chain Chipotle Mexican Grill. Other participants included Grosvenor Food & AgTech.
Prior investors like Acre Venture Partners, Congruent Ventures, Tao Capital, and Prelude Ventures all played a role in prior funding efforts during Series A and B financing rounds in 2020 and 2021, respectively.