Plant-based fish maker New School Foods reels in $12M

New School Foods, a Toronto-based startup that makes alternative protein, raised $12 million in seed funding, the company tells Axios.

Why it matters: The funding comes as alt-protein makers have struggled to keep momentum and expand into new types of products. New School is raising money when much of the sector is seeing layoffs, valuation drops and lower demand for fake meat.

Details: Lever VC led the round, which also included grant funding from Sustainable Development Technology Canada and Protein Industry Canada.

• Lever VC is getting a board observer seat as part of the deal, New School Foods CEO Christopher Bryson tells Axios.
• Blue Horizon, Hatch, Good Startup and Alwyn Capital also participated in the round. Bryson declined to disclose its valuation.

How it works: New School Foods says it uses a different technique to create plant-based muscle fibers in a way that mimics traditional animal and fish protein.

• Its process includes freezing a plant-based gelatin block from the bottom up to create pre-measured icicle channels that are then filled with the alternative protein replacement. The proteins act more like standard raw meat, Bryson says.
• Once set, the molded fibers are assembled to create an uncooked whole meat alternative. The company currently makes salmon filets, but Bryson says it can create other proteins.
• By comparison, Impossible Foods and Beyond Meat use a process called high-moisture extrusion, which involves high temperatures and effectively pre-cooks the protein prior to sale.

Of note: New School Foods is planning to first sell to restaurants.