• Because Animals is bringing clean meat to the pet food industry with cat treats made from cultured mouse cells.
• The start-up's co-founders, Shannon Falconer and Joshua Errett, are both longtime animal rescue volunteers.
• The market for meat alternatives, including clean meat, is expected to reach $140 billion over the next decade, or about 10% of the $1.4 trillion global meat industry, according to Barclays forecasts.

The CEO of pet food start-up Because Animals, Shannon Falconer, doesn't eat meat and hasn't for years, but the former Stanford microbiologist and longtime animal rescue volunteer says she never denied her pets the meat they craved. After all, cats are carnivores and dogs are omnivores in the wild.

Falconer and Because Animals co-founder Joshua Errett (also an experienced animal rescuer) have been working to make pet foods that cater to cats' and dogs' "ancestral diet," but do not require slaughtering animals, or raising them in an industrial setting.

This week, the start-up is bringing its Harmless Hunt Cultured Mouse Cat Treats, their first clean meat product, to SuperZoo one of the biggest trade shows in the pet food industry.

The treats are made with mouse tissue grown from stem cells in a food-grade bioreactor on a vegan medium, Falconer explained. No mice were killed to make the treats, but scientists had to take cells from the ears of donor mice to get started. The process involved putting a mouse under a mild anesthetic while their ear was pierced.

Two years later, the donor mice are doing well, Falconer says. Employees of Because Animals adopted all three of them, and they live in a rather plush mouse house.

Most companies involved in the nascent clean meat industry are focused on producing food for humans.

These include: the Dutch start-up Mosa Meat which garnered buzz with the world's first cultured beef burger in 2013; Israeli venture Aleph Farms, which is making "slaughter-free steaks"; Upside Foods in California, which is making cultured chicken and duck; and Bluu Biosciences developers of cultured seafoods from fish cells, among many others.

As CNBC previously reported, the market for alternative meat -- including clean meat -- is expected to reach $140 billion over the next decade, capturing about 10% of the $1.4 trillion global meat industry.

Clean meat is not without its critics. Nobody has managed to scale lab-grown meat production to levels that show promise for feeding the world quite yet. 

Additionally, University of Oxford researchers have noted, "It is not yet clear what the emissions footprints of real cultured production systems will look like." At the same time, animal tech advances promise to make the traditional meat industry healthier, and more sustainable.

Still, venture investors have jumped at the opportunity to disrupt the traditional industry, and hopefully, lessen the negative environmental impacts of global meat consumption. According to a PitchBook analysis, 66 clean meat start-ups have raised $1.77 billion in venture funding from 382 distinct investors already.

For its part, Because Animals has raised $6.7 million to date, from investors including SOSV, Draper Associates and Orkla. SOSV is one of the most active investors in this space, with at least 10 clean meat companies in its portfolio as of July 2021.

A general partner with SOSV, Bill Liao, said Because Animals may cut a faster path to mass production than other clean meat companies.

For one, Because Animals isn't making tiny mouse meat steaks -- it just needs to produce enough cultured mouse tissue to give its pet food a flavor profile cats and dogs will love. (The company's new treats do include other ingredients like cultured yeasts and pumpkin, Falconer told CNBC.)

He added, "One of the biggest challenges in cellular agriculture is sustainable, inexpensive media." Because Animals has developed that very thing — and it's vegan.

Many other clean meat ventures have relied on fetal bovine serum, derived from the blood of animals, to help grow and duplicate animal cells for their products. FBS is highly expensive, however, and its use rankles animal rights and climate activists.

Because Animals developed its own animal-free formulation, and Liao believes the technology will be broadly applicable, possibly beyond pet foods.

Falconer, for the time being, says she is focused on the growing pet food category.

The CEO decided to pursue sustainable pet food while she was working as a postdoctoral research fellow at Stanford University's School of Medicine, she recalls.

Research animals were all around her, and she didn't have the expertise to eliminate scientists' need of them. But with her advanced degrees in microbiology and biochemistry, she knew how to cultivate different types of microorganisms and cells in a lab.

Falconer saw the potential to use her scientific skills to reduce or remove animals from the food supply chain. But she also felt that in her own diet, there were many options to choose from both at restaurants and grocery stores. She's mostly a lentils and tofu person, she says, but is a big fan of Impossible Foods' plant-based substitutes for meat products.

"We can always use more," the CEO said, "and I am happy when there are even more alternatives. But there was absolutely nothing for my cats and virtually nothing for dogs."

Falconer initially wondered if pet food was a big enough market to tackle, and how much of an environmental difference it could make to shift meat production for pet food toward cultured ingredients.

Livestock agriculture was responsible for the equivalent of 260.54 million metric tons of carbon dioxide emissions in the U.S. in 2019, according to the most recent available EPA data.

The amount of pet food consumed pales in comparison with human meat consumption, Falconer discovered. But pet food is produced from leftovers in the global meat supply chain, including tons of meat that couldn't be sold for human consumption, and meat from fallen animals that die in transit, or from suffocation in farming facilities or from disease.

"All that meat gets shunted into pet food," Falconer said, "And it allows animal agriculture to stay afloat without making any big changes.

Today, the pet food market is growing, buoyed by increased adoption of dogs and cats by millennials, and greater awareness of health benefits through nutrition for pets. According to Grand View Research, the pet food market should grow to around $90.4 billion by 2025.

If Because Animals has the impact Falconer is looking for, a significant portion of that will shift to clean meat and other sustainable products soon. The company's next challenge will be scaling up to a larger commercial kitchen, while continuing to develop new, clean meat pet foods.

Correction: Livestock agriculture was responsible for the equivalent of 260.54 million metric tons of carbon dioxide emissions in the U.S. in 2019.