July 8, 2020

By Lynda Kiernan, Global AgInvesting Media

Perfect Day, a producer of animal-free, lab-created dairy proteins, announced it has raised a new $160 million tranche of funding led by Canada Pension Plan Investment Board’s (CPP Investments’) Thematic Investing group. 

This funding expands the company’s original $140 million Series C announced in December 2019 to $300 million, driven by additional investor interest upon breakthroughs by the company on its proprietary flora-made dairy proteins. 

Founded in 2014, Perfect Day has a mission to reimagine the dairy supply chain and to evolve the food system for a more sustainable future by producing animal-free dairy proteins – whey and casein – in a lab that are nutritionally identical to proteins derived from cow’s milk. This is achieved through a simple process – first, “milk’s essential genes” are isolated and then added to a natural dairy flora that uses fermentation to convert plant sugar into milk proteins.

The resulting animal-free, soy-free, lactose-free, and vegan whey and casein are then used to make free-versions of cheeses, yogurts, ice creams and other products that taste and are nutritionally the same as their animal-derived versions.

Last summer the company produced a test-batch of ice cream made with its proteins that sold out within hours, however, there were no plans announced for the company to produce its own lines of foods. Instead, intentions are to rapidly achieve scale through partnerships.

“Every day, every decision, the thought process is, ‘How do we make this scale big enough that everyone in the world can have access to it?’” Ryan Pandya, co-founder and CEO, Perfect Day, told Fast Company last year. “I think it’s a very different kind of thought process than saying, ‘How do I build a $10 billion brand?’ That’s not really the goal here. The idea is to make this as impactful and achieve our mission as quickly as possible. And the way to do that is by partnering with brands that are big and small and have a much wider reach than we could simply as our own product.”

In recent months the company has doubled its production capacity of its hallmark protein, while also significantly reducing cost of production years ahead of expectations, and successfully completed an FDA review of its Generally Recognized As Safe (GRAS) status.

Perfect Day stated that the achievement of these benchmarks, together with a massive Series C led by a $50 million commitment from CPP Investments’ Thematic Investing group and support from long-term partners Temasek and Horizon Ventures, marks the beginning of a new chapter for the company. 

“We never doubted we’d reach this point, we just didn’t expect to get here so quickly,” said Pandya. “And, thanks to our world-class team and investors, we’re not planning to take our foot off the pedal anytime soon.”

The unprecedented reality of the COVID-19 pandemic has laid bare serious issues inherent in the dairy industry including long production cycles, centralized manufacturing, and limited processing facilities that have led to a supply glut. These same conditions have also shed light on the unique advantage held by Perfect Day. 

“The coronavirus pandemic has shown just how fragile our food system is,” said Pandya. “We’re committed to building real change that prioritizes diversity, agility, and resilience.”

By producing dairy proteins by applying the process of fermentation to microflora, instead of through animal-based agricultural systems, Perfect Day and its partners can quickly react to market conditions by adjusting production levels based on supply and demand dynamics, and can also easily direct a stable supply of protein where it is needed, Furthermore, Perfect Day is planning to establish a turnkey network of local animal-free dairy protein producers and processors to eliminate supply chain bottlenecks. 

“We’re grateful for the continued support of our investors from all over the world,” said Perumal Gandhi, co-founder, Perfect Day. “But, of course, our mission is about much more than money. We continue to believe the next generation of protein will be driven by production speed, price, and taste, and we’ll have several exciting updates to share in the months ahead as our commercial partners start to build momentum.”

Notably, it was this ability of Perfect Day’s business model to fundamentally shift industry practices that led to this investment being the first made through CPP Investments’ Thematic Investing group’s new Climate Change Opportunity strategy.

“This marks the first investment into Thematic Investing’s new Climate Change Opportunities strategy, which will focus on innovative companies that are well positioned to respond to the challenges posed by climate change,” said Leon Pedersen, managing director, head of Thematic Investing, CPP Investments.

“Sustainable technologies like Perfect Day are poised to capture structural shifts in industrial practices, physical resources and consumer preferences for environmentally conscious options, which are well-suited to our long-term investing approach. We look forward to building our partnership with the company and its management team.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.