December 12, 2019

By Lynda Kiernan

Temasek has returned to once again lead an attention-grabbing $140 million Series C for food tech startup Perfect Day, a producer of animal-free, lab-created dairy proteins. Horizon Ventures also participated in the round, along with “substantial involvement from past investors”, according to the company. 

This is the company’s third funding round, following a $24.7 million raise in March of last year (also led by Temasek), bringing total capital raised to-date to $201.5 million.

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, and ice creams that taste and are nutritionally the same as their animal-derived versions. 

“In 2019, we showed that our manufacturing process works robustly at commercial scale,” said Ryan Pandya, CEO and co-founder of Perfect Day. “We were able to demonstrate with our ice cream launch—which sold out in a single day—that flora-based protein delivers on the dairy experience, and that people are excited about what we’re doing.”

This past summer the company produced a test-batch of ice cream made with its proteins that sold out within hours, however, there are no plans for the company to produce its own lines of foods. Instead it intends 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?’” Pandya told Fast Company. “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.”

Having conquered lab-created milk protein production, Perfect Day recently announced it was expanding its platform to include animal-free milk fats, as well as other novel fats that could replace palm oil or coconut oil in food production.

“From day one the goal was to find a way to make milk without cows, and that’s about more than just protein,” Pandya told FoodNavigator-USA in November. “We’ve started building out a team to focus on fats and the goal is to be on the market in 2021 in a big way.”

With plans to announce its first commercial partnerships in early 2020, Perfect Day intends to use the capital from this funding round to accelerate its business growth, expand production capacity, explore deeper partnership opportunities, and to extend its portfolio of offerings.

“Our focus in 2020 will be manufacturing and commercializing the protein in multiple continents, through multiple partnerships spanning different dairy product categories,” said Pandya.

And although Perfect Day may be the first to land its products on market shelves, it does have competition.

Boston-based Gingko Bioworks spinout Motif FoodWorks secured a $90 million Series A this August, and is working to develop next-generation alternative proteins and ingredients for global companies.  That same month, Clara Foods raised an undisclosed Series B to back its production of animal-free protein ingredients. 

Fermentation is also being applied to produce non-protein ingredients. Just last month, a joint venture between Cargill and Royal DSM called Avansya announced that it was launching operations at the first facility in the U.S. to produce high-volume, zero-calorie stevia using the process.

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.