Venture Capital: Animal-Free Dairy Proteins Maker Perfect Day Expands Series C to $300M

July 9, 2020 | News, Venture Capital

Perfect Day ramps up production efficiencies to levels projected for 2022.

Perfect Day, a food-tech startup that makes dairy proteins (no cows needed), announced the expansion of its Series C Round up to $300 million. The Series C had previously closed in December 2019 at $140 million and was led by Temasek Holdings and Horizons Ventures. The Canada Pension Plan Investment Board’s (CPPIB) investment group Thematic Investing led this new tranche of $50 million. Aggregate funding at the Berkeley, California startup is now over $360 million. (Food

Perfect Day duplicates dairy proteins minus the cows

The food-tech startup produces milk proteins through a process of fermentation using ‘flora’ – microbes such as fungi, yeast, or bacteria. It adds DNA sequences produced using synthetic biology. These genes instruct the microbes to produce the identical proteins and fats found in milk.

The ‘dairy flora’ use fermentation in large tanks to convert plant sugar into whey and casein – the proteins found in milk. These fermentation processes are the same as those used for over five decades in the production of food ingredients such as vitamins, probiotics, and natural flavors.

Perfect Day terms these as “flora-made dairy protein.” Because their production is animal-free, they are vegan, lactose-free, and hormone-free. Again, for the same reason, the process consumes less energy and water and needs no factory farms. Greenhouse emissions too are much lower.

Products using Perfect Day milk protein deliver nutrition, taste, and texture the same as cow’s milk. This is a huge advantage over proteins from, say, soy, nuts, or other plants.

Smitten ice cream is already using Perfect Day proteins. Soon the proteins could find application in cream cheese.

The U.S. Food and Drug Administration has held that Perfect Day’s product is “Generally Recognized as Safe.”

Efficiency leap

Perfect Day has achieved substantial savings in the cost to produce these proteins by increasing the efficiency of its production process.

Its production costs have already hit 2022 targets, resulting in the company becoming margin-positive.

COVID-19 and milk dumping

Dairy farmers in the U.S. had to dump huge quantities of milk following the lockdown restrictions that led to the closure of primary consumers such as schools, restaurants, and malls.

However, Perfect Day can produce the milk protein on tap from many locations, matching demand with supply. This ensures the stability of prices for milk consumers and the reduction of food waste.

“The coronavirus pandemic has shown just how fragile our food system is,” said Perfect Day co-founder and chief executive officer Ryan Pandya. “We’re committed to building real change that prioritizes diversity, agility, and resilience.”

A shift in consumer behavior

“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 investment approach,” said Leon Pedersen, managing director, head of Thematic Investing, CPPIB.

Related Story:  Meat Substitutes Make Their Mark Amidst the COVID Crisis

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