Someone’s moo-ving up in the world.
PerfectDay, a food startup developing technology to make animal-free milk, just raised $24.7 million in series A funding. This brings their total funding to $26.8 million. The round was led by Temasek, a Singapore state-owned investment company, with participation from Horizon Ventures, Iconiq Capital, and Lion Ventures, among others. Berkeley-based Perfect Day is on a roll: earlier this month, they received a patent to use their animal-free dairy technology in food applications.
Though it’s been attracting a good bit of attention as of late, PerfectDay has been around for a while. The company launched in 2014 under the name Muufri, but rebranded to PerfectDay in 2016. (Fun fact: The new name comes from a study which found that cows produced more milk when listening to soothing music like the eponymous Lou Reed tune.) They plan to use their new funding to expand their staff (currently 32 people strong) and accelerate commercial marketing of their product with dairy & food companies.
Unlike other milk alternatives, which are made of plants like soy, almond, or peas, PerfectDay uses fermentation to create the exact same elements found in cow’s milk. Scientists give genetically altered yeast a “blueprint” so that, when fed with certain nutrients, they produce two key proteins in milk: casein and whey.
The resulting proteins can be used to make lactose-free, gluten-free, soy-free, and nut-free milk. They can also be used to make a myriad of dairy products such as cheese, yogurt, and ice cream. While there are plenty of vegan dairy products already on shelves, no cashew cheese or coconut-based gelato will ever taste exactly the same as the dairy original. Products made with PerfectDay’s milk proteins, however, taste just like the “real thing”—after all, the proteins are genetically identical.
When they first launched, PerfectDay was trying to do two things: create a supply chain for animal-free dairy components and put a single brand of cow-free milk on supermarket shelves. In November of 2017 co-founder Perumal Gandhi announced on LinkedIn that they would shift course to focus on a B2B model, creating a supply chain for animal-free dairy products and partnering with food and drink companies to bring their technology to market.
And this, in my opinion, is where things start to get really interesting. “Nobody else was working on the supply chain side,” Gandhi told The Spoon. “We started this company to have the largest possible impact on the effects of animal agriculture on our planet, and now we can do that by working with grocery stores across multiple channels. We can be national from Day One.”
By joining forces with existing food manufacturers, especially large dairy companies, PerfectDay hopes to alter the system from the inside. With the recent trends for vegan products and milk alternatives, this disruption could prove to be pretty profitable—both for PerfectDay and the planet. And given their investors’ connections with large-scale food and beverage brands, PerfectDay will likely be able to commercialize their “milk” protein technology relatively quickly.
Gandhi said that, while they’re also partnering with smaller, family-owned businesses, they need to team up with big companies to truly change the food industry. He hopes that their lab-grown casein and whey will eventually be like pea protein is today: an ingredient that used to be rare, but is now fairly commonplace in animal-free products.
The path ahead is not without obstacles. PerfectDay will have to convince consumers that cow-free dairy products can taste and function indistinguishably from traditional dairy, and can be produced at a competitive price. They will also have to figure out what their new products will be called.
In fact, the PerfectDay team is currently in talks with the FDA to determine what sort of labeling use for their cow-free dairy. Unlike lab-grown meat, which is fighting Big Beef to be able to use “meat” on their labels, Gandhi said that they want to call their product something other than “milk.” “We’re trying to come up with a nomenclature to show the consumer that this is produced in a new way, without animals,” he said. “If we call it milk then we’re not being transparent.” This makes sense, especially if their products are more expensive; people want to know why they’re paying a premium.
Challenges aside, their technology as a service model has the potential to be hugely successful. By choosing to use a B2B model, PerfectDay will no doubt be able to scale more quickly than with a B2C model. It will be interesting to follow their progress and see how they compare in, say, 5 years with other food tech startups who chose to market directly to consumers.
If the current trend towards animal protein alternatives continues, PerfectDay will no doubt take home some serious (cow-free) cheddar.