Perfect Day welcomes US$160m investment top-up for flora-based dairy

09 Jul 2020 --- COVID-19 has highlighted the need for alternatives to traditional dairy, according to Perfect Day. The flora-based dairy start-up has seen its Series C investment round grow from US$140 million to US$300 million thanks to a new tranche. The company has doubled its ability to produce its real dairy protein – without the use of animals – in recent months, while substantially reducing costs several years ahead of expectations.

“Even amid challenges presented by COVID-19, Perfect Day has continued to work behind the scenes to prove scalability and has doubled its production ability. While Perfect Day’s mission has remained consistent, COVID-19 has highlighted real challenges in how our global food system is equipped to handle crises. We hold a unique advantage with technology in place that can handle fast-paced production,” Ryan Pandya, CEO and Co-Founder of Perfect Day, tells FoodIngredientsFirst. 

The company details that the dairy industry experienced a supply glut in the face of COVID-19, driven by long production cycles, centralized manufacturing and limited processing facilities. 

However, Perfect Day is able to quickly increase or decrease production depending on demand and can allocate a stable protein supply to where it is needed most. This is due to its ability to produce dairy proteins through a process that bypasses animals. The company adds genes essential to producing milk protein to a type of fungus and lets it ferment plant sugar into whey and casein.

Pandya adds that the company adjusted plans to ensure the safety of its employees and the wider community amid COVID-19. This included working with partners to delay or adjust the timelines for partnership launches as needed. 

Nonetheless, the month of May saw Perfect Day bring its protein to US consumers thanks to a partnership with Bay Area-based Smitten Ice Cream. “We’ve learned an immense amount throughout the entire process of launching our first partnership with Smitten and now being commercially available for the first time. The biggest lesson is validation that consumers are hungry for animal-free products as the ice cream continues to sell out,” comments Pandya.

The co-founders say dairy products made with Perfect Day protein will be able to compete on cost with the commodity dairy industry.A new financial influx
After Perfect Day announced the closing of its initial US$140 million Series C round last December, it witnessed additional interest due to unexpected advances in protein production capabilities. Following this, the team met Canada Pension Plan Investment Board (CPP Investments) and its newly formed Thematic Investing group, which ultimately led this Series C2 tranche. Other investors include long-time supporters Temasek and Horizons Ventures. 

The new investment ensures there are a team and resources in place to continue the trajectory of growth, including projecting more capacity with protein production and working with existing and prospective partners to bring its protein to the mainstream. Perfect Day also plans to build a turnkey network of localized animal-free dairy protein producers and processors to avoid unnecessary supply chain bottlenecks.

The company states that its technology and high volumes mean that the protein and the dairy products made with it will be able to compete on cost with the commodity dairy industry. The protein also recently achieved a major regulatory milestone in the successful completion of the US Food and Drug Administration (FDA) review of its Generally Recognized As Safe (GRAS) status. Late last year, Perfect Day also expanded into developing milk lipids. 

“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,” says Leon Pedersen, Managing Director and Head of Thematic Investing at CPP Investments.

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

“Kinder, greener” proteinConsumers are increasingly concerned with animal welfare and sustainability.
With securing this new investment, Perfect Day’s mission and current plans remain consistent. The company says it is continuing to work with food brands and manufacturers to bring a range of dairy products – made in a “kinder, greener” way – to market. 

“We never doubted we’d reach this point, but we just didn’t expect to get here so quickly. Thanks to our world-class team and investors, we’re not planning to take our foot off the pedal anytime soon. We’re committed to building real change that prioritizes diversity, agility and resilience,” says Pandya. 

Perumal Gandhi, Co-Founder of Perfect Day, adds their mission is about more than money. “We continue to believe the next generation of protein will be driven by production speed, price and taste. We’ll have several exciting updates to share in the months ahead as our commercial partners start to build momentum.”

Earlier this week, Innova Market Insights revealed that a growing segment of consumers are concerned about the environmental and ethical issues impacting today’s world – with animal cruelty being a top concern. Notably, around 53 percent of US consumers are willing to pay more for products that support animal welfare.

By Katherine Durrell