Perfect Day raises $140m to scale up animal-free dairy platform, prepares for 2020 launches in multiple categories

By Elaine Watson

- Last updated on GMT

 Perfect Day cofounders Ryan Pandya (left) and Perumal Gandhi (right). Picture: Courtesy of Perfect Day
Perfect Day cofounders Ryan Pandya (left) and Perumal Gandhi (right). Picture: Courtesy of Perfect Day

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Perfect Day, a startup producing milk proteins via microbial fermentation (minus the cows), has raised $140m in a Series C round led by Temasek with substantial involvement from past investors including Horizons Ventures, bringing its cumulative funding to over $200m.

The round will help the Berkeley-based firm expand production capacity, go deeper with partner opportunities, boost the team in sales, marketing and communications to support partner launches, and extend its product portfolio, said co-founder Ryan Pandya, who recently revealed plans​ to expand Perfect Day’s fermentation platform to produce fats as well as proteins.

“In 2019, we showed that our manufacturing process works robustly at full commercial scale and that we can produce metric tons of protein. We were able to demonstrate with our ice cream launch​[a limited edition teaser to demonstrate one possible application] —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.  

“Our focus in 2020 will be manufacturing and commercializing the protein in multiple continents, through multiple partnerships spanning different dairy product categories. We’re already at the point where we can make commercial quantities relevant to certain categories, so with ice cream we’re able to go big already, but with this round with Temasek, we can bring our ingredients to the world in a big way​,” Pandya told FoodNavigator-USA.

“If you want to sell bulk protein powder for sports nutrition products, for example, the volumes needed are much higher.”

Scaling the manufacturing  

He added: “Part of the funding is allocated towards working with contract manufacturers to continue to ensure we’re making enough protein, but the cost structure will never be as good as it would be with a more dedicated plant, so obviously we are interested in getting bigger plants off the ground, hence our relationship with ADM ​[which signed a joint development agreement withPerfect Day in late 2018]​.

“ADM is one partner, but not the only one we’ll be working with to scale up.”

“We’re leveraging two different industry standards, so we’re able to use the fermentation ​[infrastructure] that’s already built up all over the world to make a wide variety of food ingredients, but on the other hand there’s also infrastructure already set up by the whey protein industry for taking protein out of​ [dairy] milk, getting it to a high purity level and drying it."


Real dairy ingredients, made without cows...

Perfect Day​​​​’s dairy proteins (and in future fats​) are cleaner, greener and kinder than those produced via industrialized animal farming, claim founders Ryan Pandya and Perumal Gandhi, but they also represent a new supply of animal-free ingredients that deliver the unique functionality and nutrition of dairy so that formulators do not have to compromise.

Perfect Day uses microbes (which it describes as ‘flora’ – which could cover fungi, yeast, or bacteria) and adds DNA sequences (which can be 3D printed using synthetic biology techniques) which effectively instruct the microbes to produce the proteins and fats found in milk. (The first products from its platform use a fungi found in soil called Trichoderma.) 

The microbes feed on sugars and other nutrients in big fermentation tanks and secrete the protein into the broth from which it can be harvested.

The company, which was founded in 2014, will employ close to 75 people as it enters 2020, said Pandya, and will expand to “easily over 100 next year.”

‘We’re pricing ourselves closer to a premium plant protein today’

As for finished products that utilize Perfect Day’s ingredients, the company plans to announce its first commercial partnerships early in 2020, said Pandya.

“We’ll be accelerating our different collaborations with food companies big and small across different food categories, geographies, and different channels, but we’re not quite ready to share them yet. We’re talking to companies in different channels, so there’s foodservice in the mix as well as retail consumer brands.”

Asked about pricing, he said: “Our protein is already at the price point where you can formulate ice cream and sell it profitably at comparable prices to what’s already on the shelf today, but it’s not being treated like a commodity, we’re pricing ourselves closer to a premium plant protein today.”

'​A third category somewhere between plant-based and traditional dairy'

Early adopters working with Perfect Day’s ingredients include Fortune 50 companies to entrepreneurs starting from scratch, he said. “The peak of the bell curve is probably that medium sized brand that maybe has a regional presence.

“Typically companies are looking at this as a third category somewhere between plant-based and traditional dairy, where we offer the nutrition and functionality and flavor experience of dairy and the heart and soul of a plant-based protein.”

Sampling Perfect Day ice cream in Los Angeles
Perfect Day recently unveiled a limited edition ice cream made with its animal-free whey protein

Messaging and non-animal dairy

Asked how CPG partners are thinking about marketing products containing the animal-free dairy ingredients [Perfect Day described its whey as ‘non animal whey protein’ ​on the ingredients list of its limited edition ice cream], he said:

Some customers care more about the fact that it’s lactose free than the fact that it’s vegan, or more sustainable. We talk about ‘animal free dairy’ and ‘enabled by flora,’ but every company we talk to has different priorities.”

Many partners are also keen on using the ‘intel inside’ approach with Perfect Day branding on their packaging, he said: “They want their customers to know that this is new and not just another me-too product.”

How do you talk to consumers about microscopic protein factories?

Asked how his thinking about consumer messaging has evolved since the company was founded five years ago, he said: “I think the ‘why’ behind this makes perfect sense to people, much more than it did in 2014 ​[when the company was founded].

But the ‘how’ is probably still a bit confusing for consumers as food companies haven’t talked about fermentation much before even though it’s ubiquitous, so I think there’s a huge opportunity here.”

Ryan Pandya: “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.”

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