Perfect Day expands Series C to $300m; significantly boosts efficiency of animal-free dairy protein production

By Elaine Watson contact

- Last updated on GMT

Perfect Day founders Ryan Pandya (left) and Perumal Gandhi (right). Picture credit: Perfect Day
Perfect Day founders Ryan Pandya (left) and Perumal Gandhi (right). Picture credit: Perfect Day

Related tags: Perfect Day, vegan, Microbial fermentation

Perfect Day, a startup producing milk proteins via microbial fermentation (minus the cows), has expanded its Series C round from a previously-announced $140m, up to $300m through a new tranche led by CPP Investments and bolstered by long-time supporters Temasek and Horizons Ventures.

The cash injection - bringing its cumulative funding to over $360m - was announced as Berkeley, Calif.-based Perfect Day revealed a series of incremental improvements in recent months enabling it to increase the efficiency of its production process, substantially reducing costs two years ahead of expectations.  

We never doubted we’d reach this point, we just didn’t expect to get here so quickly​,” said Ryan Pandya, co-founder and CEO of Perfect Day, which will use the extra funding to expand production capacity, explore partner opportunities, expand its team, and extend its product portfolio.

"After Perfect Day announced the closing of its initial Series C round last December, it was met with additional excitement and interest due to unexpected advances in protein production capabilities," ​he told FoodNavigator-USA.

"The team was fortunate enough to meet the Canadian Pension Plan Investment Board (CPP) and their newly formed Thematic Investing (TI) group, who ultimately led this Series C2 tranche."

'Perfect Day’s production costs have already hit the targets it set to reach in 2022'

He added: "From a production standpoint, Perfect Day has gone from protein production at a gram scale to now producing truckloads of its flora-made animal-free dairy protein. Perfect Day’s production costs have already hit the targets it set to reach in 2022. These gains have made the company margin positive.

"The new investment helps ensure there is a team and resources in place to continue on the trajectory of growth - including projecting more capacity with protein production and working with existing and prospective partners to bring our protein to the mainstream."

Protein to order...

While dairy supply, demand, and pricing can be extremely volatile (as evidenced by recent fluctuations prompted by COVID-19), Perfect Day can produce dairy proteins to order, from multiple locations, ensuring security of supply and more stable pricing, said Pandya.

New commercial partnerships will be announced in the coming months, said the company, which recently teamed up with San Francisco-based Smitten Ice Cream​ to launch the first commercial product featuring its ‘non-animal’ whey protein.

"Perfect Day will have exciting news to share very soon and will be announcing a large partner in the coming months. Perfect Day will also be unveiling new applications with its animal-free dairy protein in a new product category this year."

“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 investing approach.”

Leon Pedersen, Managing Director, Head of Thematic Investing, CPP Investments

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 its founders, 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.

'​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, Pandya told us later year: “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.”

Messaging and non-animal dairy​

Asked how CPG partners are thinking about marketing products containing the animal-free dairy ingredients [Smitten Ice Cream uses the term ‘non animal whey protein isolate’ ​​on the ingredients list], 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 (Smitten Ice Cream features the ‘made with Perfect Day’ logo), 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 in recent years, 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.”​​

perfect-day-logo

Perfect Day recently secured a coveted 'no questions/objections' letter from the FDA in response to its Generally Recognized as Safe (GRAS) determination for 'non-animal' whey protein.

In the letter​​​ - which you can read here - the FDA explains that, "Based on the information that Perfect Day provided, as well as other information available to FDA, we have no questions at this time regarding Perfect Day’s conclusion​​​ that β-lactoglobulin is GRAS under its intended conditions of use."​​

The GRAS determination covers β-lactoglobulin (the major whey protein in cow's milk) produced via the fermentation of a genetically engineered strain of the filamentous fungus Trichoderma reesei​​.  

Read more HERE.

Smitten Perfect Day Fresh Strawberry N'Ice Cream
N'ice cream... minus the cows? San Francisco-based Smitten Ice Cream is the first food company to use ‘non-animal’ whey protein from Perfect Day in a commercial product, giving the market a glimpse of how foods featuring these ingredients might be marketed.

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