To boldly go… NotCo raises $85m to expand plant-based empire, gears up for US market entry

By Elaine Watson

- Last updated on GMT

L-R CMO Flavia Buchmann, COO Jose Menendez, CEO Matias Muchnick, and CTO Karim Pichara (picture courtesy of NotCo)
L-R CMO Flavia Buchmann, COO Jose Menendez, CEO Matias Muchnick, and CTO Karim Pichara (picture courtesy of NotCo)

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Santiago-based food tech company NotCo has closed an $85m Series C funding round co-led by Future Positive and L Catterton,* and is gearing up for a move into the US market in late 2020 or early 2021.

Founded in 2017 with a mission to reverse engineer popular animal-based foods (milk, mayo, ice cream, burgers) and rebuild them with plant-based ingredients, NotCo​ ​sells products in major retailers and QSR chains in Chile, Argentina, and Brazil, and recently teamed up with Burger King to launch the plant-based RebelWhopper in Chile.

The firm – which is planning moves into Peru, Colombia and Mexico following the latest capital injection – is gearing up for a late 2020/early 2021 launch into the US market, with two of the company’s three co-founders - Matias Muchnick (CEO), and Karim Pichara (CTO) - moving to the US to support the launch.

NotCo, which already has an office in San Francisco where part of its machine learning team is based, has also recruited senior executives from Coca-Cola and Danone to support its expansion plans, which include moves into multiple animal food categories, with a particular emphasis on dairy alternatives including cheese and yogurt, Muchnick told FoodNavigator-USA.

“We actually weren’t going into burgers until Burger King came knocking on our door and said Hey guys, can you create a plant-based burger?” Matias Muchnick, co-founder and CEO, NotCo

The money will be spent on “consolidating the Latin American business, executing a very aggressive US launch,” ​and further building out the technology platform, which utilizes AI and machine learning to inform recipe generation and processing decisions.

NotCo is still finalizing its go-to-market strategy in the US, he added: “We’re engaged in many conversations with many QSRs and retailers and some want some products and some want others, so we’re still trying to figure out what makes sense, what’s the best product/market fit.”

Proven success in Latin America, lively branding, mission and purpose, technology

But can NotCo make a splash in the US market for plant-based foods, which has heated up significantly over the past couple of years?

Aside from its proven success in Latin America, its lively branding (‘NotMilk,’ ‘NotMayo’ etc) and its focus on sustainability and animal welfare (Muchnick thinks more mission-driven brands will resonate more strongly with consumers in the space… “What can the big meat companies say? I’m in this because I don’t want to lose market share?​”), its technology platform also sets it apart, claimed Muchnick, who previously founded plant-based mayo brand Eggless.

Pineapple and cabbage… 

The pea-protein-based NotBurger, for example, contains spinach and cacao; while NotMilk features pineapple and cabbage, two ingredients you wouldn’t expect to see in a plant-based milk, which NotCo’s tech platform identified as a combination that would generate lactones, aroma compounds found in dairy products, which "make our brains understand that this is milk," ​said Muchnick.

While trial and error in the kitchen could have determined that this combination of fruits and veggies might work well, a computer algorithm determined this in seconds, he observed.  

But the ingredients – processed in a specific manner – also deliver target functional properties when it comes to foaming, emulsification and other technical properties that make NotMilk (which contains 5g protein per 240ml) deliver from a functional and sensory perspective, he claimed.

“We’re not just using our technology as a recipe generator.”

Take cheese and yogurt, he said. "There's a very big gap between animal-based and plant based products in these categories," ​in part because dairy proteins such as casein have very specific functionality that it can be hard for plant-based proteins to replicate, he said.

"So how do we create a blend of proteins to create the folding properties of casein? How are we able to predict which microbes will generate the things that we want in a specific base?"

NotBurger on a par with the Impossible Burger in consumer taste tests

When it comes to burgers, which were not initially in NotCo’s R&D pipeline, but were developed following a request from Burger King in Chile, he added: “I think the best ​[plant-based burger] out there right now is the Impossible Burger, then the Beyond Burger, and then all the rest of them. And our product is on taste parity with the Impossible Burger in consumer taste tests.”

While NotCo is using animal-based products as a benchmark – because they form such a core part of so many people’s diets (the addressable market is huge and you don’t have to educate people about how and when to consume them) – that doesn’t mean that it can’t make improvements, said Muchnick.

Our first target is to create mass market products that we already know, but the next question is can we make them better ​[nutritionally, functionally], and I think we can.”

*NotCo is also backed by Kaszek Ventures, The Craftory, Bezos Expedition, General Catalyst, Endeavor Catalyst, Indie Bio, Humbolt Capital and Maya Capital, all of which have followed on in this round.

not milk

NotMilkingredients​: Water, green pea protein, coconut butter, chicory fiber, pineapple, cabbage, sugar, natural flavoring, sunflower oil, dipotassium phosphate, acacia fiber, gellan gum, salt, calcium phosphate, EDTA, vitamin D2, vitamin B12. (250ml contains 5g protein and 72 calories.)

According to NotCo CEO Matias Muchnick, “It works better with coffee than anything else out there.”

“We are inspired by the vision and global ambition for the NotCo brand, and impressed by the quality of NotCo’s products, which speak for themselves. We see vast potential for the company’s technology, which is creating new product categories faster and more accurately than anyone else in the industry.”

Fred Blackford, Future Positive

NotCo has launched NotMilk, NotBurger, NotIceCream and NotMayo in Brazil, Argentina and Chile (pictures courtesy of NotCo)

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