- Animal-free dairy producer Perfect Day more than doubled its Series C funding with $160 million of new investments announced Wednesday morning. The funding round, which initially closed at $140 million in December, is now worth $300 million. This brings the company's total funding to $361.5 million.
- The lead investor in the new funding tranche is the Canada Pension Plan Investment Board, which has a current portfolio of $409.6 billion. The board, which manages retirement money for Canadians, put $50 million toward Perfect Day as the first investment for its new Climate Change Opportunities segment. Repeat investors Temasek and Horizons Ventures also participated in the new investment.
- In the last several months, Perfect Day, which creates dairy through fermentation, has made many steps forward in its product development. It had its first launch with another manufacturer, selling four flavors of N'Ice Cream. It's doubled manufacturing capacity and substantially reduced costs, the company said in a release. And its whey protein received generally recognized as safe status from the FDA.
As many investments, new products and R&D have been slowed down in recent months, Perfect Day is continuing to grow at breakneck speed. The fact that the new investment, which makes up about 44% of the company's total lifetime funding, comes in the midst of the coronavirus pandemic shows that Perfect Day's product offering remains attractive to investors. It offers a sustainable dairy ingredient that's ready to go to market, both under its own brand name and through partnerships with other manufacturers.
“We never doubted we’d reach this point, we just didn’t expect to get here so quickly,” Ryan Pandya, co-founder and CEO of Perfect Day, said in a statement emailed to Food Dive. “And, thanks to our world-class team and investors, we’re not planning to take our foot off the pedal anytime soon. The coronavirus pandemic has shown just how fragile our food system is.”
Pandya, a scientist who previously made antibodies for the medical field, teamed up with Perumal Gandhi, who has a degree in biotechnology, in 2014. They worked to understand the science and chemistry behind making dairy proteins without cows. In 2018, the startup entered into a partnership with Archer Daniels Midland to scale and commercialize their dairy proteins. A year later, Perfect Day made its first product: Dairy-free ice cream under its own brand.
The company has not said what it would launch next, though it teased possibilities with a collection of images sent to the media in 2019. These options included milk, shredded and natural mozzarella cheese, cream cheese and spreadable cheddar cheese. But Pandya told Food Dive in January the company's more immediate focus was partnering with food companies to use its protein as an ingredient rather than market its own products under the Perfect Day label.
"There would be no ice cream brand that isn't aware of us pretty much at this point," Pandya said. "Every major multinational (company) is talking to us."
And while many are taking notice of Perfect Day's capabilities as an ingredient, this latest funding round also shows that its sustainability bona fides also are being noticed. Sustainability is a core part of Perfect Day's philosophy, but it isn't one that the company broadcasts right now. The World Wildlife Fund notes dairy cows create large amounts of greenhouse gases, huge amounts of water and land are used to feed them, and poorly managed farms can lead to large scale land and water pollution.
Consumer concern about sustainability has been growing. A survey conducted by management and consulting firm Kearney this spring found 11% of consumers have shifted their purchases based on environmental claims within the last year, and nearly half became more concerned about the environment during the pandemic. In April, 83% of consumers said they take the environment into consideration when making a purchase.
The Canada Pension Plan's investment in Perfect Day gives a solid endorsement of the company's sustainability potential, especially since it was chosen as the first investment in the fund's climate change portfolio. This could pay dividends for Perfect Day that go well beyond the new $160 million in funds announced today.
With consumers valuing sustainability, food manufacturers may be more interested in making products with Perfect Day. And consumers will be more interested in seeking out these products, both under Perfect Day's own brand or from other manufacturers who use Perfect Day's protein. Increasing investor interest in everything Perfect Day is — vegan, cutting-edge food science and sustainable — continues to make the case for Perfect Day to go public and expand the reach of investors participating in its growth.