Change Foods, the animal-free dairy startup based between the U.S. and Australia, has just announced the closing of its US$2.1 million seed funding round. The capital will be used to fuel its expansion in the San Francisco Bay Area and advance its R&D, with the view to launch real, cow-free cheese made using precision fermentation technology as its first product in 2023.
Change Foods has completed its oversubscribed seed funding round with US$2.1 million, bringing its total capital raised to US$3.1 million, the company announced on Wednesday (June 16). The round saw participation from Silicon Valley early stage accelerator and innovation platform Plug and Play Ventures, alternative protein investors Clear Current Capital and Better Bite Ventures, Canada’s largest independent investment dealer Canaccord Genuity and Italian fund Gerber-Rauth.
Notably, renowned American computer scientist Jeff Dean, the current head of Google’s AI division, also backed Change Foods in the latest round. Change Foods previously bagged US$875,000 in a pre-seed round in late 2020.
The U.S.-Aussie startup, which currently stands as the only precision fermentation dairy company with a base of operations within Asia-Pacific, says that the proceeds will help fuel its ongoing expansion into the Bay Area and ramp up R&D ahead of its planned animal-free cheese product launch in 2023, through a B2C strategy.
“We are excited to be at the heart of a food tech community in the Bay Area, as we set up our facilities and build out our R&D team,” said David Bucca, founder and CEO of Change Foods, who recently relocated to the area with the startup’s VP Sacha Baker, meeting the company’s COO Luis Espinoza and CMO Irina Gerry for the first time.
Plant-based cheese alternatives have a taste and performance gap to animal-based dairy cheese, especially when it comes to stretch and melt.David Bucca, Founder & CEO, Change Foods
Change Foods says that it decided to focus on cheese as its first product as it is often cited as one of the most difficult-to-quit animal-based products, and because existing plant-based products on the market do not necessarily provide the functionality, taste and texture that dairy cheese-lovers crave.
“People love cheese,” said Gerry. “Cheese is usually the last product holding consumers back from adopting a fully plant-based lifestyle, yet, cheese is second only to red meat (beef and lamb) in its carbon footprint.”
“We believe consumers are hungry for more sustainable and animal-free options, but they are not willing to compromise on food experience, especially when it comes to cheese. This insight leads us to believe that by creating animal-free cheese that tastes, melts and stretches just like traditional animal-based dairy cheese, we can unlock significant market growth,” Gerry continued, in conversation with Green Queen Media.
“Plant-based cheese alternatives have a taste and performance gap to animal-based dairy cheese, especially when it comes to stretch and melt,” added Bucca.
“This is why we set out to make cheese without compromise. We harness the power of microbes instead of animals to create dairy foods that are indistinguishable from their animal-based predecessors on taste and texture, while delivering products that are more sustainable and better for you.”
Choosing a B2C strategy for its 2023 launch of its animal-free cheese is a part of the startup’s plan to “building a brand that connects directly to consumers through story-telling and brand experience,” Gerry told Green Queen Media.
Nutrition-wise, Change Foods’ animal-free cheeses are said to contain “all the good stuff” such as protein and calcium and “none of the nasties” that conventional dairy products contain, like cholesterol, hormones and antibiotics.
As very first investors in Change Foods, we have had the opportunity to watch all the R&D progress the company made since they launched.Michal Klar & Simon Newstead, Co-Founders, Better Bite Ventures
The technology that Change Foods uses to recreate real dairy proteins to make cheese is precision fermentation, the same tech that animal-free pioneer Perfect Day uses to develop its whey proteins for real dairy ice creams without the cow and with a far smaller environmental footprint.
Junior Te’o, Change Foods co-founder and CTO, told Green Queen Media that while in the same category, there still remains several differences in the way Change Foods produces its animal-free dairy proteins to stand out from the crowd. “There are several differences in our technology and specific ingredients we are producing beyond proteins, such as lipids and aromatic compounds, our proprietary cheese production process, as well as our go-to-market strategy and the executive team expertise and composition.”
Other players within the precision fermentation dairy space include Israeli food techs Remilk and Imagindairy, British firm Better Dairy, and Ghent-based Those Vegan Cowboys, as well as Berlin-headquartered Formo and San Francisco’s New Culture – the latter two, like Change Foods, have also made animal-free cheese its priority.
Commenting on the decision to back Change Foods, Better Bite Ventures co-founders Michal Klar and Simon Newstead, shared: “As very first investors in Change Foods, we have had the opportunity to watch all the R&D progress the company made since they launched. We are also impressed by the calibre of people David has been able to attract to the team.”
“Change Foods is leveraging precision fermentation to produce real, animal-free cheese in a novel manner, setting them apart from others in the space,” said Clear Current Capital principal Steven Molino. “This differentiation, coupled with an impressive management team, leaves Change Foods uniquely positioned to reinvent the dairy landscape and further the transition to a more sustainable food system.”
Looking ahead, Change Foods says that given the rising investor interest in this new pillar of alternative proteins and its plans for rapid expansion in the next years, it’s already planning ahead for another fundraising round in 2021.
“We are fortunate to be in a position to attract wonderful investment partners, who believe in our mission and the potential of this technology to build a new future of dairy,” Gerry told Green Queen Media. “We’ve received a lot of inbound interest from impact investors, venture capital funds as well as food and dairy industry partners. While this round was oversubscribed, we have already begun conversations about our next funding round planned for later this year.”
All images courtesy of Change Foods.