Animal-Free Dairy Pioneer Perfect Day Raises Up to $90M & Brings On New Exec Team to Pursue Profitability
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Perfect Day, the pioneering animal-free dairy food tech which makes animal-free dairy from precision fermentation, says it has secured a pre-series E funding round of up to $90 million and announced that co-founders Ryan Pandya and Perumal Gandhi are stepping down from the company.
As first reported by AFN, Californian precision fermentation Perfect Day says it has just laid out its new profitability pathway plans and secured a new round of pre-series E financing worth up to $90 million. In addition, the company is bringing on a new executive team with current president TM Narayan named as interim CEO while a search for a permanent candidate is carried out.
The Urgent Company, founded in 2020 as a subsidiary of Perfect Day, has an umbrella of D2C brands under its belt, including the hit animal-free ice creams Brave Robot, cream cheese label Modern Kitchen, Very Dairy milk and protein powder brand California Performance Co. Perfect Day acquired cult ice cream company Coolhaus in 2021 and went on to launch animal-free dairy ranges under the brand in Singapore, Hong Kong and the US.
In August of last year after reported layoffs earlier in the summer, Perfect Day made headlines when it was reported that the company was exiting its consumer-facing business to refocus on core B2B operations, including the manufacture of animal-free whey protein, amidst fundraising efforts. Green Queen reported that Florida-based food tech company Superlatus had filed paperwork suggesting it was acquiring all of Perfect Day’s B2C operations, including the retail brands listed above, for $1.25 million. As of today, the sale itself has not been confirmed by the company.
The new round of funding was led by internal investors and AFN reports that it was done “in two parts, with the first part fully funded by existing investors; the company is finalizing additional capital from other investors now.”
Before the pre-Series E, Perfect Day previously raised over $750 million in funding.
New leadership team as founders exit
Having “de-risked its technology”, the firm said in a press release it will be zeroing in on its goal to scale up and “proving unit economics” for its pioneering whey protein made using precision fermentation technology.
Perfect Day’s founders Ryan Pandya (previously CEO) and Perumal Gandhi will step down from their operational and leadership roles as they “focus on future opportunities”. According to AFN, Pandya and Gandhi are also relinquishing their Board positions.
Taking over is a new executive team led by current president TM Narayan as interim CEO, alongside newly appointed co-chairs of the board Aftab Mathur of Temasek, and Patrick Zhang of Horizon Ventures. Both Temasek and Horizon Ventures have been major investors in the food tech since its early days.
“This has been a journey we could have only dreamed of when we first started this company in April of 2014. Because of the incredible people behind this business, we’ve de-risked world-changing technology, and we’ve brought it to life globally across over a dozen categories,” said Pandya. “Under TM’s interim leadership, Perfect Day is now in the right position for us to let the next chapter of leadership drive its path forward.”
A statement from the new interim CEO described the team as “laser-focused” on “securing a resilient future for the business and our planet.”
“It has been an incredible journey with Perfect Day to date,” Narayan added. “I’m excited to work even more closely with the company as it grows into its next chapter of impact,” added Patrick Zhang, Perfect Day co-chairman of the Board and Investor, Horizons Ventures.
Path to profitability
With their change in priorities to centre Perfect Day within B2B channels, the company says it is now firmly focused on bigger industry-shifting deals ahead.
In a press release, Perfect Day says 2024 will be the year in which they plan to announce a “major CPG partner launch” as well as revealing “new molecules which will bring the impact of precision fermentation to more products and markets”.
Zhang, part of the new executive team as co-chair of the board, says this year will bring the company towards “its next chapter of impact”.
Meanwhile, Perfect Day’s D2C arm, which will soon be acquired by Superlatus, will continue to ramp up retail offerings for consumers. At the moment, the many brands and their products made with animal-free dairy proteins are sold in more than 6,000 stores in the US nationwide, including in some of the country’s largest stores like Costco and Kroger.
Outside of the US, animal-free dairy proteins have appeared on the shelves in Asia, in the form of sustainable dairy ice cream brand Coolhaus, which became a hit in both Singapore and Hong Kong, as well as Very Dairy, Asia’s first-ever milk drink made with precision fermentation whey.
Precision fermentation’s biggest year yet?
These major moves by Perfect Day come in the wake of a major reckoning in the alternative protein space, with the precision fermentation pillar doubling down on its R&D and impact.
Having traditionally been the lesser-known sector in the alt-protein sphere, startups in this pillar have been slowly making more headlines throughout 2023. There are currently more than 64 companies using precision fermentation to create new sustainable and cruelty- and animal-free proteins. Manufacturing dairy proteins from precision fermentation requires far fewer global greenhouse gas emissions (GHG) than conventional dairy, and even more so if the energy used were renewable. Further, the technology involves a fraction of the land use compared to livestock agriculture.
In 2023, famed New York City Michelin-starred restaurant Eleven Madison Park joined hands with The EVERY Company to bring hen-free eggs to the table for an exclusive dinner, while Israel’s Imagindairy became the third precision fermentation dairy firm to earn GRAS status from the US FDA. Last year was also the year where European firms working within the space, such as Bon Vivant and Vivici reeled in investments.
Aside from the major shakeup led by industry pioneer Perfect Day, the EU recently announced a €50M investment geared towards precision fermentation and algae-based food startups, with applications for funding opening in May this year.