Remilk, a startup that takes the cow out of dairy production, is ramping up production of its genetically modified milk – which it says is more nutritious, sustainable and profitable than its livestock rival.
Why is this important: Alternative proteins – made from plants like soybeans, peas or mushrooms, or grown entirely in the lab – have attracted venture capital dollars thanks to investors eager to tick the ESG box and anticipate consumer trends that promote healthy food that respects the environment.
- Upside Foods, which raised a $400 million Series C round in April, was one of the industry’s largest funding rounds in the second quarter.
Catch up fast: Tel Aviv-based Remilk raised $120 million in its Series B in January.
- Hanaco Ventures led, and Precision Capital, Rage Capital, CPT Capital and Intercap were among the investors who joined.
- Remilk will use the funds to build its own factory in Denmark by 2024, which will allow it to ramp up production of commercial batches of its alternative dairy protein.
And after: “We’re not done with funding,” CEO Aviv Wolff told Axios, adding that the company will explore additional funding opportunities, both on the equity and debt side.
- He would like to raise a figure in the “triple digits of millions of dollars” by the first half of next year, but added, “there is no active cycle at the moment”.
- “The aim of the additional capital, even in these difficult times, is to further increase production capacity due to the growing demand knocking on our doorstep,” says Wolff.
How it works: Remilk uses technology, biology and common biomanufacturing processes to make milk proteins that are essentially identical to those of a cow.
- “We’re actually copying the specific gene that codes for the production of key functional ingredients in milk,” says Wolff.
- “It’s like taking the cow’s recipe for how to make milk,” says Wolff.
- Remilk also creates dairy-like products including mozzarella, cream cheese, yogurt, ice cream and chocolate. (And unlike its beefy counterpart, Remilk doesn’t use lactose, cholesterol or growth hormones in its product, says Wolff.)
State of play: The company has signed a few contractual agreements and expects its products to roll out to shelves in Israel and the United States in the coming months.
- Remilk produces its proteins at more than five production facilities around the world, says Wolff, adding that production is “already at industrial scale.”
- As production ramps up, Wolff expects the company’s milk to reach cost parity with the animal product it would replace.
- “Ultimately, we expect to be up to five times cheaper than traditional dairy products, while offering [virtually] the same product,” explains Wolff.
To note : “The only thing that will allow us to truly transform the market is if we can price our products at or below the traditional supply,” says Wolff.
- He says Remilk will be able to do this through large-scale, high-volume production facilities that “allow the economy of scale to significantly reduce production costs.”
- “Precision fermentation is extremely scalable,” he says, because it requires a few ingredients in a stainless steel tank.
- Not having a cow (reflection, maintenance, care, etc.) in the equation also reduces costs, he adds.
The bottom line: “We work with CPGs,” he says, and “they’re happy to transform their portfolio, but they demand two things: quality parity and cost parity.”