NotCo Raises $235M Series D Round

Brad Avery

Food tech company NotCo announced today that it has raised $235 million in a Series D funding round led by Tiger Global, bringing its total financing to over $350 million to date. The funding will help the plant-based milk and meat producer to launch its food products in the U.S. and scale its proprietary A.I. technology platform.

What is NotCo?

Founded in Chile in 2015, NotCo produces several plant-based food and beverage brands sold in Latin America, including NotMayo, NotIceCream, NotBurger and NotMeat, as well as NotMilk, a plant-based milk brand which launched in the U.S. last year. Rather than using newly developed ingredients for its products, NotCo utilizes an in-house artificial intelligence algorithm called Giuseppe to analyze the genetic makeup of animal-based food products and determine the best plant-based ingredients that can be used to replicate taste, texture and cooking applications. For example, NotMilk’s ingredients include pineapple juice concentrate and cabbage juice concentrate.

Currently available in retailers such as Sprouts, Wegmans, D’Agostino’s, Kings/Balducci’s, Harmons, New Seasons, Earth Fare, Bristol Farms, Rouses, Weis and Gelsons, NotMilk is available in both Whole and 2% Reduce Fat options. The line is also available online through Imperfect Foods and vegan ecommerce platform Vejii, with a goal of being sold in roughly 8,000 retail doors in the U.S. by year’s end.

In Latin America, the company has also partnered with food service providers, including quick-service restaurants like Papa John’s and Burger King. The company’s products are currently available in about 6,000 retail stores globally.

What will this round let the company do?

The new series D comes hot on the tail of NotCo’s $85 million Series C round last September, which was co-led by Future Positive and L Catterton, as well as an investment last month from Enlightened Hospitality Investments (EHI). EHI partner Danny Meyer, the founder of Shake Shack, serves as an advisor to NotCo’s board of directors. Speaking to BevNET, NotCo co-founder and CEO Matias Muchnick said Meyer has played a significant role in helping guide the company’s U.S. launch strategy.

The new funding brings the company’s valuation to $1.5 billion and includes new institutional investors such as DFJ Growth Fund and ZOMA Lab as well as existing investors such as EHI, Bezos Expeditions, Future Positive, L Catterton and Kaszek Ventures. The round also attracted participation from notable angels like athletes Lewis Hamilton and Roger Federer, and musician Questlove.

According to Muchnick, the round will primarily finance three key initiatives: Launching the company’s food products in the U.S. and Mexico (beginning with NotMayo, NotBurger and NotIceCream), scaling its A.I. systems and launching into Europe and Asia.

As NotCo prepares to expand in the U.S. however, it faces crowded plant-based milk and meat categories, with brands such as Beyond Meat, Oatly, Califia Farms and Impossible Foods already establishing a strong foothold in the market. According to Muchnick, though there is competition, he believes NotCo can win on taste by better replicating animal-based products, and ultimately stealing share from companies offering animal derived products or plant-based alternatives.

“We learned a lot in Latin America in order to come here to the U.S. with a better value proposition,” Muchnick said. “You have a more competitive landscape here but you also have a very sophisticated consumer, which [makes it] easier to get across the right message when you’re trying to promote your product.”

NotCo is also launching an aggressive omnichannel marketing campaign that includes digital, out of home and video ads, including a campaign based around NotMilk called “Milk Meet Your Match.” In addition to online advertising, the company plans to purchase billboards in New York, Florida and California and have a “street oriented” strategy which will also use food trucks and local coffee shops to drive trial.

The company also aims to scale its A.I. technology, updating and expanding its databases and refining the algorithm used to develop new products. This investment will allow NotCo to launch a new revenue stream: selling access to its technology to other food and beverage companies. The opportunity, Muchnick said, is to offer other companies an easy way to produce plant-based versions of their existing (and well-known) products.

Between sales and marketing in the U.S., Europe and Asia and the technology side of the business, NotCo anticipates it will more than double its headcount to over 200 employees by 2022, Muchnick said.

“There’s a lot of inbound interest for other companies to use our platform to generate their own plant-based versions of their traditional brands,” he said. “And that’s pretty interesting because as a company and as a mission we always said we’re not going to do this alone. And if we can [work with] other companies in the food space then fantastic.”