Perfect Day Discusses New Business Strategy, $350M Raise and IPO Plans

Food tech company Perfect Day is again rethinking its recipe for success.

The company, which originally launched in 2014 with plans to start a CPG line but then pivoted to focusing on ingredients, announced last week it had raised $350 million to execute against a new strategy that will see it adopt a three-pronged approach to revenue: selling ingredients to other food and beverage companies, selling finished CPG products in retail and foodservice, and offering food tech development services to other companies.

The investment was co-led by Temasek and Canada Pension Plan Investment Board (CPP Investments), with additional participation from Horizons Ventures and Walt Disney Co. chairman Bob Iger, as well as SK, Inc. The round brings Perfect Day’s total funding raised to $750 million.

An Indirect Path

Founded by Ryan Pandya and Perumal Gandhi, Perfect Day uses biological engineering to craft its animal-free whey protein. On its website, Perfect Day says it first gives ”microflora the genetic blueprint corresponding to whey protein, enabling it to produce real milk protein,” and then ferments the resulting microflora in order to produce large quantities of the ingredient. The result is animal-free milk proteins that the company claims are identical to the ones found in cow’s milk.

Though Perfect Day initially was focused on consumer products, in 2019 Pandya told NOSH that the company felt it could have a bigger impact by focusing on ingredients. But two years later, Pandya acknowledged the value of branded CPG products, both to demonstrate proof of concept to potential partners and to build support and awareness for Perfect Day’s technologies. So last year Pandya and Gandhi both personally invested in The Urgent Company, at the time a standalone entity, which produces sustainable food and beverage products that utilize Perfect Day’s technologies, as well as other types of food tech.

“I think I would characterize the switch [away from CPG] as not being one we needed to make but one that we luckily were able to make. We had so many companies reaching out to us,” Pandya said last year as The Urgent company launched. “If we’re just another brand on the shelf, it’s going to be hard for us to achieve the level of impact if we were helping all of these different brands make animal-free products. It really struck us not just as an opportunity, but as a no-brainer.”

The Urgent Company’s first brand, animal-free whey ice cream maker Brave Robot, is currently sold in over 5,000 retailers.

Keeping it In the Family

Perfect Day proteins have since been deployed by ice cream brands including Graeters, Nick’s, and Smitten. But there’s more to be done, Pandya said. Citing “the massive potential impact” of its technology, Perfect Day has decided to shift The Urgent Company to “a full-fledged part of the [company] umbrella.”

The company declined to specify exactly what this means, calling it largely an “operational” shift where teams and systems will come together, but then also noting that The Urgent Company will have “the freedom to establish its own identity and relationship with the company.”

The change in structure comes as The Urgent Company reveals its second brand, Modern Kitchen, which will focus on “staples for the modern home chef,” according to general manager Paul Kollesoff. The brand will launch with three flavors of animal-free dairy cream cheese, and eventually expand into other categories.

Still, despite the announcements of the past week, it’s unclear if The Urgent Company’s ownership structure has also changed — though clearly its funding plans have. When the company was founded, Pandya and Gandhi were listed as personal investors in the brand — yet now a spokesperson said The Urgent Company is a fully owned subsidiary and Perfect Day is its primary shareholder. And while Pandya previously stated that The Urgent Company would raise funding for outside investors by mid 2021, the company now says it has no plans to seek outside capital.

A New Focus on Foodservice and Technology Offerings

Not to be lost amidst the slew of announcements last week, Perfect Day also shared details of its renewed focus on foodservice via a partnership with Villa Dolce, a producer of artisanal gelato and sorbetto.

The two companies have collaborated to develop a suite of co-branded products — seven gelato flavors and four cake mixes — for restaurants, scoop shops and food service providers that will be sold via DOT foods. Pandya said the company decided against using Brave Robot to penetrate the channel, but left the door open for other Brave Robot foodservice launches.

Foodservice sales of the cream cheese also seems to be in the works, according to The Urgent Company VP of marketing John Spear. Though Perfect Day said it currently does not have a timeline for launching such a product, in an interview with NOSH Spear said the company planned to share samples of both product lines at Brooklyn Bagelfest last weekend. On the event’s website, both Perfect Day and Modern Kitchen were listed separately as sponsors and vendors.

In addition to its plans for CPG and foodservice, the company also announced it intends to use SBF, Inc, the Utah-based bioprocess scale-up facility it acquired last year, to “provide technology development services for companies looking to harness the sustainability and scale that Perfect Day has proven it can deliver.”

What exactly these services entail is unclear, however, though Perfect Day has claimed the facility will not simply serve as a R&D lab focused on formulation. Instead, Pandya said, SBF will work with companies that “want to use our technology, not our animal free protein.” Perfect Day declined to comment as to what companies it was in discussions with, or if any companies had already used the facility and its services.

After raising over $750 million in funding since its inception, it seems the future of Perfect Day is on the public markets. In a release announcing the most recent fundraise, the company said it had “an eye toward eventual strong public market performance” For now, Pandya added, the company is “focused on growing a resilient business that drives both global impact and value for our shareholders.”

On the product front, it seems the company may be going full circle as well. Modern Kitchen’s website currently states the company “does not make milk…yet.” When asked if a fluid milk product was on the horizon, a spokesperson would only say that the team had created “incredible prototypes of fluid milk” and that the company had the “capability” to make more.