Dairy identical startup Perfect Day is moving closer to going public, announcing it has raised $350 million in a late-stage funding round, bringing its total funding to more than $750 million. The company has also shared the news of Modern Kitchen, the first animal-free dairy cheese brand made using Perfect Day milk proteins in partnership with The Urgent Company.

Perfect Day is now a unicorn, valued at approximately $1.5 billion. The company, which counts Leonardo DiCaprio as an advisor, says its latest round of investors include Singapore-headquartered Temasek and Canada Pension Plan Investment Board (CPP Investments). Temasek, an early investor in Impossible Foods and Eat Just, co-led the round, which saw participation from longterm investors like Horizon Ventures and Bob Iger, executive chairman at Walt Disney, who first backed in the brand in 2020.

What is Perfect Day?

Unlike other animal-free milk options made from plants, Perfect Day is creating cow’s milk proteins including whey and casein, through precision fermentation technology. The company debuted the Bravo Robot line of ice cream made from the fermented dairy in 2019.

Often compared to lab-grown meat, animal-free dairy isn’t cultivated from animal cells. But the end product is identical to its animal version, grown through a process that involves genetically modified microflora. The bacteria then ferment sugar and create dairy proteins—just without the cow. The technology is akin to how synthetic insulin is made.

Is it vegan or not?

This makes the product both vegan and non-vegan at the same time. And with that, a host of hurdles. Its biggest challenge is for people with dairy sensitivities and allergies. Since this is technically whey and/or casein protein, it can trigger allergic reactions.

Animal-free dairy’s other big hurdle is in marketing and merchandising. Is it vegan? From an ethical point of view, animal-free dairy aligns with vegan values: no animals are exploited or harmed in the production process. And stores sometimes slot products like Brave Robot’s ice cream made with Perfect Day proteins on shelves labeled as plant-based. But the product isn’t made from plants and for the unfamiliar–especially those with dairy allergies–consuming it could prove problematic.

Perfect Day IPO

According to sources close to the company, Perfect Day is poised to IPO within the next year, the Wall Street Journal reported. But the Journal cautions: “There is no guarantee it will pull one off, as the red-hot IPO market will inevitably cool at some point and investor enthusiasm for environmentally conscious companies could also wane.”

But concerns about the environment are at an all-time high—and it’s one of the brand’s biggest selling points. Compared to farm-reared dairy, Perfect Day’s milk proteins produce 97percent fewer emissions.

Companies replacing meat and dairy are seeing strong sales booms. According to the Wall Street Journal, sustainable investment funds have reached close to $2 trillion in assets as demand increases.

The brand is also looking at ways to utilize its proteins in pharmaceuticals and other industries.

Big Food appointees

In anticipation of the company’s upcoming IPO, Perfect Day has announced a slew of high profile hires with Big Food background across their business lines including Chief Marketing Officer Allison Fowler formerly of Perfect Snacks, ex PepsiCo’s Alex Brittain as Senior VP, International and Chuck Thorn as VP of Finance who was previously with Cargill.

‘Enterprise Biology’

Perfect Day operates as a B2B supply chain innovator, selling their milk proteins to food companies rather than operating end-consumer brands directly. The company further developed this ‘enterprise biology’ model when they acquired SBF, Inc. , a bioprocess scale-up facility, back in 2020. The idea is to provide what they describe as “technology development services” to food companies who want to make use of Perfect Day’s animal-free dairy tech stack. An example of this in action is their partnership with The Urgent Company, through which they have launched their first animal-free dairy cream cheese brand, Modern Kitchen.

As Perfect Day co-founder Perumal Gandhi says, “We first got into the ingredient business because food companies, big and small, were eager to work with the ingredients we had successfully scaled, There are innovators all over the world with ideas and ambitions similar to our animal-free milk protein, but need help getting there. We’re standing up business models to be able to share our demonstrated capabilities in a way that maximizes upsides for all.”

All images courtesy of Perfect Day.