Animal funds

Better Dairy decides on new funding for animal-free cheeses

Food technology company Better dairy products is set to bring its aged and hard cheeses into the testing phase after securing $22 million in Series A funding.

The UK-based company, founded in 2019 by Jevan Nagarajah, is still in the R&D phase to develop animal-free cheeses using precision fermentation. We first got to know Nagarajah and Better Dairy in 2020 when the company raised £1.6m seed funding in a round led by Happiness Capital.

At the time, he explained that animal-based dairy farming was “extremely unsustainable”, requiring 650 liters of water to produce just 1 liter of milk and using a process that emits the equivalent of more than 1, 7 billion tons of CO.2 in the atmosphere each year.

Instead, Better Dairy uses precision fermentation to produce products that are molecularly identical to traditional dairy products, Nagarajah said. The process is similar to brewing beer, with the end result being dairy.

While other food tech companies are tackling soft cheeses like mozzarella or whey protein, Better Daily is targeting hard cheeses, a more complex process, in a more sustainable way.

Better dairy products

Picture credits: Better dairy products

“We see limitations in hard cheese, like trying to create an animal-free steak,” Nagarajah added. “By building a team that includes a scientific director with 30 years of expertise in manufacturing proteins for the pharmaceutical industry, we realized that we could go further and do it consciously.”

Happiness Capital is back for Series A, this time as a co-lead entrant from RedAlpine and Vorwerk. Joining them are Manta Ray, Acequia Capital and Stray Dog Capital.

Better Dairy isn’t alone in tackling the dairy space. Companies like Clara Foods, NotCo, Climax foods and perfect day all working on cheese and dairy alternatives to animals. However, Nagarajah believes the new funding, aimed at advancing precision fermentation technology, will help the company get a head start on the competition to become the first player to launch hard cheeses in this space.

The company is investing the capital in increasing its workforce from eight to 35 people and in a new 6,000 square foot laboratory and office space in east London.

Better Dairy works on the science to determine the texture and then the ripening so that all the components can be brought together under one product that has a shelf life. Nagarajah is optimistic that precision fermentation will reach unit economics – that is, price parity with similar artisanal cheeses – within the next 18 months or so.

“We need the proper space and equipment to improve our science,” he added. “It’s not just about being animal-free and sustainable, but also delicious. If it tastes better, it becomes obvious and a benchmark for success. There’s an upside to doing it right, because otherwise the time it takes to unravel everything could take years.