Animal-free dairy company raises $120M for commercialization

Israeli animal-free dairy company Remilk raised $120 million in a Series B funding round led by Hanaco Ventures with participation from a number of other investors, including Impossible Foods backer CPT Capital, plant-based protein company Just, Yofix, Precision Capital and Rage Capital. This funding round expands the startup's funding by 10 fold and is the largest investment in a cow-free dairy company to date, according to The Times of Israel.

Funds from this investment round will be used to scale its production of animal-free dairy as an ingredients provider. The startup said in a statement that it intends to have its proteins in commercial products at some point this year.

Already Remilk has production facilities in Europe and the United States where it is working with dozens of food and beverage companies to position itself as an ingredient provider of animal-free dairy proteins for their products. However, the Israeli startup is still collaborating with regulators to approve its dairy proteins for sale.

Despite continued regulatory hurdles for dairy made without animals, the category is gaining steam as more and more companies receive funding to develop proteins that are not reliant on ruminant or traditional farm creatures to produce the milk, cheese and yogurt that consumers crave. In Israel alone, there are two other major startups that are leading the charge in this area: Imagindairy and BioMilk. The former raised $13 million last November to expand its production while the latter, which uses cell culturing technology, went public on the Tel Aviv Stock Exchange in April of 2021.

Remilk is taking its own approach to creating animal-free dairy by manipulating animal protein genetics, extracting the necessary dairy protein genes and inserting them into a single-cell microbe that can multiply and scale. These cells are then transformed into a dried powder product to which food manufacturers can add water for their cheese, yogurt and ice cream applications. Remilk itself is equipped to offer ready-made hard cheese, yogurt and cream cheese products.

According to the company and reported by the Times of Israel, its model is “100 times more land-efficient than the existing dairy system, 25 times more feedstock-efficient, 20 times more time-efficient, and 10 times more water-efficient.”

While consumers are still waiting for products sporting animal-free dairy labels to appear on shelves, the movement and funding within the industry is indicative of its imminent arrival. Already, the milk alternative market — which is separate from the plant-based milk category — was valued at $22.25 billion in 2021. With the emergence of cultured dairy options in commercial products, that figure is expected to jump to $53.97 billion in 2028, according to research firm Fortune Business Insights.