By Bill Liao, General Partner, SOSV
Back in 2014, SOSV engaged in an experiment to see if synthetic biology startups could benefit from the same type of programs that hardware and software companies were enjoying. After all, SOSV’s HAX program was, and still is, churning out success stories. But until we actually tried it, no one knew if a biotechnology company could benefit from the lean startup approach we were applying at HAX.
So in 2014 we invited Mufti (today known as Perfect Day), which was very early in the protein manufacturing space, to join a program we started called RebelBio. Back then, the cellular agriculture industry was wholly focused on making things like beer, tofu and insulin. The idea that you might use brewers yeast to make milk proteins instead of alcohol was largely theoretical. But Mufti’s vegan entrepreneurs Ryan Pandya, Perumal Gandhi, and their capable team had a potent vision for a future where milk proteins could be made using cellular agriculture rather than industrial feedlots.
RebelBio took Mufti into the program because we were aware of major problems in the dairy industry. In fact, even though it was years ago, I still remember the moment I discovered the horrifying world of industrial feedlots. While driving on California’s Interstate 5, I encountered a truly awful smell which lingered for miles and miles. I was puzzled and I did some research.
Not only are feedlots terrible for the environment, they are simply cruel to the cows. The cows are kept in brutal conditions and fed a diet based solely on price, which causes them to have poor digestion during the duration of their short lives. This means they need antibiotics, which causes them to belch up methane. Let me be clear. I am quite fond of cows and very fond of dairy products, but there is nothing to love about industrial feedlots.
Let’s get back to Mufti. About halfway through the RebelBio program, the Hong Kong-based VC Horizons Ventures flew the founders there to meet them, cut an investment check, and the results speak for themselves. Today, Perfect Day is making milk proteins without cruelty; and their products are FDA approved and on supermarket shelves. Consumers across the U.S. can buy delicious Brave Robot ice cream (made with Perfect Day dairy) and enjoy all that creamy goodness without ever harming a cow. In September 2021, the company raised $350 million in a series D round led by Singapore’s Temasek and Canada Pension Plan Investment Board and were valued at $1.5B.
We invested $5 million in that round from our SOSV Select Fund and featured the company in our Climate Tech 100. Today, they’re busy doing deals with huge buyers and they have developed a range of products that use their real milk proteins in ways that are both nutritious and delicious. They also can leave out the lactose and spoilage bacteria to further add to the health benefits. Perfect Day is at the tip of the spear in developing new hyper-efficient ingredient manufacturing and supply that are part of a much needed global food revolution. Not only are they one of SOSV’s first biotech investments, they are one of the first SOSV unicorns.
Re-investing in the company was a no-brainer. Once you taste Perfect Day products, it’s obvious they are a winner. From their initial inspiration (vegan cream cheese that was simply awful) to today, Ryan, Perumal, and their team have developed delicious and healthy proteins at an industrial scale, without industrial cruelty. What’s more, they also do so with a huge savings in water and carbon use; and with no methane, pesticides, antibiotics, land, or diesel.
The choice to support and to invest in such amazing technologies is a great (and humbling) one to have. Several years later, our original RebelBio program has ballooned into SOSV IndieBio and now makes up a large proportion of our overall investments. And when I consider the impact these companies are going to have to the benefit of all, it really does feel like a perfect day!