After new funding round, NotCo becomes first Chile-based unicorn

RIO DE JANEIRO, BRAZIL –  The company that manufactures non-animal protein-free milk, mayonnaise, ice cream, and hamburger products announced a US$235 million investment, raising its valuation to US$1.5 billion in a Series D round led by U.S. fund Tiger Global.

The funding also included the participation of venture capital firm DFJ Growth Fund and ZOMA Lab impact fund, as well as celebrities such as tennis player Roger Federer and Formula 1 pilot Lewis Hamilton.

The list of illustrious investors is long. The new funding comes less than 2 months after an investment of undisclosed amount by Enlightened Hospitality Investments, led by the founder of the American fast-food chain Shake Shack.

Before that, the company had raised over US$125 million from investors such as Kaszek, General Catalyst, Future Positive, and Bezos Expeditions.

According to the company, the new funding will accelerate its growth in the United States and Latin America, and expand its product categories to Europe and Asia.

NotCo landed in the U.S. market in the past by selling products at retailers such as Whole Foods – bought by Amazon in 2017, when the company was still run by founder Jeff Bezos. The Chilean startup also operates in Brazil, Argentina, Colombia, and Chile.

In Brazil, the company is mainly concentrated in São Paulo and its products are sold in chains such as Pão de Açúcar, Carrefour, St. Marche and Mambo, in addition to marketplaces such as Amazon and Mercado Libre. There are plans to reach other regions in Brazil, such as the South and Northeast.

Vegan Big Data

The capital injection announced yesterday further intensifies the dispute in a market that generated spending of US$7 billion in 2020, according to the Plant Based Foods Association. This number is expected to grow to US$290 billion by 2035, studies show.

The main exponents of this market are American companies Beyond Meat and Impossible Foods. The former is now publicly traded and is valued at almost US$8 billion. The second is considering an IPO, which could increase its valuation to something close to US$10 billion.

But unlike its competitors, NotCo goes beyond meat – also encompassing the milk substitutes market which has been gaining more steam and has Oatly as its main player, valued at almost US$11 billion on Nasdaq.

Founded in 2015 by Karim Pichara, Pablo Zamora and Matias Muchnick and based in Santiago, NotCo uses artificial intelligence and big data technology to try to copy the texture, aroma and most importantly the taste of food, while replacing animal protein with plant-based compounds.

To do this, the startup works with a team of chefs assisted by an algorithm capable of unraveling the chemical, physical and structural properties of each food to find similar ones in the flora. With each food item analyzed, the information base of the algorithm, called Giuseppe, is enriched.

This has enabled the company to replace the properties of cow’s milk with a mixture made with pea protein, chicory fiber, and pineapple juice, among other ingredients.

As for hamburgers, they contain ingredients such as coconut and sunflower oils, bamboo fiber, cocoa powder, beet juice powder, chia, and spinach. The startup that also produces eggless mayonnaise and vegan ice cream is planning to increase its product range.

An experiment conducted years ago in Chile managed to quite satisfactorily replicate the properties of a hazelnut cream similar to the famous Nutella. The prototype earned the nickname “NotElla.”