NotCo, a Bezos-backed foodtech and AI startup, wants to be Chile’s first “unicorn”

RIO DE JANEIRO, BRAZIL – The global explosion in sales of plant-based foods has a Chilean startup backed by Amazon.com Inc founder Jeff Bezos targeting a record valuation for the company.

NotCo SpA., maker of the vegan NotMilk sold at Amazon’s Whole Foods stores in the US as well as at Pão de Açúcar supermarkets in Brazil, is determined to reach so-called “unicorn” status in its next funding round, or an estimated value of US$1 billion. It’s citing a 2021 outlook of a fourfold increase in sales and a fivefold jump in volume as the basis for what could be a tripling of its current worth, which some reports have put at more than US$300 million.

The company is funded through this year, and will only take money before that to reach its goals more quickly, Chief Executive Officer Matias Muchnick said in an interview.

“It has to be for a valuation of US$1 billion,” Muchnick said. “We won’t budge from there.”

NotCo’s optimism about its potential worth is not uncommon in the alternative protein sector, which investors have showered money on in recent years. Concerns about the environmental impact of meat has fueled a boom in the popularity of protein-rich products made from plants, especially faux burgers and imitation milk. Global sales are around US$35 billion, said Nick Cooney, a managing partner at Lever VC, which invests in the space, and several “unicorns” have already emerged.

Vegan burgermaker Impossible Foods Inc. is valued at around US$6 billion, while Just Inc., which makes plant-based egg substitutes, has a valuation north of US$1 billion, Cooney said. Oatly took American coffee shops by storm with milk made from oats in 2018, and most recently raised US$2 billion. The company has announced plans for an initial public offering with a target of US$10 billion.

Brazil-based fintech Nubank, the region’s largest private startup, is now valued at US$25 billion, and Colombian delivery app Rappi Inc. is now valued at at least US$3.5 billion. Payment provider dLocal became the first unicorn to hail from Uruguay, while Mexico’s used-car platform Kavak’s valuation reached US$1.1 billion.

If NotCo succeeds, it will be a first for Chile. The previous biggest startup deal from Chile was the 2019 sale of a controlling interest in Santiago-based online grocery delivery firm Cornershop to Uber Technologies for US$459 million.

NotCo, founded in 2015 by Muchnick, Karim Pichara and Pablo Zamora, has raised US$120 million in three funding rounds. Among its investors are Jeff Bezos’ Bezos Expeditions, Catterton Partners, Kaszek Ventures, Twitter co-founder Biz Stone, and 3G investment arm The Craftory, among others.

Muchnick is betting that the company’s rapid growth will justify the valuation and a potential initial public offering of shares in 2023. Because of confidentiality agreements Muchnick declined to say how much the company plans to sell this year.

NotCo uses artificial intelligence to analyze molecular structures and find new combinations of plant-based ingredients. Its products include mayonnaise substitute NotMayo, NotIceCream, NotMilk and a NotBurger.

So far NotCo has entered the Argentine, Brazilian and US markets, outsourcing production activities to local food suppliers. It is in talks with supermarkets in Canada to sell NotMilk, and is also eyeing an entry into Colombia, Mexico and Peru.

Source: Exame

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