Better Dairy Secures £1.6M Seed Funding for Animal-Free Dairy

Better Dairy, a United Kingdom-based startup focused on creating dairy products without the use of animals, has secured £1.6 million in seed funding after originating from Entrepreneur First (EF). The company, located in London, is presently engaged in research and development to formulate products that are “molecularly identical” to conventional dairy, but produced without animal involvement.

Happiness Capital spearheaded this seed funding round, with participation from several other investors specializing in the field. These include CPT Capital, Stray Dog Capital, and Veg Capital, alongside contributions from various undisclosed angel investors. Better Dairy intends to utilize these funds to expedite its R&D initiatives, aiming to launch its initial products in early 2022.

Established in 2019 by Jevan Nagarajah (CEO) and Dr. Christopher Reynolds (CTO), both graduates of Imperial College London who connected through EF’s company builder program, Better Dairy is leveraging technological advancements to address the significant sustainability issues within the dairy industry. Nagarajah brings extensive experience from technology companies like Rocket Internet, SumUp, and Ritua, and previously founded the “dark kitchen” startup ShareDining. Reynolds possesses a PhD and multiple post-doctoral qualifications in bioinformatics and synthetic biology, alongside a degree in natural sciences encompassing chemistry and biochemistry.

Nagarajah emphasizes the “hugely unsustainable” nature of traditional dairy farming, citing its annual emission of over 1.7 billion tonnes of CO2 and the substantial water consumption of 650 litres required to produce just one litre of milk. He further notes that dairy products often contain undesirable components like growth hormones and antibiotics inherent in the process of milking cows, making them potentially less ideal for human consumption.

Despite the increasing popularity of plant-based alternatives, Nagarajah contends they are not a comprehensive solution, frequently falling short in terms of taste, texture, and nutritional value. He believes these alternatives may gain some market share but are unlikely to fundamentally disrupt the existing $700 billion dairy industry and its established supply chain. This is the opportunity Better Dairy aims to capitalize on.

“We are employing yeast fermentation and biological processes to create products that are molecularly identical to traditional dairy,” he clarifies. “Our method closely resembles beer brewing, but instead of beer, we produce substantial quantities of dairy. While appearing advanced, this production technique is already utilized for creating various enzymes for food production, such as rennet, and for manufacturing numerous medical products like insulin; we are simply expanding upon existing methods.”

Better Dairy is currently in the early stages of its R&D, but has already successfully produced initial dairy samples in a laboratory setting. The initial step involved modifying yeast to generate preliminary dairy proofs of concept. “Following this, we are confident we’ve identified a clear pathway to achieving commercially viable products,” states Nagarajah. “While some of our objectives are standard procedures, like expanding our manufacturing capacity, the primary challenges involve optimizing our complete production process.”

Nagarajah explains that dairy is a relatively inexpensive commodity. To effectively challenge the current dairy market, the startup must attain a specific level of efficiency to avoid producing a superior product that remains financially inaccessible due to high costs.

“Our initial focus is on dairy proteins, with plans to broaden our product line to include fats in the future,” says Nagarajah. “The primary dairy proteins, whey and casein, offer numerous structural and nutritional advantages and are utilized as ingredients in countless food items. They are essential for the texture of dairy products like cheese, but also feature prominently in soups and ready meals, baked goods, chocolates, sweets, pasta, and bread. They are even incorporated into products like beef burgers and chicken nuggets to enhance protein content and improve texture.”

“While our original goal was to facilitate a range of improved dairy products, our aspirations have expanded to encompass the disruption of the entire dairy supply chain, spanning both dairy and non-dairy categories. Our vision is to establish a world where individuals can adopt a vegan lifestyle without consciously realizing it.”