NotCo raises $70M to make its AI available to other companies

Dive Brief:

• Artificial intelligence food tech company NotCo will use a $70 million Series D1 investment round to create a new B2B platform. It will give manufacturers, ingredient companies and tech providers the opportunity to use NotCo’s Giuseppe platform.
• The round was led by Princeville Capital. Other investors include Bezos Expeditions, Tiger Global and L Catterton. The funding round reaffirms NotCo’s unicorn status, valuing the company at $1.5 billion.
• NotCo’s Giuseppe platform helps the Chilean company discover which plant-based ingredients to use for an end product with a taste, appearance and behavior most like the traditional foods they are replacing.

Dive Insight:

Since NotCo first started in its home country of Chile in 2015, it’s been a runaway success.

Giuseppe helped the company create its first product, Not Mayo in Chile in 2017. NotCo CEO and co-founder Matías Muchnick said in a previous interview that it had an 8% market share in the mayonnaise-loving country in less than a year. Now the company says it is the fastest-growing food tech company in South America, with plant-based products also available in the U.S., Brazil, Argentina, and Colombia.

In the U.S., NotMilk, NotBurgers and NotChicken are widely sold. NotCo also makes products as part of a joint venture with Kraft Heinz. Kraft NotCheese Slices are now available on some Ohio store shelves, with a national launch planned for 2023.

With so much evidence of the Giuseppe’s power, many food companies are likely interested in harnessing it for themselves. Through this new program, they will be able to.

The release announcing the funding doesn’t go into great detail about how the program will work, but it makes sense for NotCo to extend its capabilities to other companies that are looking to get into plant-based options. NotCo has a dozen U.S. patents for its system that finds ingredients to recreate the taste, texture, functionality and smell of animal-based foods.

NotCo’s work with Kraft Heinz shows AI can quickly create a marketable and convincing product — it was only eight months between the announcement of the joint venture and the initial launch of NotCheese. NotCo’s B2B arm could yield the same results. This could be valuable in an industry that can take a year to 18 months for a product to go from a successful concept to store shelves.

NotCo isn’t the only successful food-tech company that has branched out into the B2B space. In September, precision fermentation dairy leader Perfect Day launched nth Bio, its biotech-as-a-service business. Nth Bio, which is established in Perfect Day’s Salt Lake City hub, works with newer startups on their technology and helps them scale up steps that can be difficult and cost-prohibitive.

Unlike Perfect Day, which works with other companies using precision fermentation to create individual proteins that are usually found in animal-based items or are difficult to cultivate from plants, NotCo’s services are more general for all food companies. NotCo’s platform could help any product using animal-derived ingredients to reformulate, which most companies do periodically.

NotCo’s still has a lot going with its own CPG brand. In Chile, where the company is the most active, NotCo just partnered with Dunkin’ to create plant-based donuts. It has other restaurant partnerships underway. And NotCo told Bloomberg that the second launch from its joint venture with Kraft Heinz is a familiar one: plant-based mayonnaise.

The latest round of fundraising also shows investor confidence in NotCo during a year when funding has not been as free-flowing. Muchnick told Bloomberg Línea that the company had to take a hard look at its expansion plans this year. It decided to pause work on plant-based fish and expansion to Europe and Asia. 

Muchnick told Forbes NotCo is planning for an IPO in 2025, which is a year after it initially planned. The $70 million will help with expansion and preparations to eventually get to the public market.