Phyx44 raises US$1.2 million in seed round of funding to develop animal-free milk proteins and fats for use in dairy products
With US$1.2 million in funding from Better Bite Ventures, Ahimsa VC, PeerCapital, Spectrum Impact, Rohit Gulati, MD & partner, Boston Consulting Group, Sandhya Sriram, CEO, Shiok Meats and others, Phyx44 will accelerate R&D, expand the team and work on co-development of product formulation with key partners. The company has also received backing from Big Idea Ventures and Humane Society International, among others. Its first product is expected to be launched in 2024 in Singapore and India.
The Bengaluru, India-based company is using precision fermentation of microbes to create the full stack of whey and casein proteins and fatty acids. These components are identical to the ones found in traditional dairy, but they are animal-free, lactose-free and planet-friendly.
The biggest pain point for consumers who want to avoid or reduce dairy intake whether for animal cruelty, environmental reasons, or due to lactose intolerance is the lack of convincing alternatives, said Bharath Bakaraju, Founder, Phyx44.
“Dairy has a huge environmental cost. Plus, animal welfare is an area of concern. That is why Phyx44 is betting on microbial fermentation as the best way to replicate dairy. This technology teaches microbes to do what a cow or buffalo would do inside its cells. The company has already made whey and casein proteins at lab scale and are in the process of scaling them up. Fermentation is a key pillar of smart protein, globally known as alternative protein,” he added.
Nicole Rocque, senior innovation specialist, Good Food Institute India, said, “This sunrise sector has a key role to play in meeting the Union government’s ambitious target of growing the bioeconomy to US$300 billion by 2030. India is quickly becoming the preferred destination for both innovation and manufacturing of smart protein, and will play a key role in the development of bio-enabled solutions globally. Startups like Phyx44 have the potential to accelerate new product innovation and lay down the path toward cost reduction, establishing a model for growth of this technology in the developing world.”
“The intersection of India being an agrarian economy, the largest producer and consumer of dairy, and a huge pharma producer provides a massive opportunity for Phyx44 to serve global demand for dairy ingredients and products, sustainably. The team’s technical prowess is reflected in how swiftly they have scaled to a 100L capacity”, commented Jinesh Shah, Chief Investment Officer, Ahimsa VC, who participated in the seed round.
“What we do not see getting enough attention is fats. We are one of the very few companies working on key fat components alongside key dairy proteins because this will go a long way to create a superior product”, said Bakaraju.
Building a full stack enables Phyx44’s products to be used in a host of applications, including ice cream, cheese, baked goods, and more, advancing the alternative dairy sector across dimensions of taste, functionality and accessibility.
Although based in India, Phyx44 is keen to become a global player. The low cost of R&D and manufacturing in India has its benefits. “Phyx44 will leverage the base in India and provide affordable, sustainable dairy proteins and fats to partners and consumers globally," said Michal Klar, founding partner at Better Bite Ventures, who led Phyx44’s investment. "With its biotech infrastructure and talent pool, India can be the smart protein factory of the world."
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