Israeli milk alternatives startup Imagindairy raises $15m

Israeli startup Imagindairy, which is developing animal-free milk proteins using fermentation technology, has announced that it has raised $15 million in an extended seed round, bringing the total amount raised in the round to $28 million after the company raised $13 million last November. Imagindairy began in the laboratory of Prof. Tamir Tuller and Dr. Eyal Afergan at Tel Aviv University, with the aim of cultivating microorganisms and using them to produce a new milk identical in taste, color, and consistency to cow’s milk, without environmental damage or negative health values. The ultimate aim is that the company’s products will be used in the dairy industry as an alternative to animal proteins.

The current round was led by Target Global, with participation by the company’s existing investors Strauss Group, Emerald Technology Ventures, Green Circle Foodtech Ventures, Collaborative Fund, New Climate Ventures, and FoodSparks by PeakBridge. The company says that the capital raised “will be used to accelerate the company’s R&D efforts to launch a range of real dairy products without using animals. It also will help attract additional talent to its expanding workforce.” It adds that it is working intensively with food manufacturers on the development of new products.

The company is currently at the stage of ramping up its production capacity, and it plans to launch a first product in 2023. Afergan says that the current investment will help the company strive towards production on a commercial scale and “completely change the existing rules of the game, in which the global dairy industry, which turns over hundreds of billions of dollars a year, is responsible for massive environmental damage to planet earth. Our solution opens up a new world of possibilities based on highly functional, high quality protein.”

The milk alternatives market has been growing steadily in recent years, and turns over NIS 426 million a year in Israel, accounting for 16% of the milk market. The milk alternatives market is led by Tnuva, with a 57% market share.

Strauss Group’s investment in Imagindairy is part of its effort to become stronger in the milk alternatives area. Last year, it announced that it would build a factory at Ahihud in the Western Galilee to produce milk alternatives of European giant Alpro, whose products Strauss sells in Israel.

Imagindairy is focusing on raw materials for the non-animal based cheese industry, which so far has not developed as much as milk alternatives. A similar Israeli startup in this field is Remilk, which recently raised $120 million and plans to open a factory in Denmark to produce milk proteins. There is also a US startup called Perfect Day, the only one in the world that has so far succeeded in penetrating the markets with milk protein alternatives produced by fermentation. Israel is considered a world leader in fermentation. According to research institute GFI, startups in this field in Israel raised more money in 2022 than in any other country apart from the US.

Published by Globes, Israel business news – en.globes.co.il – on May 19, 2022.

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