Dairy industry will "soon be upended" says Mellon, following record-breaking fundraise

Formo, a Berlin-based firm that uses precision fermentation techniques instead of cows to produce milk proteins, has raised $50m in a Series A funding round. It says it will use the funds to ramp up production and increase headcount as it looks to diversify its offering.

The dairy industry will “soon be upended” by disruptors, says entrepreneur Jim Mellon, after a company he has backed bagged the “largest” European FoodTech funding round to date.

Mellon, the director of alternative protein investment vehicle Agronomics, believes the current dairy industry will be usurped by firms using alternative ways to make dairy products.

Mellon said that “the conventional dairy industry will soon be upended by novel technologies helping to reduce climate change and to improve human and animal health".

His comments follow animal-free dairy firm Formo- which Agronomics is an investor in –raising $50m in a Series A fundraise.

Berlin-based Formo said the deal was the “largest” Series A FoodTech funding round in Europe to date.

Formo makes cheese by using precision fermentation techniques instead of cows to produce milk proteins. It claims to “create nature-identical dairy products”.

The funding round was headed up by EQT Ventures, with Elevat3 Capital and Lowercarbon Capital as co-leads.

Other investors included Lionheart Ventures, Happiness Capital, and Albert Wenger.

Agronomics invested $3.15bn this time around, meaning it now has a 5.94 per cent equity stake in Formo.

Agronomics co-led Formo's €4 million Seed round in 2019.

The startup says it will use the funds to ramp up its operations, including building a pilot plant, speeding up production and growing its headcount.

On the back of the funding, Formo said it plans to expand its product portfolio to represent a wide variety of European dairy specialties such as mozzarella and ricotta.

Raffael Wohlgensinger, co-founder and CEO of Formo, said:  "With our technology, we aspire to lead the paradigm shift towards a more sustainable and equitable food system for this planet

"To achieve our goal of a zero-carbon economy, we need to invest at least as much attention and resources into making our food system radically more sustainable as we are investing into clean energy."

Christian Angermayer, founding partner of Elevat3 Capital, added: “The true cost of dairy on human health, planetary health, and animal welfare is devastating, yet governments across the world still subsidize this industry.

Angermayer said that Formo’s products would be “price-competitive in no time”.

Formo began life as Legendairy Foods but rebranded earlier this year.