Swedish startup Noquo Foods has raised €3.25 million ($3.7 million) in seed funding from a list of heavyweight investors to develop plant-based cheese. Since starting the company just over a year ago, founder and CEO Sorosh Tavakoli says there are still no alternatives on the market that appeal to cheese eaters.
Impact investment firm Astanor Ventures led the round, joined by tech VC firms Northzone, Inventure and Creandum and a high profile individual investor Henry Soesanto , CEO of MondeNissin Group who owns Quorn. Purple Orange Ventures, Swedish plant-based food company Kale United, investment group Martas Explorers, as well as Noquo’s senior advisor Daniel Skaven Ruben and Joshua Ismin, also invested.
The company was originally targeting $2 million but investor interest enabled it to increase the round, which Tavakoli says is helpful in future proofing the company, which wont need to raise funds again for another two years. “Of course a larger round means a large valuation too but also means we can afford a few mistakes — everyone makes mistakes — and we’re in good shape if something like an economic downturn happens.”
With the funds, Noquo Foods will increase the team, particularly in the R&D department, and after spending over a year as a two-person team, the team has already doubled to bring on two scientists. It is now looking for a food product developer, a technician, a food technologist, and a culinary developer/chef.
The team has yet to settle on what its core ingredient(s) will be but it will probably be a legume and use fermentation processes, Tavakoli revealed.
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“We’re not looking at nuts or cultured options; we want to get to market faster than those paths offer but we’re also looking to have a protein base and product that’s fundamentally made of proteins in its core structure. This will be quite differentiated from other products; the biggest sellers are made from starch and coconut oil bases and have zero protein,” he added.
Tavakoli’s cofounder Anja Leissner, a biologist and head of R&D for Noquo Foods, had been researching the plant-based cheese space previously at a small consulting firm Solve Consulting that also worked Oatly with it’s oat-based coffee product. She also worked in the dairy industry previously.
“Clearly this is a hard problem to crack as there are still no reallly good alternatives on the market and the market has yet to take off so it’s a product issue. We hope to launch something this year, probably at a small scale to food service customers initially. We’re don’t want to reveal too much but also it’s so unpredictable,” said Tavakoli.
Why is Noquo the team to succeed where others have not?
“We have a unique team: an entrepreneur, who knows how to build a business, and the scientist, who can focus on getting the product right, the core challenge in plant-based cheese. And now we’ve clearly proven that we can attract the kind of capital that’s needed to do something like this and we know most companies don’t have access to, which is why many of the half-ass attempts out there have not taken it all the way. And finally, we have laser focus on this one problem that we have been obsessing about from day one. We have everything we need to succeed, now we just have to go do it.”
Tavakoli founded VideoPlaza that was successfully acquired in 2014.
Noquo is the latest plant-based and alternative protein startup to raise funding already in 2020. It follows a mammoth $225 million round for Califia Farms’ plant-based milk business a couple of weeks ago, and comes just after Memphis Meats raised $161 million in Series B funding.