CPP Investments co-leads $350m round for Perfect Day

The Canadian pension invested into the start-up, which plans to go public, through its Climate Change Opportunities strategy.

CPP Investments and Temasek have co-led a $350 million Series D for alternative dairy start-up Perfect Day.

The Canadian pension made its first investment in the company in July 2020, when it committed $50 million and led the second tranche of Perfect Day’s $160 million Series C.

Perfect Day was founded in 2014 by bioengineers Ryan Pandya and Perumal Gandhi to develop an animal-free milk protein using precision fermentation.

The company started selling its proprietary milk products to food companies in 2016 and has a consumer division that produces products such as cheese and milk, which entered the US retail market in 2019.

In mid-2020, Perfect Day added a bioprocess scale-up facility located in Utah to offer “enterprise biology,” which the start-up intends to use to provide services to companies to “harness the sustainability and scale,” it said in a statement.

CPP Investments and Temasek were joined in the round by Horizons Ventures, SK Inc and Bob Iger, executive chairman and chairman of the board at The Walt Disney Company. The $350 million Series D brings the company’s total funding to $750 million.

CPP Investments’ $50 million placement into Perfect Day in 2020 was the first capital deployment from the pension’s Climate Change Opportunities strategy.

Launched in 2019, the CCO strategy is split into three “structural drivers” and will seek out opportunities created by physical changes, such as temperature and sea level increases, policy and regulatory “transitions,” and shifting food consumption behavior, group managing director Leon Pedersen told Agri Investor last year.

The CCO strategy is housed in the pension’s C$6 billion ($4.7 billion; €4 billion) Thematic Investing portfolio, which was launched in 2014 to make investments with the potential to insulate CPP Investments from structural and disruptive changes.

Roughly one-third of the portfolio is exposed to private markets while the remaining two-thirds is public. Pedersen said he hopes this will convince start-ups that the pension is committed to their business for the long term and is comfortable holding onto its investment in companies that choose to go public.

In its statement announcing the $350 million Series D, Perfect Day said it has hired four new senior executives to grow the business “with an eye toward eventual strong public market performance.”

Among the new hires is former Cargill vice-president and group finance director Chuck Thorn, who joined Perfect Day as vice-president, finance.

Perfect Day co-founder Gandhi said in a statement: “There are innovators all over the world with ideas and ambitions similar to our animal-free milk protein, but need help getting there. We’re standing up business models to be able to share our demonstrated capabilities in a way that maximizes upsides for all, yet ensures that Perfect Day remains at the forefront of our new industry.”