Food & Drinks

NotCo’s $1.5 Billion Valuation Comes With Big Expectations

When NotCo founder and CEO Matias Muchnick closed a nine-figure series C round of financing two months ago, he predicted that his company would be a unicorn by the end of the year. That milestone arrived far sooner than expected for the 32-year-old, who just raised an additional $235 million, which values his alternative protein company at $1.5 billion. 

“We were not raising,” Muchnick explained, “and then from one day to another day, we had two term-sheets on the table and, we said, oh.” He paused to sneak in a laugh: “We’re raising.” He added: “Some of the funds didn’t move fast enough to make a deal. We were oversubscribed.”

The latest round was led by Tiger Global Management, an investment firm run by billionaire Chase Coleman that’s not exactly known for investing in sustainable food. But since Muchnick, who has his eyes locked on a 2023 IPO, previously said he wasn’t planning to raise another big round until 2022, why raise more now?

The markets have been moving that quickly, Muchnick says. His AI-powered NotCo, which had previously raised from the investment funds of Jeff Bezos, Danny Meyer and former McDonald’s CEO Don Thompson, closed its series D in just two months. It all begs the question of whether all these billionaires and investors were accelerating the market, to which Muchnick responded: “100 percent.” 

That’s a lot of pressure to deal with, because those investors expect returns on what they’ve put in. But Muchnick seems to be used to it. Roger Federer’s Team8 is among the investors he just courted, and he’s up for the challenge of playing tennis with Federer soon. His firm grew some 400% last year and has no indication of slowing down.

Still, many investors forget how logistically difficult the food industry is to win at, consistently. Execution from here on out will be everything for NotCo, and Muchnick.

“There’s more money than ever before. If the companies are actually able to hit their marks…” Muchnick explained before trailing off, and smirking: “We better hit the mark.”  

More On NotCo:

Founding Story: One of the few founders in the alternative protein race from South America, Muchnick grew up in Chile and graduated with a degree in commercial engineering from the University of Chile before applying to do post-graduate work at UC Berkeley and Harvard. Along the way, he founded Eggless out of his garage, a mayo brand now sold in all Chilean supermarkets.

Signature Products: AI-enabled formulas of vegan and non-GMO certified alternatives. In the U.S. the brand sells NotMilk, which is pea-protein based. In South American countries including Brazil, Argentina, Chile and Columbia, NotCo sells its NotBurger, NotCream and NotMayo.

Total Number of Products: 2 milks in the U.S.

Distribution: After debuting NotMilk in America earlier in 2021, it is now sold in 3,000 stores, including Whole Foods nationwide.

The Financial Picture: Muchnick aims to have $100 million in sales come from the U.S. by next year.

Total Raised: $365 million

Valuation: $1.5 billion

Key Backers: Tiger Global Management led the recent series D. Other notable investors include: Danny Meyer via Enlightened Hospitality Investments, Jeff Bezos via Bezos Expeditions, L Catterton, Don Thompson’s Cleveland Avenue, and General Catalyst.

Industry Fundraising: So far this year, at least $535 million has been invested in food tech startups with a focus on AI, according to Pitchbook, which is up 150% compared to the same time last year.

Market Potential: Sales of alternative meat, eggs, dairy, and seafood products are projected to reach as much as $290 billion by 2035, according to recent research by Boston Consulting Group and alternative protein investor Blue Horizon Corporation.

Key Competitors: Oatly (Market Cap: $11 billion+), Beyond Meat (Market Cap: $9 billion+), Impossible Foods, Perfect Day, Miyoko’s Kitchen, private label alt brands, and more.

“It’s about momentum. Since it’s not your own distribution, how many units are you selling? It’s not just about value. It’s about where you are in the average to the rest of the category and how you are performing overall”

-Matias Muchnick, founder and CEO, NotCo, which announced a $235 million series D earlier this week that values the alternative protein startup at $1.5 billion

This article was originally published in Chloe Sorvino’s newsletter, Forbes Fresh Take, which is all about big ideas changing the future of food. Subscribe here.

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