A love of food — and, well, cheese — has landed German fermentation startup Formo‘s co-founder Roman Plewka and its team a hefty $61 million Series B round to keep scaling production of their climate-friendly, animal-free cheese.
The Berlin-based startup’s first products use a base of Koji protein, a type of fungal microorganism that’s been used in Asian cuisine like miso and soy sauce for thousands of years. But while Koji is an ancient ingredient, Formo claims to be the first fermentation startup to be able to use it to make industrial quantities of dairy-free cheese.
Thing is, the phrase “vegan cheese” can clear a room faster than a slab of Stinking Bishop. Many early versions of non-dairy-based cheese products are a very poor imitation of the real deal. They generally use plant proteins as a base but are larded with additives to concoct something that approximates cheese. Unfortunately, this often means unhealthy, funky tasting foodstuffs with a gluey mouthfeel.
Better quality vegan cheeses do exist, but these are often made using a nut milk base, which can bump up their retail cost. Formo’s use of Koji proteins is a fresh twist in a challenging category that it hopes will cut through with consumers.
Being a fungus, Koji isn’t a plant; it’s a microorganism. So these proteins can be grown through fermentation in vats — it’s a bit like brewing beer. It’s also a nutritious choice for food, per Plewka, who claims Forma’s non-dairy cheeses have “like-for-like” protein content as conventional cheese.
“We founded the company in 2019 and ever since we’ve developed three technology platforms — and created a lot of IP value; patents and trade secrets,” he tells TechCrunch. “During that time, we have been the only player in the market that was able — or is able to — now launch profitable products at full industry scale with the second largest retailer out there, which drove a lot of the investor interest that we converted in the Series B.”
Dual strategy
The use of Koji as its starter protein allows Formo to sidestep having to have a novel foodstuff approved by European regulators — a process that can take years — meaning it can put its foods straight to market and start earning revenue.
While Formo calls itself a precision fermentation startup, Plewka emphasizes this “dual strategy” — explaining it started with something called “micro fermentation”, which doesn’t entail altering the genetic structure of the microorganisms involved, so there’s no requirement for regulatory clearance as novel foods.
For its first wave of cheeses, Formo is essentially just fermenting and harvesting Koji proteins. It is then using the resulting liquid to produce its cheeses. Since there’s nothing new in terms of ingredients, there’s no need for its Koji-based cheese to get regulatory approval. But, for future products, it does intend to get into gene editing of micro-organisms so it can produce milk proteins without cows and bring a wider range of animal-free cheeses to its portfolio.
The recommended retail price for Formo’s first faux cheeses does set a slight premium compared to dairy equivalents. Its first products are a cream cheese style spreadable curd called Frishchain (€2.89) and a brie-style soft cheese called Camembritz (€3.99). But Plewka reckons the startup will be able to achieve price parity — and possibly go even further eventually — as it continues to fine-tune its technologies and scale production.
The startup spent five years of R&D to develop its production platforms so it can produce a range of different types of cheeses (feta-style and blue are the next products in its pipeline). The first two went on sale just last week, available in four SKUs (plain versions; plus herb and tomato variants for the spreadable product) at more than 2,000 REWE, BILLA and METRO stores in Germany and Austria.
While scaling as a way to squeeze costs is part of Formo’s playbook, Plewka argues that the quality of its products justifies a premium with hugely improved sustainability and animal welfare benefits compared to traditionally produced cheese.
Animal husbandry is extremely land and resource intensive, and the dairy industry has been reported to account for around 3.4% of global carbon emissions. Intensive farming methods also have a poor record on animal welfare and may lead to hormones and antibiotics finding their way into the human food chain. Vegan cheeses avoid all these problems — if only they can scale the big hill of winning over consumers.
Formo says the micro fermentation-based process that’s used to produce Frischhain generates 65% fewer emissions, uses 83% less land, and requires 96% less water than dairy-based cream cheese.
There are no scary additives, either — beyond the limited ingredients list of Koji proteins, plant-based proteins, water and a little salt — so Formo can avoid accusations it’s churning out ultra processed foods (a bucket where some low quality vegan cheese products do clearly sit).
Delicious, joy-filled cheese?
“We just want to bring delicious products with no downsides, no negative externalities, and full pleasure and joy to consumers at no cost for the environment or for the animals or for society as general,” says Plewka. “This really is our mission. It was clear to us that this cannot be achieved with plant-based proteins, because plant-based proteins are simply not functioning in cheese making. So we have turned to precision fermentation in order to create functional and bio-identical proteins for the production of real cheese.”
Plewka came to Formo via a background in food investing and a self-professed love of food. He explains that the more he looked at the food market, the more he was troubled by inefficiencies and other serious problems — from animal welfare and environmental degradation to supply chain vulnerability and a lack of resilience. The startup is his bid to fix all this.
Currently, Formo is able to produce 100 tonnes of the non-dairy-based fermented Koji protein and plant protein-based cheese per month. The new funding will enable it to scale production up to 1,000 tonnes a month by early 2025, per Plewka.
The non-dairy milk base it produces can be handed over to traditional cheesemakers to turn into finished product — something Formo says it’s doing — leveraging age-old processing know-how to yield a more sustainable type of artisanal but vegan foodstuff.
With the Series B funds, Formo says it plans to expand to other European markets and beyond.
With the global cheese market valued at over $240 billion even if it can carve itself a small slice of that hefty wheel, it could make for a very tasty business so it’s easy (cheesy) to see why investors’ mouths are watering.
With the long, initial years of R&D behind it, Formo is sounding bullish over where its journey will go from here on in, suggesting it will reach net profitability sooner rather than later, despite only launching its first products a week ago. “Early reception has been phenomenal,” says Plewka.
As noted above, it does plan to get into precision fermentation — a more complex production process where a microorganism such as yeast is gene-edited so it can produce, for example, milk proteins without the need for any cows to be involved.
A number of other precision fermentation startups (such as France’s Bon Vivant) are also working on non-animal based cheeses. So there’s growing interest in commercializing this type of approach to transform the dairy industry. But such products require regulatory clearance as novel foods means regional launches are still likely years out. (Hence also why Finland’s Solar Foods looked to Asia for the first launch of its novel, micro-organism-based protein blended into a vegan ice-cream.)
Plewka says Formo wants to produce and use non-animal-based casein proteins to be able to bring meltable hard cheeses to its range (he says meltability would be difficult to achieve in a Koji-based hard cheese). But, by starting with the fungus-based fermented product, it’s able to get to market, generate revenue and start building a consumer-facing brand in the meanwhile.
“The big differentiator of casein [milk proteins], really, is that it delivers stretchability,” he notes. “What that means is, as you heat the cheese, the cheese melts, and it creates this gooeyness and stretchiness that you would typically know from something like mozzarella. So this is where our products are limited in their functionality today.”
Formo’s B round is a combo of existing investors, including Elevat3 Capital, EQT Ventures, Foodlabs, Grazia Capital, Happiness Capital, Lowercarbon Capital and M Ventures, plus new investors, such as the retailer REWE Group, which is Europe’s second largest retailer (and already stocking its first products), along with Indiposa Investments, Sazaby League, Seven Ventures, The Nature Conservancy and Woodline Partners.