Phyx44, the first full stack precision fermentation startup in India, said Thursday it has raised $1.2 million seed fund to develop animal-free milk proteins and fats for use in dairy products.

Phyx44 said in a statement the funding round was led by Better Bite Ventures and participated Ahimsa VC, PeerCapital, Spectrum Impact, Rohit Gulati (Managing Director and Partner at Boston Consulting Group), Sandhya Sriram (Chief Executive Officer, Shiok Meats) and others.

The biotech-enabled food science company has also received backing from Big Idea Ventures and Humane Society International, among others.

According to the statement, Phyx44 will accelerate research and development (R&D), expand the team and work on co-development of product formulation with key partners.

The company’s first product is expected to launch in 2024 in Singapore and India.

“As a vegan for over nine years, I’ve always struggled to find good alternatives to curd (yogurt), ice cream and paneer,”

“Dairy has a huge environmental cost. Plus, animal welfare is an area of concern. That is why I was excited when I learnt what we could do with precision fermentation,” said Bharath Bakaraju, Founder of Phyx44.

According to him, the group’s ultimate goal is to create all key components and reconstruct dairy, from the ground up.

“What we do not see getting enough attention is fats. We’re one of the very few companies working on key fat components alongside key dairy proteins because we believe this will go a long way in our ability to create a superior product,” he added.

Founded in Bangalore in early 2021, Phyx44 is using precision fermentation of microbes to create the full stack — whey and casein proteins and fatty acids — to recreate dairy.

The firm is betting on microbial fermentation as the best way to replicate dairy. This technology “teaches” microbes to do what a cow or buffalo would do inside its cells. Fermentation is a key pillar of smart protein, globally known as alternative protein.

The team at Phyx44 has already made whey and casein proteins at lab scale and are in the process of scaling them up.

Sharing insights on the promise of this technology, Nicole Rocque, Senior Innovation Specialist at the Good Food Institute India said this sunrise sector has a key role to play in meeting the government of India’s ambitious target of growing our bioeconomy to $300 billion by 2030.

“India is quickly becoming the preferred destination for both innovation and manufacturing of smart protein, and will play a key role in the development of bio-enabled solutions globally,

“Startups like Phyx44 have the potential to accelerate new product innovation and lay down the path toward cost reduction, establishing a model for growth of this technology in the developing world,” she said.

Ahima VC Chief Investment Officer Jinesh Shah said the intersection of India being an agrarian economy, the largest producer and consumer of dairy, and a huge pharma producer provides a massive opportunity for Phyx44 to serve global demand for dairy ingredients and products, sustainably,

“The team’s technical prowess is reflected in how swiftly they have scaled to a 100L capacity,” he said.

While based in India, Phyx44 has aspirations of being a global player. The low cost of R&D and manufacturing in India has its benefits — as is evident from India’s strong supply base for vaccines, insulin etc.

“We believe that Phyx44 will leverage the base in India and provide affordable, sustainable dairy proteins and fats to partners and consumers globally,

“With its biotech infrastructure and talent pool, India can be the smart protein factory of the world”, said Michal Klar, Founding Partner at Better Bite Ventures.

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