Zero Cow Factory Bags $4 Mn Funding For Animal-Free Dairy Products

Biotech startup Zero Cow Factory, which produces alternative protein and dairy products, has raised $4 Mn (INR 32 Cr) in a seed funding round, co-led by Green Frontier Capital, GVFL and Pi Ventures. 

Pascual Innoventures, an investment arm of the Spanish dairy group Calidad Pascual, also participated in the round. 

Zero Cow Factory will use the fresh capital to accelerate R&D activities, scale up production capacity, and obtain regulatory approvals to hit the market.

“We are also utilising this fundraising for our pilot facility in Gujarat and then, the regulatory comes as a next step right. Besides India, we are planning to target mature markets such as the US and Singapore,” Sohil Kapadia, cofounder of Zero Cow Factory, told Inc42.

Founded in 2021 by Parini Kapadia and Sohil Kapadia, Zero Cow Factory mainly uses precision fermentation technology to produce animal-free proteins and dairy products. It is currently in the R&D stage and will follow the B2B route and partner with FMCG companies to sell products to end consumers. 

Precision fermentation is a process in which microbial organisms produce a particular product. 

Explaining the production process, Sohil said that the startup first identifies the genes segment or DNA codes in an animal such as a cow, which is responsible for the protein production like a casein (a protein found in milk) and whey. Then, it manually synthesises DNA codes in the laboratory and inserts them into microorganisms.

“At the end, we train microorganisms to produce identical or similar proteins in a lab environment. After this, there is precision fermentation, which is basically done to produce a protein at a large scale. Then, there is a downstream process called purification of the protein,” Sohil explained. 

The Surat-based startup claims that its alternative protein products comprise about 99% pure protein and are free from lactose, antibiotics growth hormones and saturated fats. 

At the moment, Zero Cow is planning to apply for regulatory approval in India and other markets, including the US. It cannot sell products directly in India and the US under regular licences such as FSSAI and FDA. 

“Once we get regulatory approval, we will focus on pricing our products, which will be slightly higher in the beginning. However, the price will come down once products begin to scale,” said Sohil.

 In the past, Zero Cow received an INR 50 Lakh grant from BIRAC for its innovation. Additionally, it also received INR 40 Lakh grant from MeitY (Ministry of Electronics and Information Technology). Besides this, a couple of grants are also in the pipeline, according to the founder.

Notably, the startup does not have competitors in India, but faces competition from global brands such as Perfect Day, New Culture, ReMilk and Imagindairy.

In the overall dairy products space, the Indian startup ecosystem has seen the growth of startups such as Country Delight which sells milk and other dairy products; MoooFarm which helps farmers increase milk yield, buy cattle and get loans, and Stellaps, which helps improve agri-supply chain parameters such as milk production, milk procurement and cold chain, among others.