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Jeff Bezos-backed plant-based protein AI startup eyes public offering in 2023, $300M valuation by 2024

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NotCo, a plant-based protein startup based in Chile, recently raised a Series C Round of $85 million dollars, one of those investors includes Bezos Expeditions. Matias Muchnick, NotCo CEO, joins Yahoo Finance's The First Trade with Alexis Christoforous and Brian Sozzi to discuss why it was fastest pitch he ever made, the future of the company's products in the U.S. market, online and in retail and much more.

Video Transcript

BRIAN SOZZI: All right, switching gears here a little bit, Latin America-based food tech company NotCo recently closed an $85 million Series C round. We have heard of one of their newest investors-- Amazon's Jeff Bezos, who also heads the investment arm Bezos Expeditions. Here to discuss is NotCo CEO Matias Muchnick. Matias, good to see this morning.

MATIAS MUCHNICK: Thank you.

BRIAN SOZZI: For those not familiar with with your business model, how do you make some of these plant-based products?

MATIAS MUCHNICK: Well, so generally what we do is we develop a new technology that uses AI to really allow us to produce products faster, better, and more accurate than anyone else in the space. These are being sourced from plant-based ingredients and not animal-based ingredients. We have more than 4,000-- 400,000 species of plants in the world. And we just have explored less than 1%.

So our question is always, what plants or what combinations of plants can create the taste, color, smell of traditionally animal-based products, like meat, cheese, eggs, and milk? So that's a little bit the technology that we developed.

ALEXIS CHRISTOFOROUS: So you just close this $85 million Series C round. Not too bad to have Jeff Bezos putting faith in your company. You're big in Latin America, in your home country of Chile. But what do you hope that money is going to do for you here in the US? What are expansion plans like here right now?

MATIAS MUCHNICK: Yeah, so the proceeds of the $85 million are going to be used to consolidate our business in Latin America. We are that top of mind of this category, the fastest-growing food company in Latin America. We are looking into the US to do our first steps end of this year, beginning of 2021.

We're opening up an office in San Francisco. We're opening up a new office in New York. And we're launching one product nationwide probably in three distribution channels-- the online channel, direct-to-consumer, we're launching a retail, and we're going to lunch probably in a QSR to build brand awareness and to make everyone in the US understand what NotCo is and quality and the position of the product.

ALEXIS CHRISTOFOROUS: Where can we expect to see your products in the US? I'd imagine with Bezos behind the company, we'll see it at Whole Foods?

MATIAS MUCHNICK: Well, we try not disclose that at this time. We have had a lot of inbound interest. But, of course, it makes a lot of sense to have both Amazon and Whole Foods behind the products of NotCo, and probably a big QSR, as we saw other incumbents in the US launching throughout Burger King or McDonald's. In our case, it's going to be another one. So we expect to be there in-- again, in a nationwide launching.

BRIAN SOZZI: Matias, did you get to pitch Jeff Bezos in? What was the pitch like to his overall firm? How did you get them to sign a check to you?

MATIAS MUCHNICK: It was the fastest pitch I've ever made on the-- I got-- so since the first day I got to meet Melinda Lewison, the general partner at Bezos Expeditions, it took three days until they wrote the check. So I can say that it's the most efficient, fastest way of raising money when Jeff Bezos looks at your company into the technology, into the theme, into the execution. With little-- very little money, we did a lot in terms of results. So three days-- it was three days. So it's a good story to tell.

ALEXIS CHRISTOFOROUS: That's got to be a record breaker there of some sort. Tell us about where you see your biggest opportunity right now. I mean, this is a crowded space. And you've got companies that are establishing themselves here in the US, like Beyond Meat and Impossible Foods. Is your biggest opportunity dairy, something that the others are not as committed to?

MATIAS MUCHNICK: So dairy is something that-- NotCo has a product called Not Milk, basically replaces milk in every sense of the word-- taste, texture, smell, color, nutrition, functionality, and so on. So dairy is one of the things that has a high potential in the US market. So you see the consumption rising in the plant-based section, 22% versus 2% of the rest of the groceries.

And you see an adoption. You're getting rid of the skepticism of people of adopting these kinds of products. So generally speaking, plant-based is growing as an overall. And we see a big opportunity, specifically in dairy and dairy fermented, so cheese and yogurt as well.

ALEXIS CHRISTOFOROUS: You also say that you see yourself as the Intel of products. What does that mean? Are you going to be sort of white labeling your products to third-party vendors?

MATIAS MUCHNICK: So this is a great question. What we wanted to do, as a mission of the company always was, to change and do a revolution in the market. And we know that that revolution cannot be done only by ourselves. So many of the other companies are reaching out, the big multinational companies are reaching out to NotCo to introduce, for example, the Not Milk into one of the ingredient lists of their own products, right? So doing or converting into plant-based products that they have traditionally sold in the market.

And they are-- specifically the milk is one of the products that, I said, has exactly the same functionalities like dairy milk, and it's plant-based. It's something that's very appealing for other companies. So they're using Not Milk as an ingredient for their products. So we can-- we're the catalyzers of change in their companies as well.

So we're doing a lot of impact in the market, way more than we're doing with our product itself. So it's not a white label. It's enhancing or introducing a new change to their categories of products.

BRIAN SOZZI: So you want to be a $300 million company by 2024. Are you a public company before you hit that number?

MATIAS MUCHNICK: We always see Beyond Meat IPO. And when they IPOed, they had $80 million in revenues, $30 million in loss. So by 2024, we want to be a $300 million revenue company, with that a positive structure. So I would tend to think that we will be IPOing before that, probably now 2023. So that's a little bit the target of the company.

BRIAN SOZZI: Well, we look forward to speaking with you on IPO day. I'll leave it there for now. NotCo CEO Matias Muchnick, good to see you.

MATIAS MUCHNICK: Thank you, Brian. Thank you, Alex.