French dairy giant Danone has entered into a strategic investment agreement with Israeli startup Wilk, which could lead to a collaboration with the food tech firm to develop cultured breast milk components for infant formula based on its cell technology.
Danone Manifesto Ventures (DMV), the corporate venture arm set up by the Paris-based food giant, will invest $2 million, leading a $3.5 million financing round announced by Wilk, in a filing to the Tel Aviv Stock Exchange on Monday.
Following the investment, the venture arm of the dairy company, which makes Activia yogurt, Aptamil infant formula and Evian water, will hold at least 2% of Wilk’s share capital.
Dr. Nurit Argov-Argaman of the Hebrew University of Jerusalem founded Wilk (as Biomilk) in 2018, and has since developed cell-based technology to produce cultured human breast and animal milk. Argov-Argaman took it public on the TASE in 2021 in a SPAC (special-purpose acquisition company) merger deal.
For the animal-derived cultured milk, Wilk isolates the milk-producing cells from cows’ udders and transfers them to a bioreactor, where they are exposed to materials patented by the firm to produce milk ingredients, but without needing a cow in the final milk-producing process.
The process is also applied to the lab production of human breast milk — complete with the fats and proteins that make up important parts of the nutritional value — using cells from breast reduction surgeries.
As part of the strategic agreement between Danone’s venture arm and Wilk, the parties will examine strategic cooperation for the development of breast milk substitutes that will include lab-grown breast milk components.
The agreement also stipulates that Danone and Wilk will examine possibilities for joint commercial cooperation and operations, which may include agreements for joint development and grants for projects in Europe and the US, Wilk said in a statement.
Wilk CEO Tomer Aizen said that DMV’s investment will help the firm continue in the development of its cultivated milk products.
Wilk is one of several Israeli food tech companies developing cultured, animal-free milk, each at a different development stage. Rehovot-based Remilk, for example, last year raised $120 million for cow-free milk, cheese and yogurt, and with production capabilities already off the ground. The developer of cultured milk and dairy has also announced plans to open the “world’s largest” facility for the production of cow-free milk in Denmark.
However, Wilk is one of few companies on the world stage in the cultured breast milk sector. Wilk’s offering could be a welcome alternative for those who prefer to give human milk, but face difficulties breastfeeding, for babies born prematurely, and for those who cannot consume commercial infant formula.
Wilk said it is not necessarily looking to replace infant formula, but to contribute to a product that is better nutritionally and with a cost comparable to formula.
As such, the Rehovot-based startup has been focusing on developing cell-cultured human milk fat for infant formula to replace vegetable fats currently contained in formula. The nutritional benefits of cultured human milk fat play a central role in maintaining an infant’s digestive system, as well as the development of its brain and nervous system, according to Wilk.
Other investors in the latest funding round, include Rehovot-based Steakholder Foods (formerly Meatech), an Israeli maker of cultivated meat products, which will purchase $450,000 in ordinary shares of Wilk at a 15% discount below their 45-day average closing price, giving the company a 2.5% stake in the Israeli startup. Steakholder Foods said it seeks synergies with Wilk, including strategic cooperation on its proprietary biology and printing technologies.
The Central Bottling Company, also known as Coca-Cola Israel, is also participating in the funding round. The owner of the Tara dairy cooperative, Israel’s second-largest milk processing company, invested $2 million in Wilk back in 2021 as part of an agreement to develop products based on the startup’s cultured milk technology.
As part of the financing round, Wilk will issue a total of 13.6 million ordinary shares in a private placement at a price of NIS 0.91 per share. The startup’s shares closed 10% lower on Monday at NIS 105.1 per share.