PORTLAND — Neutral Foods, a startup offering carbon-neutral dairy products, raised $12 million in Series A funding. The company debuted last year with organic milk products that are now sold in more than 2,000 stores nationwide.
Neutral measures the entire carbon footprint of its products and works directly with farmers to implement projects that minimize milk’s carbon intensity. Its whole milk, 2% milk and half-and-half products are made 100% carbon neutral through investments in carbon offsets, including credits from farmers turning cow emissions into renewable energy.
The startup’s mission is backed by experts including Ann Radil, a former NASA-funded climate scientist and head of carbon reduction at Neutral Foods. Greg Thoma, a climate scientist studying dairy emissions, serves as chief science adviser. The products are certified carbon neutral by SCS Global Services, a third-party verifier for environmental claims.
The injection of capital coincides with Neutral’s ongoing expansion into Whole Foods Market, Sprouts Farmers Market and Target locations as well as its recent entry into foodservice. The company in June began selling its milk and half-and-half products to eateries in Portland. It also rolled out pasture-raised butter in a local grocery store.
Neutral Foods plans to add more grocers to its distribution list throughout the year. It aims to double the number of stores where consumers can find its products by the end of 2022.
“We continue executing our growth strategy to make more Neutral products accessible to those who want simple, daily solutions to protect our planet,” said Marcus Lovell Smith, chief executive officer of Neutral Foods. “This round of funding further supports our approach to being a carbon neutral food company that’s revolutionizing the food industry.”
Led by Bill Gates’ Breakthrough Energy Ventures, the Series A close follows two seed rounds totaling approximately $8 million. Neutral Foods late last year raised $4 million in a seed round that included Mark Cuban. In May it closed an additional round led by Darco Capital’s David Adelman, with participation from celebrity investors including LeBron James and John Legend.
Additional investors from the Series A round include the Japanese firm Global Brain, its CVC partners Kirin Holdings Co. Ltd. and Norinchukin Bank, and Craig Shapiro of the New York-based Collaborative Fund.
“Supporting companies that are working to benefit the greater good is an investment strategy for a better future,” Mr. Shapiro said. “Neutral shows that we can produce food that’s better for the environment, our communities and our families without compromising taste.”
