Innovative dairy startup 1.5 Degree has been able to raise funds of $1 miilion in its Pre-series A round. This was an investment led by 35North Ventures under its India discovery fund II. The new capital, according to the company, is to be used in a set of important expansion projects. The startup will use the funds to expand its production capacity, widen its institutional relations, and penetrate the large Indian urban markets, such as Mumbai, Pune, Bengaluru, Hyderabad, and Delhi.
Brand focus
Operated under Natturz Bio Kontrol Pvt Ltd, 1.5 Degree has the advantage of targeting mostly the institutional food service industry. The brand focuses on the provision of high-quality corporate cafeterias, hotels, educational institutions, and large dining establishments with plant-based dairy and frozen dessert products.
As part of consolidating its position in the market, the company has already formed strategic alliances with major food service provider companies in the world, like the Compass Group and Sodexo. This business-to-business-based strategy enables the firm to achieve predictable and recurring revenues based on bulk-based deals and integrated supply chain business mechanisms, with almost 80% of its entire sales being institutional sales.
Operational expansion and proprietary technology
The company has a wide range of products, such as plant-based milk, yogurt, tofu, and cooking cream, in addition to niche products, such as gelatos, frozen desserts, smoothie Yogurt bowls, and products based on oat milk. One of the most important aspects of the growth of 1.5 Degree is that the company utilizes its proprietary processing technology, which is aimed at overcoming the typical taste and flavor challenges people tend to have when using the plant-based dairy.
The company will strive to provide an easy conversion of consumers who are leaving traditional dairy by offering its products to the Indian palate. The company has emphasized its environmental effects, whereby its production processes emit a lot less carbon and use less water as compared to traditional dairy farming.
Although 1.5 Degree has been highly concentrated on its B2B operations and in-institution Quick Service Restaurant (QSR) formats, it has embarked on a strategic move towards direct-to-consumer (D2C) platforms. This involves setting a footprint in high-end retail stores, experience restaurants, and cloud kitchens through large food delivery portals.
The startup is operating in Bengaluru, Pune, and the National Capital Region (NCR) and, based on its pre-series A funding, will be able to further establish itself in India. Through the integration of the institutional volume and the increasing retail presence, 1.5 Degree aims to be among the top brands in the fast-changing plant-based food and beverage industry.
Conclusion
The 1.5 Degree success in the successful funding round led by 35North Ventures is a critical move because it aims to rebrand the alternative dairy market in India. Having a clear organizational focus on the scale of the institution and technological innovation, the startup is poised to capitalize on the rising demand for sustainable and lactose-free nutrition.
With its growth in manufacturing and expansion into different cities, 1.5 Degree keeps its business expansion plan to the mission of minimizing the negative effects on the environment, offering a strong plant-based alternative with no sacrifice to the usual taste and quality that Indian consumers expect.
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