Dao Foods Portfolio Company AuX Labs Raises US$4 Million to Accelerate Commercialization of Precision Fermentation Dairy Proteins

Aux Labs

On April 21, 2026, Dao Foods portfolio company AuX Labs announced the successful completion of a US$4 million funding round. Founded in Toronto, Canada by CEO Ted Jin, AuX Labs is a food technology startup developing dairy proteins through precision fermentation.

The new capital will be used to accelerate commercialization of the company’s precision fermentation platform, enabling the production of cheese ingredients that deliver the key characteristics consumers expect from conventional cheese, including meltability, stretchability, and taste. AuX Labs aims to achieve these performance attributes while maintaining a cost structure and production scalability that can match, or potentially outperform, traditional animal based cheese from the outset.

A Large and Growing Market

Cheese is one of the world’s most widely consumed food categories, with nearly 90% of consumers regularly consuming cheese products. According to market estimates, the global cheese market is expected to grow from US$208.1 billion in 2025 to US$317.6 billion by 2033, representing a compound annual growth rate (CAGR) of 5.43%.

At the same time, the vegan cheese sector continues to expand rapidly. According to Cognitive Market Research, the global vegan cheese market is projected to reach approximately US$2.78 billion in 2025 and grow at a CAGR of 13.5% through 2033.

Despite this growth, vegan cheese products often remain more expensive than conventional dairy cheese. This is largely due to the higher cost of plant ingredients such as cashews and almonds, as well as complex manufacturing and fermentation processes. In addition, many vegan cheese products still struggle to replicate the texture and functional performance of traditional cheese.

Technology: Producing Key Dairy Proteins Through Precision Fermentation

To address these challenges, AuX Labs uses precision fermentation to produce dairy proteins with molecular structures identical to those found in conventional milk.

The company’s first product is casein, the primary protein found in milk and one of the most important components responsible for the structure and functionality of dairy products. Casein enables the emulsification of water and fat, allowing cheese to melt and stretch when heated. It is also one of the key ingredients missing from most plant based cheese alternatives today.

The global casein market is estimated at approximately US$2.7 billion. However, conventional casein production relies on dairy farming systems that require significant land, water, and greenhouse gas emissions. While precision fermentation offers a more sustainable alternative, companies in the sector have historically faced challenges in achieving cost competitiveness and large scale production.

Business Model: Leveraging Existing Brewing Infrastructure

AuX Labs is taking a different approach by utilizing existing brewing capacity around the world rather than building expensive new fermentation facilities.

The company partners with existing craft breweries and incorporates brewing compatibility into both strain engineering and fermentation process development. This asset light model creates benefits for both sides. Breweries can generate additional revenue streams and improve facility utilization, while AuX Labs gains access to fermentation capacity without the significant capital expenditure typically required to build manufacturing infrastructure.

By leveraging underutilized brewing assets, the company aims to scale recombinant protein production while narrowing the cost gap with conventional dairy proteins.

Commercial Progress and Regulatory Status

In April 2025, AuX Labs completed a self affirmed Generally Recognized as Safe (GRAS) assessment in the United States for its casein ingredient, allowing food manufacturers to incorporate the ingredient into products sold in the U.S. market.

The company is currently conducting pilot projects with customers and preparing for larger scale commercialization of precision fermented cheese products.

The new funding will support production scale up, team expansion, and partnerships across both foodservice and consumer packaged goods channels.

According to CEO Ted Jin, the company’s platform is not limited to a single protein and has the potential to expand into a broader range of food applications in the future.

The financing round was co led by  NYA Ventures and  Nàdarra Ventures, with participation from  Verdex Capital,  Builders VC, and existing investors  Bluestein Ventures and  Congruent Ventures.

Mary Dimou, Managing Partner at Nàdarra Ventures, noted that AuX Labs’ platform has the potential to expand into multiple high value protein categories, creating opportunities for scalable growth across products, markets, and applications.

Alison Sunstrum, Managing Partner at NYA Ventures, highlighted the company’s focus on unit economics, manufacturability, and product performance as key factors supporting its ability to compete in one of the world’s largest food categories.

Dao Foods Perspective

Investment in recombinant casein continues to accelerate globally. Companies such as Those Vegan Cowboys and Standing Ovation have recently secured multi million dollar financing rounds to expand their presence in the U.S. market.

Against this backdrop, AuX Labs has differentiated itself by focusing not only on product performance, but also on manufacturing economics. While many companies in the category remain focused on scaling production and reducing costs, AuX Labs has already demonstrated a pathway toward price parity with conventional dairy cheese.

At Dao Foods, we believe this combination of functional equivalence and cost competitiveness could become a critical advantage for the next generation of dairy alternatives. As consumers increasingly expect alternative products to match conventional foods in both performance and affordability, companies capable of delivering both will be best positioned for large scale adoption.