Startups Should Focus on Success, Not Unicorn Status, NotCo CEO Says

Matías Muchnick, CEO and cofounder of the Chilean startup, talks to Bloomberg Línea about the company’s next moves

The Chilean startup achieved unicorn status in July 2021
March 02, 2022 | 02:29 PM

Santiago — Chilean foodtech unicorn NotCo revealed the surprise news in recent days of its alliance with Kraft Heinz to create a joint venture to promote vegetable-based products, although that project had been conceived 10 months ago, following approaches from the multinational food company, NotCo’s CEO and co-founder Matías Muchnick said in an interview with Bloomberg Línea.

Read More: These 4 Food Giants Added NotCo to Their Plant-Based Menus

NotCo and Kraft Heinz create a joint venturedfd

Muchnick recognizes that the startup has a lot to deliver with its Giuseppe innovation, which recreates flavors and textures of animal-based foods using only plants, while the multinational would provide the commercial muscle.

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“Only now is NotCo ready to do something like this, in the past we were 100% focused on our business making things happen. For the first time we are opening up a little bit to this opportunity, that the technology we invent and the ways we do things are also used by other companies to help us with our purpose: to move the needle on sustainability,” he said.

Read More: Startup Funding Triples to a Record $15B in Latin America

The startup is gaining popularity in the market. Shortly before striking up the alliance with Kraft Heinz, the Chilean unicorn highlighted a move by Danone, which launched a vegan milk with a similar name to its NotMilk, and Muchnick took to Twitter to launch a campaign to invite proposals to rename the French giant’s product.

Matías Muchnick, CEO de NotCo, reprocha a Danone en LinkedIn que, supuestamente, imitara la imagen de su NotMilk (Capture de pantalla de publicación en la cuenta de Matías Muchnick de LinkedIn)dfd

He says the outlook for the entrepreneurial space in Latin America, and especially in Chile, has never been better and, for that reason, many companies are looking to the region.

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“I’ve always said it: ecosystems are built on success stories, not failure,” he said.

Read More: Foodtech trends in LatAm: The “rush to deliver the Cokes,” and “alt-protein”

But he also believes that the “obsession” with achieving unicorn status is not helpful. “I also don’t recommend anyone, any founder, to be thinking about whether they are going to be a unicorn or not. If you’re not a unicorn you might as well be successful, let’s pour cold water on this unicorn, centaur boom. I think we are going the wrong way if we are flaunting concepts so much and not realities,” he said.

This conversation was edited for length and clarity.

When will we see the first products from Kraft Heinz Not Company LLC?

This year.

Do you already have a portfolio in mind?

There is a theoretical framework from which we are going to work in terms of categories, brand and geographies, but we can’t reveal details yet.

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Do you have plans to forge other alliances with multinational companies?

No, we want to be a company that focuses solely on this alliance over the next few years. We are interested in doing things well and when one takes on too many projects one ends up doing all of them, but none of them very well.

A multinational launched a vegan milk with a lot of similarities to NotMilk. What are your thoughts on that?

We welcome competition, we receive it with open arms, it allows us to move faster and better, and to put pressure on ourselves to continue with a very accelerated innovation. We want to remain number one.

I also take it as a compliment that a company with the tradition that Danone has, with its size and scope, is copying what we are doing. That alone makes me feel that we are on the right track. Secondly, the legal part and, well, that name is already taken and is patented; and obviously we are going to operate in legal terms.

For me, the best of feelings, and it also allowed us to make a very interesting creative campaign, which had a lot of affluence and reactions. The world is no longer tolerating these kind of actions by big companies toward small ones. We are living in another world and they have to realize that.

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A trade association of dairy producers in Chile accused you of allegedly undermining commercial practices in the sale of liquid milk. What is your response to that?

It’s absurd. There is zero rationality, zero rational agreement with the demand made by this union. First of all, we do not compete with the union, we always compete with the rest of the brands that are in the supermarket. If there is something going on, the guild should sue the producers of protein, peas, pineapple; not us. Clearly there is someone who is in charge and who is trying to compete in the old ways of competing: by suing, by trampling on others.

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As big as we want to be, we still have not taken a huge market share from the milk or dairy farmers. It makes no logical sense to us. Our answer will always be: it does not make rational sense, and we simply say that we are not milk (NotMilk) or we are not mayonnaise (NotMayo).

For us this is a reaction to fear and change. They should give up a fight that makes no sense, because to have a fight it takes two, not just one.

We also trust in justice, that the courts will have to do what they have to do. This has been repeated countless times in other countries, always favoring entrepreneurship; so we hope it will be exactly the same.

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How are you plans progressing to enter European and Asian markets in 2022?

Very well, I think the first containers have already shipped to Australia. In Europe we are looking closely to decide which products, which countries and when to launch, but our landing there will definitely be this year. The plans are on track.

In which countries will you launch?

Spain, for cultural and language reasons; Germany, which has a population that follows trends and tends to decide on sustainability as the first factor, so it is seen as a country in which we can launch; and England, which also has a very developed population and an industry that is already on that path.

Will we see new product launches in the next few months or this year?

We have three levels of innovation, one of which is new formulas or current products. That is, a new formula and a new product, a new Burger experience, a new NotMayo experience, which we just launched, and it is something far superior to what we had before. We will continue to work on new versions of the products that we already have.

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The second thing is extensions. If we make a milk, we make a zero-fat or zero-sugar milk. And then comes the other level, which are new product categories: we are looking at the sea, lakes, rivers.

We have to make an important and fast change and then you can expect something with NotFish, NotTuna, NotSalmon, for this year.

Read More: The Best Time to Launch –or Join– a Startup Is Now

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Are you planning an IPO?

It’s not an obsession for the company. We want to get to the point of being a company that could potentially go public by the end of 2023, that doesn’t mean we’re going to go public by the end of 2023.

Companies go public because of a need for liquidity from both investors and founders, and they do so because they have pressure from investors to go public. That has not been the case with NotCo so far, and won’t be in 2023.

NotCo has a lot of growth left, plans to execute and to go find both valuation and capital in the private market. If we find that in the private market, we are going to do it; if we do not find it, then that is something else, then we are going to be thinking about which IPO is the best way to finance the company. But if it is not necessary, what’s the point? It makes you a slower, more structured company that cannot run like a startup, that has to behave more like a traditional company, and we are not interested in that at the moment.

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What’s the healthiest thing for NotCo right now?

To remain a private company, continue growing, making plans, continue to execute. There are still many things to do before becoming a public company.

Translated from the Spanish by Adam Critchley

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