Food & Climate
Singapore startup Prefer has raised $4.2M in funding to expand its bean-free coffee and cocoa globally, and announced partnerships with Ajinomoto and The Coffee Ferm.
A funding round was co-led by At One Ventures and Chancery Hill Capital, with additional participation from existing investor Forge Ventures. It takes the firm’s total raised to $6.2M, following a $2M seed round in early 2024, according to a report seen by “Food & Climate” platform.
“[The raise] took us around six months from start to finish,” co-founder and CEO Jake Berber, said.
As a marker of its international ambitions, Prefer has signed commercial deals for its beanless coffee with Ajinomoto in Thailand and CPG brand The Coffee Ferm in Australia and New Zealand.
Additionally, the company has also launched the bean-free cocoa powder it first teased in January and the soluble “coffee extender” it announced last month.
Reducing the need for commodity coffee and cacao farming
“Our investment in Prefer reflects both the urgency of reducing our food system’s agricultural footprint and our conviction in this team’s ability to deliver a sensory-equivalent experience with radically lower environmental impact, all while driving cost savings for customers,” says Helen Lin, partner at One Ventures.
“By reducing the need for commodity coffee and cacao farming, Prefer is enabling a future where taste and climate alignment can go hand in hand,” she adds.
Founded in 2022 as a spinoff from Singapore’s Agency of Science, Technology and Research (A*STAR), Prefer leverages fermentation and food waste to develop solutions to climate-threatened crops. It upcycles food industry byproducts like surplus bread, okara (the leftover pulp from tofu production), and brewers’ spent grain, and ferments them with food-grade microbes.
These ingredients(bean-free coffee and cocoa) are then roasted and ground just like conventional coffee and cocoa beans, with the process unlocking the same aroma volatiles found in them. Prefer then supplies these innovations to CPG companies, food manufacturers, private-label retailers, and flavour houses for use in a range of products, while also selling them under its own consumer brand.
Its bean-free coffee portfolio includes roasted and ground coffee, concentrates, ready-to-drink lattes, and a soluble coffee powder, which are 50% cheaper than arabica on average and have an 85% lower carbon footprint. Instead of replacing coffee altogether, the ingredients are meant to be blended with it (up to a concentration of 40% beanless coffee). This approach allows brands to stretch their supply, reduce costs, and lower emissions.
Why bean-free coffee and cocoa?
The driving force behind Prefer’s bid to transform the coffee and cocoa industries and produce bean-free coffee and cocoa is climate change. Crop failures and low harvests are becoming increasingly common, leading to shortages of the two commodities. Global cocoa stocks have slumped to their lowest in a decade, with plantations in Ivory Coast and Ghana the hardest hit due to extreme weather and crop diseases.
But as demand keeps rising, the products have witnessed massive price hikes too – in 2024, both coffee and cocoa futures broke all-time records, a trend that has continued this year.
At the same time, both coffee and chocolate are highly emissive, water-guzzling products, causing the changes in climate that are, in turn, hurting both industries. It’s why Hershey has cut its profit forecast for 2025 and announced a double-digit hike in product prices due to high cocoa costs, and why Barry Callebaut is exploring cell-based cocoa.
Will Prefer be tempted by the European and North American markets, which are home to the big chocolate makers? “Our focus is Asia for the next 18 months. That said, we are open to and actively accepting inbound interest from US and EU companies looking to license our technology for local manufacturing,” says co-founder and CEO Jake Berber.
It is among an expanding crop of startups exploring bean-free versions of cocoa and coffee. US firms Voyage Foods and Compound Foods are working on both. Atomo, Northern Wonder, and Koppie are developing coffee alternatives, while Planet A Foods, Foreverland, Nukoko, Endless Food Co, Win-Win, and a host of others are innovating with cocoa-free chocolate.
“While we are not privy to others’ exact technology, our strength lies in our fermentation-based flavour creation. We focus on cost and taste above all. Being headquartered in Asia gives us an advantage in the region,” says Berber, according to “green queen” report.