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.
Taking its upcycled, fermentation-derived alternatives to coffee and chocolate global, Singapore-based food tech startup Prefer has secured $4.2M in pre-Series A funding.
The 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.
“[The raise] took us around six months from start to finish,” co-founder and CEO Jake Berber tells Green Queen. “It’s no secret that it’s the toughest time to raise in our industry in a decade. So, raising was our full focus during that period. 20+ investor calls a week was not uncommon. We wanted to move fast so we could get back to building.”
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.
“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 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.
Prefer bets on ‘extending’, not replacing, coffee and cocoa
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 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.
The soluble powder is Prefer’s latest coffee innovation, and can be used in instant coffee sachets, ready-to-drink beverages, flavour extracts, coffee concentrates, and more. The ingredient has formed the majority of the demand from its clients, worth $15M in non-binding offtake agreements.
Meanwhile, the cocoa-free powder will initially launch as a B2B ingredient too. “Our cocoa powder works just like regular cocoa powder. Key applications are confectionery, baking, and ready-to-drink beverages, like cocoa powder,” says Berber. “It is designed as an extender, similar to our coffee extender, with comparable inclusion rates.”
Both the coffee and chocolate flavours are powered by the same proprietary fermentation technology, according to co-founder and CTO Ding Jie Tan. “We’ve developed this technology in-house, and it has allowed us to accelerate product development, reducing commercialisation costs, as well as continue to create a diverse portfolio of flavours and ingredients to support our industry partners,” he tells Green Queen.
Prefer teams up with Ajinomoto and The Coffee Ferm
Prefer’s products are sold in 75 locations across Singapore, with another 25 set to be added by the end of the year. It has recently commercialised its coffee alternatives through foodservice channels too, via ice cream partnerships with local companies Melvados and Kind Kones.
It is now scaling up pilot production to 500 tonnes annually using toll manufacturers and by licensing IP to food manufacturers, while also deepening R&D into cocoa flavour development and expanding global partnerships with a focus on Asia-Pacific.
While the project with Ajinomoto is “highly confidential”, Berber says the two companies are “working on sustainable coffee beverage innovations aligned with Ajinomoto’s ‘Eat Well, Live Well’ lifestyle”.
The Japanese conglomerate is a market leader in Thailand’s packaged coffee segment, and has signed several partnerships with sustainable food brands globally.
“The Coffee Ferm is licensing our intellectual property to manufacture and distribute Prefer coffee for Australia and New Zealand. They have strong industry connections through Golden Bean,” adds Berber. “Launch timelines are pending regulatory and manufacturing, but we are pushing to get to market as soon as possible.”
Tan notes that Prefer’s processes use non-genetically modified organisms with a proven history of safe use in food applications. “As such, our manufacturing and regulatory requirements are no more complex than those of a conventional bakery or brewery (or even a coffee roastery),” he says.
“Each country or territory we export to or manufacture in will have its own regulations, and this may take anywhere from a few weeks to a few months, depending on the region.”
Despite the global expansion, the startup plans to keep its Singaporean roots. “As Prefer’s mission is to drive climate impact at scale, we’re starting out in Asia, intending to bring our solutions to a global audience,” says Tan. “We continue to keep our headquarters and R&D capabilities in Singapore, leveraging on the community support from Enterprise Singapore and A*STAR.”
‘We see ourselves as an industry leader in five years’
The driving force behind Prefer’s bid to transform the coffee and cocoa industries 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 Berber. “I would not be surprised if commercialisation plans in the US or EU become clear in the next 18 months.”
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.
“In five years, we see Prefer a global leader in flavours and ingredients with a broad portfolio, helping the food industry lower costs and reduce its carbon footprint.”
Source: Green Queen
