South Philly vegan cheesemaker gets a new cheese cave and more thanks to a $1.5 million VC investment

Bandit, a vegan cheesemaker in South Philly, is gearing up for a big expansion after receiving a $1.5 million venture capital investment.

Company founder and CEO Bo Babaki said he hopes to expand production of his cashew-based cheeses, formerly sold under the Conscious Cultures Creamery brand, from 1,000 pounds a week now to 5,000 pounds a week within a year while expanding distribution to more stores in Northern California, Texas, and Illinois in the coming months.

“We’re trying to grow as quickly as possible and do it the right way,” Babaki said in an interview last week. “I’ve experienced a lot of organic growth since the beginning of this, so now it’s going to be cool to see what’s going to happen [ when we] have money to brand things and to do some marketing, pay for some ads.”

Bandit received the $1.5 million investment from Prime Movers Lab, which is based in Jackson Hole, Wyo., and describes itself as investing “in start-ups reinventing energy, transportation, infrastructure, manufacturing, human augmentation, and agriculture.”

“We have been looking for a dairy-alternative investment, and at the end of the day, Bandit just tasted better than anything else we tried,” Prime Movers Lab partner and Bandit board member Gaetano Crupi said in a news release.

Citing data from Future Marketing Insights, Prime Movers said the global vegan cheese market is expected to grow 5.7% in 2022, to $3 billion, and then more than double by 2032, to $7.35 billion.

Other vegan cheesemakers have also attracted venture capital investment recently.

Nuts for Cheese, based in London, Ontario, in June received a $5.35 million investment from Forage Capital Partners, Vegconomist reported. Last August, Miyoko’s Creamery, a widely distributed producer of plant-based cheeses, butter, and other products based in Petaluma, Calif., raised $52 million in venture capital to expand, followed by an additional $7 million in May, according to the Silicon Valley Business Journal.

Bandit, which started in the basement of a South Philly yoga studio, received its investment from Prime Movers at the end of last year, but didn’t announce it until last week, in conjunction with changing the company’s name to Bandit from Conscious Cultures Creamery.

“Younger cheese enthusiasts recognize the tremendous impact that agricultural practices are having on climate change, the environment, and animal welfare,” Babaki said, but the previous name “did not feel as welcoming to the cheese market as a whole.”

In addition to expanding distribution and putting some muscle behind marketing, Bandit is upgrading the equipment used to make cheese in the basement of the Bok Building, at the corner of Ninth and Mifflin Streets.

A new machine, from Sweden, will be used to break down cashews before they are soaked and fermented to make the cheese. “In one day with the new machinery ... we’ll actually be able to do what we were doing in a week” Babaki said.

A new cheese cave — a modified walk-in refrigerator — is also on the way, Babaki said.

Bandit employs eight, and that is not expected to change much. The automation of cashew crushing will allow the same employees to spend more time working in the cave, Babaki said.

Babaki, 40, who grew up in Washington, and spent five years in the San Francisco Bay area before moving to Philadelphia five years ago, started experimenting with vegan cheeses in September 2018, while still working in the restaurant industry.

By March of 2019, he started selling his cheeses, mostly at pop-up markets, including V Marks the Shop, a vegan store at 1515 McKean St. in South Philadelphia.

Sales took off after some favorable coverage from food critics. In August 2019, The Inquirer’s Craig Laban called Babaki’s Bloomy White by far the best vegan cheese he ever tasted.

The New York Times followed in April of 2021 with an article on the booming vegan cheese industry that highlighted Babaki’s Barn Cat bloomy rind cheese. The skeptical critic, Tejal Rao wrote about her Barn Cat experience: “I was unprepared for the pleasingly dank flavors of a soft-ripened goat cheese, for the mildly peppery tang, for the dense, luxurious creaminess.”

After that article , Babaki started getting messages from such major retailers as Trader Joe’s and people who wanted to buy the company. “They had no idea we were just this small little company. It was me, and I had one under-the-table employee at the time,” he said.

When investors learned the business was so small, most investors walked away, saying that they only wanted to buy a company with $5 million in annual sales, said Babaki, who did not disclose Bandit’s current revenue.

When Prime Movers contacted him, he thought he would hear the same thing. But, instead, they loved the story — and the cheese he sent them last summer for an investors retreat in Wyoming.

“When I went to UPS to ship it there, I was joking with the guys, this is like a $1 million package. It’s got to get where it’s going,” Babaki said. “Then it turned out, it was a $1.5 million package.”