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Agronomics, the leading listed company in cellular agriculture, is pleased to bring you its quarterly update.
As an investment thesis, we continue to recognise cellular agriculture as the only technology with the potential to decarbonise the protein production system, while meeting the protein needs of the growing global population as it expands to nearly 10 billion around 2050. Our investments continue to focus on two core technologies – cell culture for the production of cultivated meat and materials, and precision fermentation to produce specific animal proteins from microbes. In 2022, we have made a number of investments in companies utilising precision fermentation technologies to produce valuable animal proteins such as dairy, egg or collagen. At full-scale commercialisation, these technologies have the potential to deliver products that compete on a cost basis with the conventionally-derived forms. We continue to focus on investments in major protein categories, with technologies that deliver scalable solutions. Full highlights and investment activity below.
Agronomics will be hosting a Capital Markets Day on Thursday 3rd November, between 2pm-4:30pm. We hope many of you will be able to join us to hear presentations from Agronomics, as well as a selection of our most exciting portfolio companies. The schedule for the event is as follows:
Agronomics Overview
2:00 – Anthony Chow, Co-founder of Agronomics
2:15 – Question time
Precision Fermentation Highlights – dairy, eggs and contract manufacturing for scale-up
2:30 – Jan Pacas, Founder & CEO of All G Foods
2:45 – Mark Warner, Co-founder & CEO of Liberation Labs
3:00 – Maija Itkonen, Co-founder & CEO of Onego Bio
3:15 – Question time
Cultivated Meat and Materials Highlights – bluefin tuna, pork and leather
3:30 – Lou Cooperhouse, Co-founder & CEO of BlueNalu
3:45 – Krijn de Nood, Co-founder & CEO of Meatable
4:00 – Ingvar Helgason, Co-founder & CEO of VitroLabs
4:15 – Question time
Registration for the event, and further details, can be found here.
Highlights
Here, we bring you the highlights from Q3 2022:
- Added 2 new investments to the portfolio (outlined below) taking total portfolio size to 24, covering major categories within cellular agriculture including beef, chicken, pork, fish, crustaceans, leather, palm oil, egg proteins, dairy, coffee, cotton, cocoa and collagen, as well as infrastructure for precision fermentation.
- All G Foods, Australian precision fermentation dairy company, announced it had raised AU$ 25m with completion of its Series A – led by Agronomics with a AU $15 million (approximately £8.7 million) investment.
- Clean Food Group, UK-based cellular agriculture company commercialising palm oil produced via fermentation, announced it had raised £1.65m seed financing – led by Agronomics with a £577,500 investment. In March 2022, Agronomics invested £0.323 million in Clean Food Group’s founder’s round which will now, subject to audit, be carried at a book value of £3.23 million, representing a multiple on invested capital (MOIC) of 10x
- Bond Pet Foods completed its US$ 17.5 million Series A financing, led by ADM Ventures and Cavallo Ventures, with other prominent investors also participating. Agronomics first invested £150k in Bond Pet Foods in September 2019, and subject to audit will now carry this position at a book value of US$ 933k, representing a MOIC of 6.22x
- Portfolio company Onego Bio, a company developing sustainable and animal free egg proteins via precision fermentation, was awarded €4.5M in grant funding from Business Finland
- Onego Bio announced partnership with Perfect Day. Perfect Day is a global leader in precision fermentation for dairy proteins. Both use the Trichoderma organism. Perfect Day have achieved regulatory approval for this organism in the US. Onego will benefit from all of the regulatory work proving this is a food safe organism as well as their expertise in strain engineering, production scale up and commercialisation.
- Meatable B.V., the Dutch cultivated meat company, revealed the first images of its cultivated pork sausage product, created using cultivated meat. The cultivated sausage is the first product to be announced by Meatable, as they approach wide-scale commercialisation, which they expect to occur in 2025.
- Meatable B.V. announced a partnership with the world’s first licensed large scale contract manufacturer for cultivated meat, Esco Aster, based in Singapore. The partnership will facilitate the production of Meatable’s cultivated pork products, which are aiming to initially be launched in selected restaurants in Singapore in 2024, subject to meeting Singaporean regulatory requirements.
Lowlights
It is worthwhile acknowledging there has been a recent change in sentiment towards venture funding markets, and capital markets more broadly, which has seen the pace of capital deployment decline this year, and valuation expectations falling sharply when compared with 2021. Fortunately, Agronomics’ conservative valuation methodology still leads us to believe that there is significant intrinsic value within the portfolio, which has not yet been able to be recognised under the International Financial Reporting Standards (IFRS). Further, with Agronomics having cash as at 30 September 2022 of £39.4 million, the Company is well positioned to capitalise on this market downturn, to identify attractive opportunities in the sector at lower valuations than previously contemplated, as well as continuing to support our portfolio, with the ultimate goal of creating value for our shareholders.
What is cellular agriculture?
Cellular agriculture is the direct production of agricultural products from cells, removing animals from supply chains:
- Cell culture – cultivated meat, seafood and materials such as leather
- Fermentation – inclusive of biomass and precision fermentation – the modification of microbes to produce valuable molecules such as proteins, fats and oils
- Enabling technologies – bioreactor manufacturers, low-cost growth factor methodologies, biodegradable or edible scaffolding for cultivated meat and large-scale contract manufacturers for cell culture and precision fermentation
These technologies aim to provide more sustainable methodologies for the development of such products, reducing greenhouse gas emissions, antibiotic requirements, land use, water use, energy use, improving animal welfare and mitigating climate change.
Investments
In Q3 2022, Agronomics made 2 new investments, seeing the addition of All G Foods and Clean Food Group to the portfolio.
In August, Agronomics announced it had led the Series A financing round of All G Foods with a AU $15 million investment.
All G Foods is an alternative protein, Asia-Pacific company focused on the commercialisation of its precision fermentation platform designed to create sustainable dairy products and dairy proteins. It also owns a rapidly growing plant-based meat business Love BUDS™ which it is commercialising through key channels within Asia-Pacific including the Woolworths group. Expanding off the back of its existing plant-based meat business, All G Foods will focus on markets in the Asia-Pacific region, utilising its existing distribution channels to increase the reach of its animal-free dairy products and become the leading APAC alternative protein company.
Through deep integration within the sector, the Agronomics team identified All G Foods as having formidable dairy precision fermentation expertise – with a notable focus on casein micelle formation, the 3D spherical assembly of casein proteins which is critical for full functionality in dairy products, which to date has been a challenge for other companies in the sector globally.
Photo courtesy of All G Foods
August also saw Agronomics lead the Seed financing round of Clean Food Group with a £0.578 million investment, alongside SEED Innovations Limited. In March 2022, Agronomics invested £0.323 million in Clean Food Group’s Founder’s round, which will now, subject to audit, be carried at a book value of £3.23 million, representing a multiple on invested capital (MOIC) of 10x. Following the close of the Seed round, Agronomics will own an equity stake of 35.03%, with an aggregate value of £3.8 million.
Clean Food Group is a UK-based cellular agriculture company, co-founded in 2021 by CEO Alex Neves and Co-Chairman Ed McDermott, focused on the commercialisation of palm oil by fermentation. Clean Food Group have acquired the intellectual property from the University of Bath for a technology platform that produces a bio-equivalent palm oil alternative using microbial fermentation and has secured a two-year collaboration with the University to scale the technology and bring its palm oil alternative to market. Additionally, the proprietary technology platform also produces natural 2-phenylethanol as a by-product, which is used worldwide as a rose fragrance and flavour and will also be commercialised.
Photo courtesy of Laurie Lapworth, University of Bath
The global palm oil market reached a value of US$ 50.6 billion in 2021 and is expected to reach US$ 65.5 billion by 2027. However, palm oil has been, and continues to be, a major driver of deforestation of some of the world’s most biodiverse forests, destroying the habitat of already endangered species like the orangutan, pygmy elephant and Sumatran rhino. This forest loss coupled with conversion of carbon rich peat soils are generating millions of tonnes of greenhouse gases into the atmosphere and contributing to climate change. There also remains the issues of exploitation of workers and child labour.
Portfolio breakdown
Portfolio breakdown by Net Asset Value (NAV) contribution shown below. Agronomics currently has ~£39.5 million in cash reserves for investments in new and existing opportunities within cellular agriculture in 2022 and looking ahead to 2023.
Agronomics has a global mandate, investing predominantly in US and European companies. The majority of the portfolio is currently at the Series A stage. Agronomics focuses largely on cell culture and precision fermentation technology companies.
Portfolio in the news
BlueNalu
BlueNalu cracks the code to significant profitability in first large-scale facility: BlueNalu announced that it has unlocked the path to significant profitability in its first large-scale facility due, in part, to a series of breakthrough technologies. These technologies are expected to drastically reduce both operating and capital costs for large-scale production, and when combined with the company’s premium product and market focus, will enable a projected 75% gross margin. (05 October 2022)
VitroLabs
VitroLabs appoints Anthony Chow and Martin Avetisyan to its Board of Directors: VitroLabs announced the appointment of two new members to its Board of Directors—Anthony Chow, Co-Founder of Agronomics; and Martin Avetisyan, Chief Growth Officer and member of the Executive Board at FARFETCH. Anthony and Martin join VitroLabs CEO & Co-Founder Ingvar Helgason to form the three-person Board. VitroLabs also recently appointed Lance Kizer, former Co-founder and Chief Science Officer at Cana Technologies, to its executive team as Chief Technology Officer. (05 October 2022)
The EVERY Company
WATCH: Making Vegan Eggs: Bloomberg’s Rosalie Silva and Deena Shanker report on animal-free alternative eggs. The EVERY Company’s Arturo Elizondo features to discuss the process of making vegan eggs and the complexities surrounding the commercialisation of animal-free egg proteins. (12 August 2022)
Fermenting: the future of animal-free meat: The FT’s Dave Lee investigates the future of animal-free meat. The EVERY Company’s Arturo Elizondo outlines the process of making animal-free eggs as well as the investor appetite in San Francisco for alternative-protein sector. (30 August 2022)
Pulp Culture and The Every Company partner to create protein boosted alcohol: Pulp Culture’s latest product, Build, is a protein-boosted alcoholic juice containing The Every’s Company’s tasteless and odourless Every Protein derived via precision fermentation. Build is now available for purchase online, and will expand to retail. (12 October 2022)
Formo
Milking microbes instead of udders, precision fermented dairy is ready to tackle our reliance on cows: Formo is featured in an article on the advancement of precision fermentation technology and its capacity to shift the dairy industry’s away from using cows for dairy. The article notes that Formo is looking to replace a tenth of Europe’s conventional supply by 2030. (13 September 2022)
Geltor
Introducing Polypeptide-121 Future Cream: Youth to the People launched its Polypeptide-121 Future Cream using Geltor biodesigned proteins. The cream is formulated with an innovative, biodesigned vegan collagen peptide called polypeptide-121. (06 July 2022)
Is Bio-Designed Collagen the Next Step in Animal Protein Replacement?: The New York Times features Geltor in its ‘Upstart’ series which covers companies harnessing new science and technology to solve challenges in their industries. The article notes that Geltor believes that an animal farming-free future goes beyond vegan “meat” and that Geltor is bioengineering proteins for luxury skin-care products, shampoo, smoothies and even marshmallows. (02 August 2022)
Discover the Elements of Skin with Geltor’s biodesigned proteins: Geltor’s proprietary fermentation-based platform enables the production of biomimetic human proteins like collagen and elastin without the use of any human or animal inputs, reliably and at scale. HumaColl21 and Elastapure make up two of the Elements of Skin, available only through Geltor. HumaColl21 revolutionised the industry as the first ever biomimetic human collagen for beauty and personal care. Elastapure is Geltor’s newest protein, and the first human biomimetic human elastin for topical use. (31 August 2022)
Solar Foods
Solar Foods want to replace industrial animal farming with a high-tech protein harvest: TechCrunch cover Solar Food’s ambition to bring novel protein to the market in the form of a single-cell protein it’s branding Solein. “Technically it’s like a brewery,” explains CEO and co-founder Dr. Pasi Vainikka in an interview with TechCrunch. “Like fermentation technologies are. It’s not that strange [a process] — there is this one difference, which is the feedstock.” (05 September 2022)
Solar Foods joins the heart of the European Green Deal: European commission selects companies to pioneer the industrial deployment of hydrogen production and utilisation: Solar Foods has been selected to be one of the European Commission’s Important Project of Common European Interest (‘IPCEI’). The hydrogen IPCEIs are about research and innovation, and first industrial deployment of relevant infrastructure in the hydrogen value chain. (22 September 2022)
Power of powder: Solein seeks to shake up food industry: In an interview with CTech, Dr. Pasi Vainikka, CEO of Solar Foods, describes how Solar Foods plan to develop a protein powder, Solein, that is made of 95% air (nitrogen, hydrogen and carbon dioxide). Vanikka also explains that the environmental footprint of Solein is “one-hundredth that of meat protein, and one-tenth that of plant-based protein”.
California Cultured
‘Plant cell culture is now emerging from a very cold winter…’ Cell-cultured chocolate startup California Cultured turns attention to Coffee: California Cultured co-founder and CEO, Alan Perlstein, tells FoodNavigator about the role plant cell culture can play in producing complex plant-based ingredients such as coffee or cocoa. When asked how established plant cell culture is, Perlstein said: “A lot of the work on plant cell culture happened in the early part of this century. But I’d say it’s now emerging from a very cold winter and there are companies using it for flavour and colour production, and some for pharmaceutical production.” (12 August 2022)
Tropic (Formerly Tropic Biosciences)
Tropic Biosciences has rebranded to Tropic, with a revitalised website design containing plenty of information regarding their innovative gene-edited tropical crop varieties.
SuperMeat
Migros and SuperMeat to scale supermarket aisles with cell-based “meat, fat and everything in between”: SuperMeat has inked an agreement with Switzerland’s largest supermarket and meat manufacturer, Migros, to develop European infrastructure to produce, distribute and sell cell-based meat on a broad commercial scale. SuperMeat CEO, Ido Savir, said: “The partnership could lead to Migros’ own branded cultivated meat products. As a B2B company, SuperMeat plans to enable other food companies to introduce their own meat products with SuperMeat’s cultivated meat inside. The possibilities for products that could come from this partnership are endless”. (28 July 2022)
WATCH: SuperMeat introduces lab-grown poultry meat from chicken cells: SuperMeat CEO Ido Savir discusses his plan to produce poultry meat in a laboratory to enhance the global food supply and reduce carbon emissions on ‘The Claman Countdown.’
All G Foods
Leading the whey: the synthetic milk startups shaking up the dairy industry: All G Foods is referenced in a Guardian article on whether lab-grown dairy products have the potential to become major market disruptors. The article highlights that All G Foods is focusing its efforts on whey proteins and notes that the firm’s plant-based meat products are already served in commercial burger chains and sold in some supermarkets. (17 September 2022)
Clean Food Group
Palm oil alternatives: is the cure for our addiction bubbling in a vat?: The Times assesses the devastating environmental impact palm oil has on the tropics and looks at the scientists and businesses that are looking for a solution. The article notes that Clean Food Group is focused on the commercialisation of palm oil by fermentation and is confident about scaling up operations. (22 September 2022)
Wider sector news
Biden Backs Lab-Grown Meat: U.S. President Joe Biden has said that his administration is formally backing biotechnology, which includes new developments such as cultivated meat and precision fermentation. In an executive order, Biden said that the U.S. government is dedicated to investing in biotechnology that will advance the U.S.’s food security. (14 September 2022)
Nestlé explores emerging technologies for animal-free dairy proteins: Nestlé revealed that it is exploring emerging technologies for the development of animal-free dairy protein-based products and has partnered with Perfect Day. (13 September 2022)
The Untapped Climate Opportunity in Alternative Proteins: Blue Horizon has published its latest BCG report, following their 2021 publication: ‘Food for Thought’. BCG’s recent report shows that consumers are finding their favourites among alternative proteins already today, and that healthy, tasty products can unlock another wave of adoption.