Agronomics spearheads Clean Food Group's £1.65m seed financing
( ) has led the seed financing of Clean Food Group with a £577K investment of 577m shares at 10p each. The subscription will be made using Agronomics' own cash and will be joined by SEED Innovations Limited in the round.
Clean Food Group is a cellular agriculture company focused on the commercialisation of palm oil by fermentation. Co-founded by CEO Alex Neves and Co-Chairman Ed McDermott in 2021, its mission is to become a leading independent cultivated food ingredients business. McDermott previously founded EMMAC Life Sciences Limited, a medicinal cannabis business that was scaled and sold to Curaleaf Holdings Limited for US$345m last year.
Clean Food Group recently acquired IP from the University of Bath for a technology that produces a bio-equivalent palm oil alternative using microbial fermentation. Clean Food Group has a 2-year agreement with the University to scale the technology and bring the palm oil alternative to market.
The technology has the added benefit of yielding natural 2-phenylethanol as a byproduct, which is used worldwide as a rose fragrance and flavour. Clean Food Group intends to commercialise this byproduct as well.
Agronomics also participated in Clean Food Group's founder round, when it subscribed for 32.3m shares at 1p each for a total consideration of £323K. Based on the the current round at 10p, this investment will be carried at £3.23m, representing a 10x increase.
Following the close of this seed round, Agronomics will hold a total of 38.075m shares in Clean Food Group with an equity stake of 35.03% and aggregate value of £3.8m. Agronomics will therefore have a right to a board seat, and Jim Mellon, an Agronomics director, will be appointed as non-executive co-Chair.
Alex Neves, CEO of Clean Food Group, commented: "With this funding round now successfully completed, we are not only well capitalised to complete the next stage of our corporate development, but are also well placed to take the next step on the path to bringing our palm oil alternative, an ingredient with the potential to solve substantial environmental, food security, health and working environment challenges within the incumbent palm oil supply chain, to market."
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The global palm oil market was worth US$50.6b in 2021 and is expected to reach US$65.5b by 2027. However, palm oil has been a major driver of deforestation of some of the world's most biodiverse forests. In addition, conversion of carbon-rich peat soils is generating millions of tonnes of greenhouse gases. Palm oil has also been subject to controversy regarding potential health risks, prompting many health-conscious consumers to seek alternatives.
For all of these reasons, there is demand for affordable alternatives to palm oil. Agronomics' investment in Clean Food Group has already grown 10-fold, and more potential for upside exists.
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