Phytolon, an Israel-based developer of natural food colors has secured $14.5 million Series A funding.
The round was led by DSM Venturing, the corporate venture arm of Dutch multinational corporation, Royal DSM. Cibus Fund and Ginkgo Bioworks also joined the round as new investors.
Phytolon uses precision fermentation of yeast to develop its colorants. Its new round of funding will be used to scale up production and commercialize its technology.
The startup hopes to launch its products on the market in 2023, pending regulatory approval. Phytolon will start in the US and European markets, the latter of which has the greatest demand for natural food colors.
Why it matters
The natural food colors industry, valued at $5 billion in 2020, is projected to grow to $6.8 billion by 2025. Increasing consumer awareness and demand for organic foods and clean label products are key drivers for the industry’s growth. Health concerns also play a role: though allergic reactions to food dyes are rare, artificial dyes, such as the Red40, have been found to cause allergic reactions, like face swelling.
Halim Jubran, co-founder and CEO of Phytolon, told AFN that the market has been receptive of natural food colors.
“The grounds are prepared for our technology,” he said. “Fermentation as a tool to replace agriculture for production of natural ingredients is now revolutionizing the food industry.”
How it works
Jubran and his co-founder Tal Zeltzer, both with a background in biotechnology, launched Phytolon to “exploit advanced tools that we have with the modern biotechnology to make our food healthier and to make our environment more sustainable,” Jubran told AFN.
The company leverages licensed technology from the Weizmann Institute of Science, based in Israel, to develop sustainable, natural food-coloring alternatives to the synthetic dyes commonly used in food and beverages. Unlike other natural colorant producers, which derive their products from fruits and vegetables, Phytolon makes red and yellow-based “betalain pigments” by fermenting baker’s yeast.
Phytolon’s technology can producte a wide range of natural colors from yellow to purple for use in alternative meat, dairy, frozen products, baked goods, confectionery and snacks.
The startup’s is exploring its market entry options, either directly through food manufacturers or through food ingredient companies.
What they’re saying
“The investments of DSM Venturing, Cibus Fund and Ginkgo Bioworks open the door for broad penetration of our products in the global food industry,” said Jubran. “We are excited to have new investors who share our vision to create healthy, efficient, and sustainable food systems via biotechnology.”
“I believe this investment round and DSM’s participation in Phytolon will accelerate the commercialization of Phytolon’s proprietary palette of sustainable food colors that will provide important benefits to both food producers and consumers,” added Steve Dubin, chairman of Phytolon’s board of directors.
Existing shareholders Trendlines Group, Arkin Holdings, Millennium Foodtech, Agriline , Stern Tech, and OpenValley founder Yossi Ackerman participated in Phytolon’s Series A round. Trendlines Agrifood Fund offered up foundry services as a form of “in-kind” investment.
The latest funding follow’s a $4.1 million equity round in 2020.