Arborea raises EUR3.6m in seed round led by BGF
Arborea – which is industrialising photosynthesis to expand the world’s food supply – has completed a funding round led by BGF, alongside Rubio Impact Venturesand Volta Circle.
Arborea is a technology business that has developed a breakthrough cultivation platform for photosynthetic microorganisms for use as food ingredients and proteins. It was founded by CEO Julian Melchiorri in 2015 following his research at Imperial College London.
Global food security is an increasingly important problem driven by population growth and climate change, exacerbated by slowing crop yield improvements and dwindling availability of new agricultural land. Traditional agricultural practices will not be sufficient to adequately feed the global population by mid-century and so the need for new, land, water and energy efficient agricultural technologies is becoming increasingly urgent.
Photosynthetic microorganisms are grown using Arborea’s Biosolar Leaf (BSL) technology, which provides a more productive and cost-effective method for industrial-scale cultivation than existing systems. The technology works by mimicking the mechanisms of a leaf to efficiently maintain the optimal growth conditions with minimal energy input. Furthermore, it is uniquely placed to separate CO2from most exhaust gasses at atmospheric pressure and at low concentrations.
The EUR3.6 million funding round will support the business to scale its BSL technology at a demo facility in Portugal, which will be used to demonstrate the company’s ability to cultivate commercial-grade high-value functional ingredients and proteins used in food and beverage (F&B) and nutraceutical applications.
Julian Melchiorri, CEO of Arborea, says: “We believe that photosynthetic microorganisms will be a key choice for the production of food ingredients and proteins due to their high productivity, versatility and low environmental impact. Arborea has developed a technology that re-invents how these microorganisms are grown, solving the critical bottlenecks of legacy technologies to finally unlock the untapped value of this vast and highly diverse microbiological pool for the good of our society and planet. As a result of this funding, after developing the technology over the last six years and testing it at our pilot site in London, the team are now ready to progress to a much larger operational demo facility, which will be used to scale the technology and support the conversion of commercial interest from tier 1 F&B players.”
Rowan Bird, investor at BGF, says: “Given the attention on the alternative proteins sector Arborea stands out due to an attractive combination of the early validation of its technology, the encouraging status of discussions with potential partners and customers, and the potential for the business to scale. Arborea represents an exciting opportunity for BGF to invest in an exciting new technology platform that will help address one of the world’s most important systemic issues (food security) while also massively reducing the impact on the environment of our protein supply chain.”
Tijl Hoefnagels, Food & Ag Tech Venture Partner at Rubio Impact Ventures, says:" We believe that microalgae have the potential to become one of the most sustainable sources of foods on our planet. Arborea has devised an innovative and elegant solution that leverages photosynthesis to convert plentiful and surplus inputs like CO2into lipids, proteins and other food ingredients. We are proud to support their ambitions to bring algae production with a very low CO2footprint to scale."
Catia Cesari, Managing Partner at Volta Circle, says: "Volta Circle is excited to partner with Julian Melchiorri, a purpose-driven founder who is fully aligned with our vision of driving circular and regenerative systems at scale. We believe Arborea’s breakthrough technology has the potential to disrupt our global food system at large, with future applications across a broad array of industries. We look forward to continuing to support him and the rest of the team in their mission to make healthy and sustainable food accessible to everyone."
Photosynthetic microorganisms exhibit extraordinary biological diversity and have wide range of food & beverage applications, such as pigments, nutritional ingredients, functional ingredients, proteins and fatty-acids. Arborea will initially target F&B and nutraceutical applications. The global nutraceutical ingredients market is valued at EUR127 Billion in 2020 and is forecast to grow to EUR190 Billion by 2025. The current animal and plant-based protein ingredients market was valued at EUR141 Billion in 2019 and is forecast to grow to EUR205 billion by the end of 2025.
Demand for microalgae derived products in these segments will be supported by a conscious shift towards veganism, vegetarianism and flexitarianism as consumers become increasingly aware of the environmental and health benefits of reducing meat consumption.
Microalgae has a distinct advantage over other sources of plant-based ingredients due to being naturally rich in protein, functional compounds, antioxidants, vitamins, minerals and nutritional fats such as omega-3. As a result, microalgae are increasingly being considered as part of an alternative ingredients strategy.
A significant element of the UK’s economic recovery is the imperative to build a green recovery, and BGF is determined to play its part in this. BGF has already invested GBP225 million in the field of clean growth, and efforts are ongoing to ramp up the level and depth of BGF’s work in this area.
Advisers to the deal include: BGF, Rubio Impact Ventures – Ashfords LLP; Volta Circle Ltd – Benvalor; and Arborea - Covington LLP.