LONDON: Agronomics, the leading listed company focused on the field of cellular agriculture, announced it has led Clean Food Group Limited’s seed financing with a £577,500 investment, subscribing for 5,775,000 Ordinary Shares at 10 pence per share.
Clean Food Group is a UK-based cellular agriculture company focused on the commercialisation of palm oil by fermentation. The Subscription will be made using cash from the Company’s own resources. Also joining the round is AIM traded SEED Innovations Limited (of which Jim Mellon, executive director of Agronomics, has a 6.95% holding).
Clean Food Group was co-founded by CEO Alex Neves and Co-Chairman Ed McDermott in 2021, with the goal of becoming a leading independent UK cultivated food ingredients business. Ed McDermott founded EMMAC Life Sciences Limited, a European medicinal cannabis business which was scaled and sold to Curaleaf Holdings Limited (CuraLeaf) for US$ 345 million in April 2021. Alex Neves was Head of EMMAC’s Consumer Division and played a key role in the company’s success.
In March 2022, Agronomics subscribed for 32,300,000 Ordinary Shares at 1p per share in Clean Food Group’s founder’s round for a total consideration of £0.323 million which will, subject to audit and based on the price per share of the latest Subscription, be carried at £3.23 million, representing a multiple on invested capital of 10. Following the close of the seed financing, the Company will hold a total of 38,075,000 ordinary shares with an equity stake of 35.03% and an aggregate value of £3,807,500. Agronomics will have the right to a board seat of Clean Food Group and Jim Mellon, an Agronomics’ director, will be appointed as non-executive Co-Chairman.
Clean Food Group recently 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.
The technology has been developed over the last eight years by Professor Chris Chuck and his team at the University of Bath. Professor Chris Chuck joined Clean Food Group as a technical advisor and leads a team of scientists at a dedicated Clean Food Group laboratory and Pilot Plant at the University of Bath.
Clean Food Group is currently identifying partners to work with and intends to submit a novel foods dossier for market approval of its palm oil alternative product to the European Food Standards Agency and UK Food Standards Agency in 2022.
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.
Jim Mellon, executive director of Agronomics commented: “We are thrilled to be supporting Clean Food Group and broadening our portfolio into sustainable bio-equivalent palm oil. This is an important and exciting development, and this latest investment will help Clean Food Group to achieve R&D milestones and prepare regulatory dossiers for approval. The technology has huge scale potential and we look forward to being part of the company’s next stage of growth.”
Alex Neves, co-founder and CEO of Clean Food Group added: “We are pleased to have seen such significant demand for our seed financing round and are particularly excited to be working with Agronomics, widely recognised as a pioneer of the cellular agriculture investment community, as our cornerstone investor. We are committed to establishing ourselves as a leading UK cultivated food ingredients business, starting with the commercialisation of our bio-equivalent palm oil alternative, a product that has already received significant market interest. 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.”