- Phytolon, which makes natural food colors through fermentation, raised $14.5 million in a Series A funding round. The investment was led by DSM Venturing, and also included Ginkgo Bioworks, Cibus Fund and The Trendlines Agrifood Fund. Several previous investors also participated.
- The Israel-based company said its fermentation technology, which currently operates at semi-industrial scale, will use the investment to expand its natural colors for use in a range of products from food to cosmetics as it awaits regulatory approval in both the U.S. and Europe.
- Both the funds and the backing of biotech giants DSM and Ginkgo will help Phytolon scale its products as it looks to secure a larger footprint in the natural colors space.
Natural colors are an important component of the food space. While wider adoption by CPGs has taken longer than many anticipated, consumer demand for clean label items is still widely felt. Nearly two-thirds of adults said ingredients in a food or beverage item have at least a moderate influence over their purchases, according to a 2021 survey from the International Food Information Council.
Efforts to create pigments with fewer chemicals continue to flourish, driven by companies innovating in the space.
GNT Group has continued to expand its plant-based Exberry lineup — made using fruit, vegetables and edible plants — to include more colors, including green shades made from spirulina algae and turmeric. Spirulina is also the driving force behind Israeli startup Gavan, which developed a natural blue coloring that it plans to begin commercial production on in early 2023.
Phytolon, founded in 2018, has raised $20.1 million to date according to Crunchbase. Its production process makes its natural colors unique. Its portfolio of natural colors — featuring oranges, yellows, purples and pinks — are developed by producing betalain pigments through precision fermentation. Betalains, common in natural coloring, are found primarily in plants like red beetroots and prickly pears.
This process can allow large amounts of natural colors to be produced in a quicker and less costly fashion, compared to extracting colors from raw materials. Its technology is licensed through the Weizmann Institute of Science.
Ginkgo Bioworks’ participation in this round comes through in-kind services to use its foundry platform, which helps companies create organisms that best serve their needs for product development. The biotech company announced its partnership with Phytolon to help the company scale and gather more connections in the ingredients space earlier this year.
Steve Dubin, the head of Phytolon’s board of directors, has a history with DSM. For nearly two decades he was the CEO of Martek Biosciences, which DSM acquired in 2011. He also previously worked as a senior advisor for DSM Nutritional Products. His experience working with biotech companies helped to facilitate the funding round, Phytolon said in its press release.
“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,” Dubin said.
Royal DSM’s interest in the company comes a month after it announced its merger with Firmenich worth $21 billion. DSM said in a press release that its new food and beverage ingredients arm is focused on natural, clean-label and sustainable products — three attributes of Phytolon’s line. DSM can use Phytolon to help grow this new division, while assisting Phytolon in reaching CPGs and distributors through its existing network.