May 10, 2019

Singapore-based foodtech startup Nutrition Innovation (NI) has raised $5 million in Series A funding. The round, which puts the company’s valuation at $40 million, was led by VisVires New Protein, and included Enerfo Group, a leading global commodity trading company.

Through traditional processing, sugar is a highly-refined product that is stripped of its naturally occurring antioxidants and is high on the glycemic index. Meanwhile, sugar replacers can be expensive to produce and lack the functional properties of natural sugar, which can limit their application in many foods and beverages.

Founded in 2017, NI is the developer of Nucane. By using a proprietary process using infrared scanning, NI is able to analyze sugar being delivered to a mill, and applying its algorithms, the company is able to tell a mill how to make changes to its refining process. These changes result in Nucane – a range of healthier, low-glycemic sugars that retain their calcium, magnesium, and potassium content that can be produced at an industrial scale at a competitive cost to traditionally refined sugar.  

Now, at only two years old, NI is planning on using the capital gained through this round to support its expansion into the U.S. market.

“We have prioritized inventing a technology that could rapidly help the world’s brand’s meet this obesity and health challenge,” said Matthew Godfrey, CEO of NI. “Our innovative pipeline of products, including our next-generation technology, Nucane™ Life, a new natural sugar carbohydrate, can help food brands achieve sugar reduction of up to 70 percent while integrating a range of substrates for additional health benefits such a protein and fibre. We believe it is this type of innovation that will be of great benefit to both brands and consumers in the U.S. market.”

The Ides of Sugar

Driven by the trend toward a more healthy lifestyle and diet, consumers have recently targeted sugar as the next ingredient to reduce or eliminate from their food choices. A poll conducted on January 15, 2016 by Reuters/Ipsos found that 58 percent of adults surveyed responded that they attempted to reduce the sugar content in their diet within the past 30 days – reflecting a higher percentage compared to the percent of consumers trying to reduce calories, or fat, salt, cholesterol, or carbohydrates.

“Nutrition Innovation purpose is to make the world a healthier place by creating natural, scalable, efficient and effective sugar reduction and replacement solutions for manufacturers everywhere,” said Dr. David Kannar, founder and chairman of NI. “This is of vital importance as the world is experiencing an obesity and diabetes epidemic which is costing both lives and trillions of dollars. In America alone, there are over 100 million people who may have “pre-diabetes” and without significant changes in diet, lifestyle or innovation as much as 30 percent of them may go on to have Type 2 Diabetes*.”

The drive to cut sugar has also extended beyond the consumer into the regulatory sphere – demonstrating that the reduction of sugar is being addressed as more than a consumer fad, but rather as a health issue that needs to be addressed for the long-term.

In January 2016 the U.S. government advised that Americans should limit the amount of added sugar in their diet to less than 10 percent of their total caloric intake – marking the first recommendation of a direct limitation by the government. And by July 2018, all food companies will be required to note amounts of added sugars on their labels.

These trends are pointing toward the nascent investment opportunity in sugar reduction technologies, resulting in the announcement of larger and follow-on funding rounds.

The Sweet Spot

An Israeli startup making significant headway in sugar reduction technology is DouxMatok.

GAI News first brought you news of DouxMatok in May 2015, when the company announced it was seeking $4 million in funding, and looking to partner with investors or players in the sugar industry interested in taking their technology to market. This was followed by the startup’s successful raising of $8.1 million in September 2017 led by Israel’s largest venture capital fund, Pitango, and including existing shareholders, Gil Horsky, and FoodLab Capital.

DouxMatok’s technology coats each sugar molecule onto organic ‘carriers’ using a natural mineral that transports each sugar molecule to a person’s taste receptors, significantly reducing the amount of sugar needed to gain the same taste profile.

“DouxMatok has the potential to completely revolutionize the food industry across multiple categories and ingredients,” Eran Baniel, co-founder and CEO, told GAI News in an interview last year.

“Many ingredients that consumers love the taste of are not the healthiest in large quantities (such as salt) or they are expensive to produce (such as vanilla). The targeted flavor delivery system we’ve created can be utilized for many different ingredients and as we expand and scale up, we plan to adapt our technology to these different ingredients.”

Another startup making headway in sugar reduction is Colorado-based MycoTechnology which raised a $35 million Series B in September 2017.

Founded in 2013 Dr. Brooks Kelly, Jim Langan, Peter Lubar, and Alan Hahn, MycoTechnology has pioneered the development of a variety of new food processing systems using mushroom roots (mycelium), including the critical application of removing the bitter aftertaste of stevia – something that has been a challenge to food companies in their quest to cut sugar content.

-Lynda Kiernan