By Lynda Kiernan
Scottish biotech startup MiAlgae announced it has closed on £1 million ($1.31 million) in funding from three return investors: Equity Gap, Scottish Investment Bank, Old College Capital, the venture fund of the University of Edinburgh, and new investor Hillhouse Group.
The capital will be used to drive commercialization of its novel microalgae for use by the global aquaculture and pet food sectors.
Founded in 2016 by Douglas Martin while studying biotechnology at the University of Edinburgh, MiAlgae has developed a zero-waste solution by employing the latest advances in science and technology to create a process that recycles waste products from food and beverage production to grow microalgae that is rich in Omega-3.
The process uses an algae strain that naturally lives in the ocean feeding on up-welling nutrients. MiAlgae has been able to recreate this feeding system by using co-products from the whisky distillation industry as feedstock. The resulting algae is high in Omega-3s and antioxidants, and ready to be used as a sustainable fish feed or pet food ingredient.
“MiAlgae has essentially taken a by-product from one industry and turned it into a solution for another industry,” said Andrew Vernon with HIllhouse Group.
“Through the application of biotechnology, MiAlgae is finding solutions to feed the world’s population, and with the global aquaculture industry set to double in size in the next ten years, this is a very promising business indeed.”
One Fish, Two Fish
Rising global populations and increasing wealth – particularly in emerging economies, along with diminishing wild fish numbers have put pressure on the aquaculture industry to fill the gap in supply.
Aquaculture is the fastest growing segment in animal protein production, and was named as one of the Ag Sectors to Watch in 2019 by Philippe de Lapérouse and Mark Zavodnyik of HighQuest Consulting.
“Since 1960, global demand for seafood has increased 3.2 percent annually, outpacing the 1 percent annual growth in the world’s population over the same time period,” noted de Lapérouse.
Predictive modeling by The World Bank estimates that by 2030, 62 percent of food fish will be provided through aquaculture, and from 2030 onward, driven by pressure to fill the gap, aquaculture will dominate supply in the industry, according to the report, Fish to 2030, Prospects for Fisheries and Aquaculture.
This pressure has also filtered down to the aquaculture feed category, which will need to meet the demands of the global aquaculture industry which currently stands at a value of $70 billion and is on pace to double in size by 2030.
All in the Family
MiAlgae’s second targeted market is also experiencing rapid growth amid evolving consumer ethos. Increased humanization of pets by highly engaged consumers is leading purchasing trends in the pet food industry to parallel those in the human food sector. The health consciousness and concern over sustainability that are driving consumers’ choices for themselves and their families are also increasingly driving their food choices for their pets.
The U.S. pet food market was valued at $24.6 billion in 2016, and is anticipated to grow to a value exceeding $30 billion by 2022. U.S. pet owners spend upwards of $63 billion a year (approximately $23.05 billion was spent on food alone in 2015) on their family pets, noted the American Pet Products Association, a number that has increased every single year since the association began collecting data in 1994.
“The global pet food market is worth $100 billion and growing at around 5 percent,” said Fraser Lusty, investment director at Equity Gap. “MiAlgae plans to supply customers in both the pet food market and the aquaculture industry in the next 12 months. This is an exciting business, and one to watch over the next couple of years.”
Fueled for Growth
With market prospects such as these, and fueled with fresh capital, MiAlgae plans to use its latest funding to double the business, add five new employees, and to commission a demonstrator facility in East Lothian over the coming year.
“I am really pleased that with this investment we can turn our attention to growing the business. We plan to target the pet food and aquaculture industries with our sustainable, ocean-friendly, algae-derived omega 3,” said Martin.
“MiAlgae perfectly epitomizes Scotland’s willingness to take the lead on climate-related issues,” added Kerry Sharp, director Scottish Investment Bank.
“By turning the by-products of manufacturing and industrial processes into a valuable resource, they and other pioneering companies like them are completely redefining the concept of waste. We’re delighted to continue supporting MiAlgae and look forward to helping them realize their commercial and environmental ambitions.”
Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.