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Michroma Closes $6.4 Million Seed Round to Bring Novel Food Coloring to Market
Ingredient biotech startup Michroma is on track to expand and scale fungal food colors platform.
SAN FRANCISCO, February 1, 2023-- Michroma, a leading precision fermentation food ingredient company, today announced it has closed $6.4 million in seed financing. The round will fast-track the company's commercialization of sustainable natural colorants, expand research and development capabilities, and broaden Michroma's ingredient platform. The company removes petroleum - the base ingredient in mainstream colorants - from the food ingredient value chain.
The $6.4m round was led by Supply Change Capital, a food tech VC backed by 301 INC, the corporate venture capital arm of General Mills. New investors include Be8 Ventures, which is backed by Dr. Oetker, a global food company based in over 40 countries; and CJ CheilJedang, a $23 billion Korean conglomerate that is the world's leading supplier of fermentation-based bio-products.
"We see compelling market and consumer potential for Michroma's fungal platform to create next-generation natural ingredients, from colorants to flavors, that are healthier and more sustainable while maximizing production efficiency. We are excited by the speed and skill with which they are building out their capabilities. Even more so, in light of the current disruption of supply chains globally, we believe Michroma is laying the foundation for the sustainable ingredients of the future," said Noramay Cadena, Supply Change Capital's Managing Director and Michroma Board Member.
"We are poised to meet consumer demand for healthier and more sustainable food without petroleum-based ingredients," said Michroma's CEO and Co-founder, Ricky Cassini. "Unlike the current generation of unstable natural options, like betalains, carminic acid, and anthocyanins, Michroma is producing better-performing natural colorants powered by fungi. This next stage of our development will help us industrialize our fungal platform and enable the world's transition to natural colors."
Michroma's novel approach centers on creating fungal biofactories to produce small molecules, like colors, more efficiently. "We are leveraging the power and versatility of filamentous fungi with our synbio platform. By combining a unique fungal chassis strain with precision fermentation, we are capable of producing high-value complex molecules with high yields previously unseen in the biotech industry," said Michroma's CSO and Co-Founder, Dr. Mauricio Braia.
Founded in 2019, Michroma pioneered the movement toward a disruptive advance in the ingredients industry with high-performance colorants made from fungi using precision fermentation. Fueled by the increasing market demand for healthier and more sustainable ingredients, Michroma started by developing a novel red colorant called Red+, which is temperature-resistant and stable across the entire food pH spectrum. These characteristics allow colors to survive processes like pasteurization, cooking, and extrusion, which are among the most intensive processes for natural dyes. The company's product pipeline starts with warm colors, which comprise 90% of the food market, and goes beyond to include other colors and novel flavors that will be sold in combination, allowing for integrated solutions for companies.
The $2.6B food colorants market continues to trend toward natural ingredients. According to a poll, 92% of people are concerned about artificial colors and large food manufacturers (BurgerKing, Nestle, Kraft, Mars, General Mills, etc.) are transitioning away from artificial colors to meet health-conscious consumers' demand for natural ingredient alternatives. Leading research underscores the detrimental effects of artificial colorant consumption, with the Office of Environmental Health Hazard Assessment (OEHHA) concluding in 2021 that artificial food dyes impact neurobehavior in some children. More recently the U.S. Food and Drug Administration (FDA) received a petition from The Center for Science in the Public Interest and 23 other organizations and prominent scientists to ban the use of Red No. 3 colorant in food.
New investors in Michroma include FEN Ventures, Boro Capital, The Mills Fabrica, Portfolia's Food & Ag Tech Fund, New Luna Ventures, Siddhi Capital, Groundswell Ventures, and HackCapital; and Angels investors Allen Miner, Jun Ueki and Steve Zurcher from the Keiretsu Japan Forum, Guillermo Rosental, Franco Goytia, Pablo Pla and Mat Travizano. Existing investors participating in the round are SOSV's IndieBio and GRIDX.
Following prototyping with some of the world's largest food companies, Michroma is negotiating agreements for Red+ with ingredients suppliers for global distribution and will submit color additive petitions to the FDA and EFSA as the company continues its path to scale.
Next-gen ingredients made by fungi — Michroma is a foodtech startup revolutionizing the way ingredients are produced by developing fungal-based biofactories to produce natural ingredients in a sustainable, scalable, and cost-effective way. Produced using synbio and precision fermentation, Michroma's first product is a high-performance natural red colorant well suited for all diets and food applications with supreme pH and thermal stability that had been selected as the "Most Innovative Ingredient for Food or Beverage 2020" by Fi Global. By leveraging the power of our fungal biofactories, Michroma is producing additional high-value-added ingredients such as flavors and fragrances in a sustainable and cost-efficient way to replace petroleum-based ingredients, which are harmful to humans and the planet's health. For more information, please visit www.michroma.co
About Supply Change Capital
Supply Change Capital invests in the future of food. With a lens for culture and climate, they focus on early stage technology companies across the supply chain that are responding to the seismic shift in the $6 trillion food industry. Their portfolio of 13 companies spans regenerative agriculture, alternative proteins, ingredient technology, food safety, and culture-first brands. Founding General Partners Noramay Cadena and Shayna Harris met at MIT Sloan in 2009, each bring over 20 years of operational experience in public and private markets, and have over 75 investments between them. They support founders post-investment via their signature Supercharge III program which helps elevate individual and organizational awareness for more effective leadership in fast-growing organizations. Learn more at www.supplychange.fund, and on Twitter (@supplychangecap) and Instagram (@supplychangecapital).