Commercialization push: Microphyt raises portfolio boosting US$32m for microalgae nutritionals and cosmetics

12 Jul 2019 --- In a bid to bring microalgae-based natural solutions for nutrition and wellbeing to market, French company Microphyt has raised €28.5 million (US$32 million) to further develop its portfolio. The funds will allow Microphyt to commercialize its range of natural products for nutrition and personal care and to build its production capacity and proprietary microalgae culture technology, as well as increasing production capacity of the company’s industrial platform.

Microphyt has also started the development of new products that contribute to the wellbeing of the elderly, preventing certain metabolic disorders, facilitating an active lifestyle and protecting the skin from various stresses. 

“For several years now, Microphyt has been actively committed to unlocking the full potential of microalgae’s diversity through our technology platform. With this funding, we will speed up the development and supply of novel natural products that solve the key challenges of nutrition and welbeing,” says Vincent Usache, CEO of Microphyt. 

A portfolio of 10 active nutritional ingredients and 20 active and functional cosmetic ingredients is being developed. To achieve this, Microphyt will strengthen its team and significantly increase its ingredient production capacity over the next 18 months.

In nutrition and wellbeing, consumer demand for natural, effective, safe and su Microphyt will commercialize its range of natural products for nutrition and wellbeing.stainably produced solutions is booming. The world market for ingredients for these products represents more than US$70 billion, with a share of natural ingredients – US$5 billion – showing the strongest growth, according to the company. 

Among the natural ingredients, microalgae is suited to meet consumer expectations due to its natural diversity, offering a richness of molecules that can be produced in a close-controlled and sustainable way. Earlier this week, Veramis, a joint venture of Royal DSM and German chemicals corporation Evonik, officially opened a US$200 million manufacturing facility located in Nebraska, US, for the commercial production of omega 3 fatty acids from natural marine algae. 

Proprietary production technology
Since 2009, Microphyt has developed proprietary production technology that makes it possible to access this diversity while guaranteeing a high level of control and standardization. Cultivating algae encompasses a number of technical steps from harvesting, processing and concentration, but this patented process developed in-house reportedly solves the common drawbacks of microalgae production. 

Production involves 5,000-liter tubular photobioreactors, which offer both high differentiation potential (access to a new diversity of species) and the ability to supply natural active ingredients in an industrial and standardized way. This technology, operated within an industrial production platform, has already made it possible to establish several commercial partnerships with key players in the sector, the company explains.

“Microphyt’s innovations are also based on an innovative industrial project,” explains Jean Philippe Richard, Investment Director of the SPI Fund of Bpifrance. “We share this ambition to develop a leading industrial production site in France and to create a European leader with a global vocation. The site will offer multi-product production with high added value while implementing environmentally-friendly processes.

This investment was co-led by Sofinnova Partners and BPI France via the SPI fund (“Sociétés de projets industriels”) managed as part of the “Programme d’investissements d’avenir”, together with IXO-Private Equity and Sofilaro. The existing investors, Supernova Invest, Demeter Partners and Irdi Soridec, note that they “renew their confidence” in the company by participating in this new round. The funds will be used to accelerate the development of the product portfolio, expand sales network globally, as well as to increase production capacity of Microphyt’s industrial platform.

Investing in innovation
Increasingly, investors on the hunt for higher returns are turning to venture capital, which engages with start-ups and SMEs. Innova Market Insights pegged “Small Player Mindset” as its number nine top trend for the year, reflecting an industry where new entrants are shaking up the norm and taking on classic FMCG giants. 

A 2018 Innova Market Insights trends survey found that two in five US and UK consumers prefer small brands “because they are more dedicated to their products and have a personal story.” This is on trend as a 20 percent growth has been reported in food and beverage launches with a social-ethical claim (Global, 2017 vs. 2016).

Last week, life sciences financer Seventure Partners launched Sport & Performance Capital, a new fund dedicated to supporting innovation in the sport and wellness industries. With a final target of €80 million, the venture fund will invest in start-up companies and growing SMEs. 

By Laxmi Haigh