July 7, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

DSM Venturing, the corporate venture arm of Royal DSM, has led a $14.5 million Series A funding round for Phytolon, a Trendlines portfolio company developing fermentation-based natural food colors.

Additional participants in the round included Cibus Fund, The Trendlines Agrifood Fund, and Ginkgo Bioworks, which participated via an in-kind investment in the form of Foundry services. 

Other existing shareholders who returned to back Phytolon through this Series A were The Trendlines Group (the largest shareholder in the company), Arkin Holdings, Millennium Foodtech, Agriline (administered by Consensus Business Group), Stern Tech, and OpenValley/Yossi Ackerman.

Pivotal to the success of this funding round was the direction provided by Phytolon’s chairman of its board, Steve Dubin, who has worked with several biotechnology and/or nutrition companies, including as CEO of Martek Biosciences (which was acquired by DSM in 2011); as chairman of Enzymotec; and as senior advisor to DSM (until 2012). 

Currently, the majority of natural food colors are highly dependent on agriculture, being derived from fruits and vegetables. But meeting the ever-growing consumer demand for more natural ingredient lists through the incorporation of food colors derived from fruits and vegetables can be resource-expensive.

The striving for the holy grail of a “clean label” to meet demand  is expected to drive the global food colors market, which currently stands at a value of $3.9 billion, to experience a CAGR of 6 percent to reach a value of $5.42 billion by 2025, finds Market Data Forecast. And being able to achieve this goal through innovation and disruption could be highly advantageous. 

Israel-based Phytolon is a biotech startup addressing the need for healthy, efficient, and – importantly – sustainable, natural food coloring alternatives to synthetic dyes in foods and beverages. 

Using proprietary methodology based on licensed technology from the Weizmann Institute of Science, Phytolon produces betalain pigments through the fermentation of baker’s yeast.

** But wait… What are betalain pigments, you ask? 

Betalains are unique water-soluble nitrogen-rich pigments that give some fruits and vegetables a red-violet (betacyanins), or yellow (betaxanthins) color. They are exclusively found in families of the Caryophyllales order and certain higher order fungi, where they replace anthocyanin pigments (which belong to the phenolic group). 

Through its platform, Phytolon offers a wide range of natural colors from yellow to purple that perform on par in performance and at cost-in-use for multiple food categories including alternative meats, dairy, frozen foods, baked goods, confectionery, and snacks.

“The investments of DSM Venturing, Cibus Fund, and Ginkgo Bioworks open the door for broad penetration of our products in the global food industry,” said Dr. Halim Jubran, co-founder and CEO, Phytolon. “We are excited to have new investors who share our vision to create healthy, efficient, and sustainable food systems via biotechnology.”

Phytolon’s technology has already achieved what the startup refers to as a semi-industrial production scale, and the company is currently working to lay the groundwork for regulatory clearance in the U.S. and Europe.

Dubin concluded, “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.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

*The content put forth by Global AgInvesting News and its parent company HighQuest Partners is intended to be used and must be used for informational purposes only. All information or other material herein is not to be construed as legal, tax, investment, financial, or other advice. Global AgInvesting and HighQuest Partners are not a fiduciary in any manner, and the reader assumes the sole responsibility of evaluating the merits and risks associated with the use of any information or other content on this site.