September 16, 2020

By Lynda Kiernan, Global AgInvesting Media

Israel-based Phytolon, a food tech portfolio company of the Trendlines Group, has raised $4.1 million through a round led by Millennium Food-Tech –  a new R&D partnership launched to invest in food tech companies. 

This marks the second investment for Millennium, which committed $1.8 million to the round, and which was joined by EIT Food, a leading European food innovation initiative, Consensus Business Group, The Trendlines Group, Yossi Ackerman, the former president and CEO of Elbit Systems, and the Israel Innovation Authority.

As consumer awareness and engagement with their food supply chains matures, demand for healthier foods has naturally evolved to include a demand for healthier and more transparent additives such as food coloring agents.

High consumer demand and the need to fill a gap for food producers has seen the food coloring category grow at a CAGR of 5.8 percent to reach a value of $2.85 billion in 2019, with natural colors accounting for 69 percent of the market.

Indeed, along with growing consumer demand, ever more stringent regulations regarding the use of synthetic and identical colors in food production is expected to be another key driver of growth for the global natural food colors market, which Meticulous Research expects to see a CAGR of 8.4 percent to reach a value of $3.2 billion by 2027.

However, despite this demand, the use of natural colors in food production has been hampered by the lack of reliable natural alternatives due to expense and quality.

Founded in 2018 by Dr. Halim Jubran, Dr. Tal Zeltzer, and Dr. Guy Polturak, Phytolon’s platform is in position to answer this need through licensed technology born of the Weizmann Institute of Science that leverages a proprietary, fermentation-based process to produce natural, plant-based, and inexpensive food colors.

“Phytolon’s success provides an excellent example of how cutting-edge, basic science sets the stage for novel applications in the industry,” said Professor Asaph Aharoni, a key inventor of Phytolon’s technology from the Weizmann Institute of Science.

“Phytolon’s product is a step forward towards reducing the segment of synthetic chemistry and increasing sustainability of natural resources for the food industry.”

Chanan Schneider, CEO, Millennium Food-Tech added, “For us, technologies that make food more natural and healthier are innovations that change the world of food and beverages.”

“It is clear to us that consumers are looking for products with more natural and healthier ingredients and are even willing to pay a premium for them. Phytolon brings a patented solution, perfect for the food color sector, and has garnered a lot of interest in its technology and products.”

Dr. Jubran, co-founder and CEO, Phytolon noted that the capital from this round will support the company in getting its healthy and sustainable food colors to market, providing a high-quality and cost efficient alternative to the food industry.

“The new round will also promote our collaborations with our potential clients, with whom we have been in communications during the past year and a half,” added Jubran.

In the short time since its founding, Phytolon’s work has been widely recognized, having been a finalist at MassChallenge Israel 2020, AgriVest 2019, Slingshot 2019, and a runner-up in the Calcalist-Tnuva Foodtech 2019 competition.

“We are delighted with the success of Phytolon, CBG has supported and accompanied the company for a long time and is following their impressive progress,” said Vincent Tchenguiz, Consensus Business Group.

”We see the company’s technology as an exceptional platform for significant development and real growth with real value for CBG’s investment portfolio in Israel, which currently stands at about $400 million.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.