PLYMOUTH — The biotech startup Algal Scientific Corp. said Tuesday it had closed a $7 million Series B financing round to continue its develpment of algae-based chemicals and technologies to the food and beverage industry.
The investment is being led by Formation 8, a venture capital firm based in Palo Alto, Calif., with additional participation from Evonik Industries, a specialty chemical firm based in Essen, Germany, and Independence Equity Management LLC, an early stage venture capital firm based in Northbrook, Ill. All three firms were returning investors.
The latest round of funding brings the total amount raised by the company to over $10 million.
Algal Scientific was founded in 2009 to develop new agricultural products to solve societal problems — including the massive overuse of antibiotics in the world’s food supply. The company has created Algamune, the world’s first beta glucan commercially produced from algae. Beta glucan can be introduced into the diets of livestock and poultry to naturally support the animals’ immune systems without relying on antibiotics.
“There is no question that antibiotic resistance is a problem that is only going to get worse unless significant changes are made to the way we utilize antibiotics,” said Geoff Horst, CEO at Algal Scientific. “We are thrilled that Formation 8, Evonik, Independence Equity and our other investors have had the foresight to get ahead of this growing issue by showing their support for Algal Scientific’s vision. Their financial and strategic support will help us accelerate our efforts to disrupt the agriculture space in a way that has lasting benefits for both animal and human health.”
Added Jim Kim, founder and managing partner of Formation 8: “Our investment in Algal Scientific is a terrific example of our focus on supporting extraordinary entrepreneurs leveraging new technology platforms to tackle big global problems, in this case the negative consequences associated with current methods of food production. Algal Scientific is a disruptive force with an innovative and scalable agriculture technology solution and clear vision to bring about lasting global health benefits while also improving the quality and efficiency of livestock production.”
Concerns about antibiotic resistance have grown exponentially in recent years, and according to the Center for Disease Control. The number of bacteria resistant to antibiotics has increased in the last decade, with many bacterial infections becoming resistant to the most commonly prescribed antibiotic treatments. Repeated and improper uses of antibiotics are primary causes of the increase in drug-resistant bacteria. An estimated two million people are sickened every year with antibiotic-resistant infections, with at least 23,000 dying as a result.
With this new funding, Algal Scientific plans to dedicate more resources to addressing and overcoming the global overuse of antibiotics, specifically of those used in the food supply. It’s estimated that 80 percent of all antibiotics sold in the United States are used on livestock and poultry, which increases the chances for bacteria in the environment to develop resistance to these critically important drugs.
Algal Scientific has already made significant strides in combating this challenge by creating Algamune. Algamune is produced by growing a selected strain of natural, non-GMO microalgae in controlled, sterile fermentation systems so that it contains high concentrations of beta-1,3-glucan, which has long been known for its ability to naturally support a healthy immune system.
Algal co-founder and CEO Horst has a bachelor of science in oceanography from the University of Michigan, and a master of science in marine biology from California State University, where he researched the effects of climate change on coral reefs. His Ph.D. at Michigan State University, in ecology and evolutionary biology, focused on the nutrient physiology of toxic algal blooms. As an adjunct instructor at MSU, Horst taught courses in environmental sciences, ecology, and marine and freshwater biology. Algal also has leaders with decades of experience in algae, immune health, fermentation, animal health and feed ingredients.
Algal won the inaugural DTE Clean Energy Competition hosted by the University of Michigan and DTE Energy. Since then, the company has gone on to win several other awards and competitions, including the $500,000 Grand Prize in the Accelerate Michigan Innovation Competition. For more information, visit www.algalscientific.com.
More about the funders of this round at www.formation8.com, www.evonik.com/venturing, and www.independence-equity.com.