REG - Agronomics Limited - CFG completes £2.3 Million Pre-Series A Financing

AgronomicsAnnouncement

14/08/2023 07:00

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RNS Number : 1428J  Agronomics Limited  14 August 2023

14 August 2023

Agronomics Limited

("Agronomics" or the "Company")

Clean Food Group Announces Successful £2.3 Million Pre-Series A Financing
Round with Strategic Investors

Agronomics (ANIC:LSE), the leading listed company focused on the field of
cellular agriculture, is pleased to announce that the Company has invested
£0.7 million in fermentation-derived palm oil company Clean Food Group
Limited ("CFG"), as part of their £2.3 million Pre Series A funding round,
subscribing for 4,249,700 ordinary shares (the "Subscription"). Notable
co-investors include industrial food specialists Doehler Group and Alianza
Team. The investment was made using cash from the Company's own resources.

Jim Mellon, Executive Director of Agronomics and Co-Chairman of CFG also
participated in the funding round with a £50,000 investment on the same
terms. AIM traded SEED Innovations Limited, of which Jim Mellon has a 6.95%
holding, also invested in the round on identical terms.

Agronomics previously invested £900,500 in CFG in June 2022. In total,
Agronomics will now hold 30.31% of the equity capital on a fully diluted
basis. Subject to audit, Agronomics will carry this position in its accounts
at a book value of £6.97 million, including an unrealised gain on cost of
£5.37 million, an IRR of 385% and a MOIC of 3.92x. The holding in CFG will
represent approximately 4.33% of the last published Net Asset Value of the
Company (30.06.23), including estimated post-balance sheet date adjustments.

●    CFG produces palm oil using a non-GMO microorganism which is already
being used on an industrial scale in the wine industry meaning that the
regulatory pathway in the UK and EU is anticipated to be less stringent.

●    Capital raised from this pre-series round will enable CFG to
accelerate the scale-up of its technology platform, ahead of the planned
completion of its Series A funding next year to further develop its technology
for production at a commercial scale, with the funds supporting the
construction of a new manufacturing facility in the UK.

Jim Mellon, Executive Director of Agronomics and Co-Chairman of CFG,
commented:

"Agronomics' portfolio speaks to the breadth of disruption emerging from
biomanufacturing on conventional agriculture and beyond. This fundraise marks
an important milestone for Clean Food Group in the mission to drive
transformative changes across the food industry by providing an alternative to
palm oil in food and cosmetic production. This funding takes CFG a step closer
to commercialisation as we continue to unlock the potential for a future where
our food choices will be more sustainable."

Since this Subscription is considered a Substantial Transaction under AIM Rule
12, this announcement requires certain disclosures under Schedule Four. CFG is
an early-stage company with no revenues with operating costs of approximately
£0.1 million per month, and total assets as at 31 December 2022 of £1.6
million, including cash or near cash of £1.3 million with no material
liabilities.

The full announcement is set out below without any material changes:

UK food-tech business Clean Food Group announces additional £2.3m funding to
scale operations in advance of Series A

£10m of funding to date to develop Company's sustainable oils and fats
technology

Industrial giants Doehler Group and Alianza Team invest and confirm strategic
collaborations

London, 14 August 2023: Pioneering UK-based biotech business Clean Food Group
has announced a further £2.3 million in funding to accelerate the
commercialisation of its sustainable oils and fats technology. International
investment has come from industrial food specialists Doehler Group and Alianza
Team as the global food industry looks to invest in healthier and more
sustainable food choices for future generations. Agronomics, the leading
listed investment company focussed on Cellular Agriculture, and SEED
Innovations Ltd, the AIM-listed fund focused on investments in global health
opportunities, have also shown their continued support and participated in the
latest funding round.

Capital raised from this funding will enable Clean Food Group to accelerate
the scale-up of its technology platform while advancing critical regulatory
and commercial pathways. Clean Food Group expects to complete a Series A
funding in 2024, by which time the business will have validated the technology
at a commercial scale and have a clear line of sight to near term revenue
generation. The business will raise funds at Series A to support the build out
of a commercial scale manufacturing facility.

In addition to the collaboration agreement with Alianza Team, announced by the
Company on 8 August 2023, Clean Food Group also recently signed a services
agreement with Doehler Group, designed to rapidly scale its fermentation
process to a commercial level, and enable the manufacture of product batches
required for regulatory approval for Cosmetics and Food applications.  The
scale-up process with Doehler is now well advanced, with a successful
fermentation run at 1,000 litres recently completed; the manufacture of
product batches for the regulatory approvals will be completed later this
year.

Additionally, in 2023, Clean Food Group strengthened its Operational team with
the hires of Dr. James Mercer, Head of Manufacturing and Scale-up, and Andrea
Cattaruzza as Head of Product. James will be responsible for the scale-up of
the Company's technology and brings over 25 years of experience in industrial
fermentation and scale-up of alternative proteins, having previously held
senior operational roles at Quorn, Croda, and DuPont, amongst others. Andrea
brings 30 years of experience from Mars Global Chocolate, most recently as
Director of Science. Andrea will drive Clean Food Group's product strategy,
developing high performance, sustainable ingredients for commercial partners.

Clean Food Group Co-founder and CEO Alex Neves says, "We are delighted with
the rapid progress the business has made in the past year. The successful
conclusion of this current funding round validates the important strides our
business is taking in solving critical sustainability and supply chain
challenges facing our food and cosmetic manufacturer customers. We are now in
a great position to validate our technology at a commercial scale, advance our
regulatory pathways and develop our growing list of commercial partners in
advance of our Series A next year".

Clean Food Group's technology platform is the result of eight years of
pioneering research led by Professor Chris Chuck, Technical Lead at Clean Food
Group. The proprietary technology platform uses proven, scalable yeast strains
and fermentation technology and uses food waste as its food source to deliver
sustainable alternatives to traditional oil and fat ingredients.

About Clean Food Group

Clean Food Group is a UK-based food-tech business delivering sustainable oils
and fats solutions to the world's food and cosmetics manufacturers, with the
mission to deliver scalable, healthier, competitively priced ingredients that
have a positive impact on the economic, environmental, and social health of
the planet.

Clean Food Group is founded by a team with key experience in growing bio-tech,
food industry and retail businesses supported by established venture capital
and family office investors with a track record supporting fast-growth
start-up companies in highly regulated industries. Clean Food Group's
proprietary technology platform has been developed as a result of 8 years of
pioneering research by Professor Chris Chuck, technical lead at Clean Food
Group, and the University of Bath.

About Agronomics

Agronomics (https://agronomics.im/) is the leading listed venture capital firm
with a focus on cellular agriculture. The Company has established a portfolio
of over 20 companies at the Pre-Seed to Series C stage in this rapidly
advancing sector. It seeks to secure minority stakes in companies owning
technologies with defensible intellectual property that offer new ways of
producing food and materials with a focus on products historically derived
from animals. These technologies are driving a major disruption in
agriculture, offering solutions to improve sustainability, as well as
addressing human health, animal welfare and environmental damage. This
disruption will decouple supply chains from the environment and animals, as
well as being fundamental to feeding the world's expanding population.

About Cellular Agriculture

 

Cellular Agriculture is the production of agriculture products directly from
cells, as opposed to raising an animal for slaughter or growing crops. This
encompasses cell culture to produce cultivated meat and materials, and
fermentation processes that harness a combination of molecular biology,
synthetic biology, tissue engineering and biotechnology to massively simplify
production methods in a sustainable manner.

 

Over the coming decades, the source of the world's food supply traditionally
derived from conventional agriculture is going to change dramatically. We have
already witnessed the first wave of this shift with the consumer adoption of
plant-based alternative proteins but today, we are on the cusp of an even
bigger wave of change. This is being facilitated by advances in cellular
agriculture. This change is necessary, given scientists' claims that if we
maintain existing animal protein consumption patterns, then we will not meet
the Paris Agreement's goal of limiting warming to 1.5℃.

 

AT Kearney, a global consultancy firm, projects that cultivated meat's market
share will reach 35% by 2040. This combined with the Good Food Institute's
estimate that a US $1.8 trillion investment will be required in order to
produce just 10% of the world's protein using this technology, means that we
are on the cusp of a multi-decade flow of capital to build out manufacturing
facilities. Funding in the field of cellular agriculture is accelerating,
however, still, less than US$ 5 billion has been invested worldwide since the
industry's inception in 2016.

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK Domestic
Law by virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement, this inside information is now considered to
be in the public domain.

For further information please contact:

 Agronomics           Beaumont              Canaccord Genuity Limited       Cenkos                Peterhouse Capital    SEC Newgate

 Limited              Cornish Limited                                       Securities Plc        Limited
 The Company          Nomad                 Joint Broker                    Joint Broker          Joint Broker          Public Relations
 Richard Reed         Roland Cornish        Andrew Potts                    Giles Balleny         Lucy Williams         Bob Huxford

 Denham Eke           James Biddle          Harry Rees                      Michael Johnson       Charles Goodfellow    George Esmond

                                            Alex Aylen (Head of Equities)                                               Anthony Hughes

                                                                                                                        Alice Cho
 +44 (0) 1624 639396  +44 (0) 207 628 3396  +44 (0) 207 523 8000            +44 (0) 207 397 8900  +44 (0) 207 469 0936  agronomics@secnewgate.co.uk

 info@agronomics.im

 

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