The firm, which was established in 2016, produces microalgae using co-products from the food and drink industry, including whisky distillation. The algae, said to be high in omega-3 and other nutrients, can be used to sustainably feed fish and create animal food.
Plans are already in place to commercialise other high-value compounds and pigments through expansion of the company’s biotech platform.
The Conduit Impact Fund, managed by Ascension, led the latest funding round, investing £900,000, with new investor SIS Ventures putting forward £350,000.
Having previously invested, Equity Gap, Old College Capital and Scottish Enterprise all committed to additional funding, totalling more than £1m. The investment builds on the £850,000 of grant funding recently secured from Zero Waste Scotland and Scottish Enterprise.
The £2.3m investment will support the company in its growth plans which include the completion of a commercial demonstrator facility near Stirling which will drive MiAlgae’s expanding commercial traction.
Initially the business is focused on the pet food sector with an eye on expansion into the aquaculture sector in the near future. Aquaculture is the largest consumer of fish oil produced globally which is used in fish feed.
The major new investment will also help grow the team at MiAlgae and increase its expertise. Ten new posts, including a head of engineering and commercial director, will be created.
Managing director Douglas Martin said: “It’s incredibly exciting to know that our investors see value in the biotechnology platform we’ve developed to tackle the production of omega-3 oils in a commercially viable way.
“Our process is championing the circular economy and the investment we have secured will be transformational in helping MiAlgae scale quickly both locally and abroad.
“Our commercial demonstrator plant, due to be completed early in 2023, will help us improve food security globally, while our research department continues to drive the development of exciting, commercially viable biotech innovations,” he added.
Hadley Diest, investment manager at the Conduit Impact Fund, said: “MiAlgae’s circular economy approach to producing algae rich in Omega-3 solves key pain points on the supply (Scotch whisky distilleries) and demand (pet food and fish feed producers) sides - to both dispose of Scotch by-products sustainably and increase the supply of sustainably sourced, price-competitive, Omega-3 into the broader market.
“Douglas and his team have worked tirelessly to bring this vision to life and the Conduit Impact Fund is proud to help support MiAlgae in their next stage of commercial growth.”
Rob Halliday, senior investment manager at SIS Ventures, said: “MiAlgae is a great addition to our multi-award winning portfolio of innovative mission driven businesses. We believe in MiAlgae’s mission to become a world leader in biotechnology for good, and, by improving food security and reducing the impact of humanity on the planet through sustainable omega-3 production MiAlgae, will deliver important societal and environmental impact aligned to three of the United Nations sustainable development goals - life below water, good health and wellbeing, and responsible consumption and production.”