Michroma, a startup that creates food ingredients with fungi, just closed a $6 million seed round to bring more sustainability into the food chain — through colored dye.
Why it matters: Global sales of clean label food products are estimated to be around $38.8 billion last year, and are projected to reach around $64 billion in 2028, according to market research firm Market Data Forecast.
How it works: Using precision fermentation, Michroma has developed a novel red colorant, dubbed Red+, that’s both temperature resistant and relatively stable across the food pH spectrum.
- This means the coloring could survive processes such as pasteurization, cooking and extrusion.
- Michroma uses synthetic biology techniques like CRISPR to edit the fungi and create molecules in submerged fermentation.
- Fermentation is more scalable because it can be produced in a matter of days and the ingredients can be used in low dosage in the final application, bringing the costs down, CEO Ricky Cassini tells Axios.
By the numbers: Nearly two-thirds of U.S. adults say that ingredients matter in their food or beverage buying decisions, according to a 2021 survey by the nonprofit International Food Information Council.
- Around 64% of respondents said they’ll try foods made with clean ingredients.
Driving the news: Founded in 2019, Michroma raised $6.4 million in seed financing this month, led by Supply Change Capital, a food tech VC backed by General Mills’ corporate venture fund, 301 Inc.
- Be8 Ventures and Korean conglomerate CJ CheilJedang participated.
What they’re saying: “There is huge consumer pressure on synthetic dyes, so companies are switching to natural dyes,” Cassini says.
- Many dyes are derived from synthetic chemistry and can be petroleum-based, he says.
- The natural dyes tend to be made from vegetables or insects that can either fade away when cooked, change the properties such as the flavor, or aren’t friendly with certain diets, like vegan, halal or kosher.
What’s next: Fresh funds will go toward R&D, commercialization, and doubling its team so that the company can expand its portfolio of ingredients.
- Michroma, which is currently working on color additive petitions to the FDA, hopes to get regulatory approval from U.S. regulators in the next two years. It has also started the regulatory process in the E.U.
- The company, which has offices in Argentina and San Francisco, is also in talks with ingredients suppliers to distribute its food coloring globally.
- “We are starting with colors but also expanding into flavors in the coming years,” Cassini says.
State of play: The “clean” ingredients sector has seen a handful of deals as ingredients incumbents seek to diversify their portfolios.
- UK-based ingredients company Tate & Lyle bought Nutriati, which develops and produces chickpea protein and flour, last year for an undisclosed price.
- Ireland-based ingredients giant Kerry acquired Natreon, a U.S.-based producer of ayurvedic botanic ingredients, for about $45 million in 2022.