Scot Bio, a Scottish based biotech business has successfully closed a second, oversubscribed funding round led by Scottish investment syndicate Kelvin Capital, alongside Oghma Corporate Finance and private investors in the UK and USA. This is one of the largest private investment rounds in Scotland this year, and is a vote of confidence in the ambitious prospects of the company.
Based in BioCity Glasgow, the biotech incubator located just outside Glasgow, Scot Bio has developed a patented, reactor-based process to respond to worldwide demand for ‘clean labels’ and products free of artificial colours by providing FMCG’s with traceable, natural blue and green colourants. This new funding will allow the company to scale up production and expand its existing team to respond to the rapidly expanding international market for natural colourants, which is expected to experience rapid growth in the next few years.
Natural blues and greens are produced using phycocyanin, an algae derived pigment which received international regulatory approval in 2013. Phycocyanin is difficult to produce and traditionally has been grown in a natural pond system which is unpredictable and restricted. Scot Bio through academic collaborations with Newcastle University and The University of Edinburgh has developed systems that are modular and scalable and capable of meeting the demand from global food manufacturers.
Following Kelvin’s Capital’s initial investment in 2017, the company successfully scaled up to 16,000 litres of production and developed multiple product samples and formulation solutions to major FMCG companies worldwide. They also brought their first commercial product to market in collaboration with Leith based Firkin Gin to create Firkin Blue.
David ‘D.C.’ Van Alstyne, Chief Executive Officer at Scot Bio said. “This is exciting news for Scot Bio and a demonstration of the high quality of our product and the exceptional team behind it. Our ambition is to be the world leader in the production of phycocyanin and other functional food ingredients and with our experienced board, technical and management staff and the support from our friends in academia I am confident we will do it.” Tom Craig, Chairman of Scot Bio said “This is a very exciting business to be involved in. It has patented IP and a huge worldwide market opportunity. I am delighted to be working with DC and his team.”
John McNicol, director of Kelvin Capital Ltd said, “by investing a further £1.8m in to ScotBio, this demonstrates our commitment and belief in the future of this company. Our investors are experienced in this field and will look forward to working with the company to achieve their ambitious plans.”
The private investment by Kelvin Capital was supplemented by Investing Women members and Jackie Waring, Founder and CEO of Investing Women said; “We have a strong association with the great team at Scot Bio, as an investor in the business and through their successful involvement in our AccelerateHER Awards programme. We are therefore delighted to continue our support in this latest round of funding which will help the company further develop its unique product and realise its huge global potential.”
Oghma Partners, the Food & Beverage focused M&A boutique, provided corporate finance advice to the Scot Bio management team with regards to the announced capital restructuring.