New Investment: Clean Food Group Ltd

RNS Number : 2547U

Seed Innovations Limited

01 August 2022

 

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.

Seed Innovations Ltd / AIM: SEED / Sector: Closed End Investments

1 August 2022

SEED Innovations Limited

("SEED" or the "Company")

New Investment: Clean Food Group Ltd

SEED Innovations Ltd, the AIM-quoted company investing in fast-growing and industry-leading businesses with a focus on the medical cannabis, health and wellness space is pleased to announce that is has invested a total of £171,000 in Clean Food Group Ltd ("Clean Food Group" or "CFG") a UK-based cellular agriculture company focused on the commercialisation of palm oil by fermentation (the "Investment"). The Investment has been made in two parts, firstly £46,000 for 4.6 million shares in CFG was invested in a seed round in March 2022 and a further £125,000 for 1.25 million shares in CFG has now been invested in the "Friends & Family" funding round which raised a further £1.65 million and was led by Agronomics Limited, the AIM traded alternative proteins company with a focus on cellular agriculture and cultivated meat.

Following this latest round of funding, SEED will have a holding of 5,850,000 shares representing 5.38 % of CFG's total issued share capital, with an implied valuation of £585,000 based on the latest issue price.

Highlights:

· Clean Food Group is a UK based food-tech business focussed on bringing sustainable, cultivated foods to market, initially in the UK and Europe

· Clean Food Group operates within the fast-developing cultivated food industry, a market with significant opportunities driven by global, environmental, health and animal welfare concerns about existing and future consumption levels of animal protein and other foods such as palm oil

· Clean Food Group was co-founded by SEED CEO, Ed McDermott and Alex Neves in 2021 with the goal of becoming the leading independent UK cultivated food ingredients business

· CFG's main focus is on producing a sustainable and local alternative to palm oil of which the market is expected to reach US $ 65.5 billion by 2027¹

· Investment in Clean Food Group brings with it further diversification to SEED's current portfolio and is in line with their investment strategy of investing in the life science and biotech sectors

· Clean Food Group owns the IP for a technology platform that produces a bio-equivalent palm oil alternative using microbial fermentation and has secured a 2-year collaboration with the University of Bath to scale the technology and bring its palm oil alternative to market

· Investment led by Agronomics Limited (AIM: ANIC), a leading listed alternative proteins investment company with a focus on cellular agriculture and cultivated meat with a portfolio of 22 companies at the Pre-Seed to Series C stage in this rapidly advancing sector

Lance de Jersey, Finance Director and COO at SEED, commented:

"This investment has come at a time where sustainability and minimising environmental damage is at the forefront of investors' minds. CFG seeks to utilise its disruptive technology to produce a bio-equivalent palm oil alternative using microbial fermentation. Palm oil plantations have been well documented to be a major cause of damage globally in terms of habitat destruction and deforestation and CFG are aiming to commercialise the IP it owns to bring an alternative to market.

"With this £1.65 million funding in place, CFG are well capitalised to complete the next stage of corporate development to bring their palm oil alternative, an ingredient that has the potential to solve substantial environmental, food security, health and working environment challenges within the incumbent palm oil supply chain and has already received significant market interest, to market.

"This is an exciting time for CFG as they start the commercialisation of their bio-equivalent palm oil alternative, and we look forward to supporting CFG's growth from this early stage."

About Clean Food Group

Clean Food Group was co-founded by CEO Alex Neves and Co-Chairman Ed McDermott in 2021, with the goal of becoming the leading independent UK cultivated food ingredients business.

Having acquired the IP for a technology platform that produces a bio-equivalent palm oil alternative using microbial fermentation from the University of Bath in Q1 2022, Clean Food Group has secured a 2-year collaboration with the university to scale the technology and bring its palm oil alternative to market.

Developed by Professor Chris Chuck and his team at the University of Bath over the last 8 years, the proprietary technology platform also produces natural 2-phenylethanol as a by-product which is used worldwide as a rose fragrance and flavour.

Professor Chris Chuck joined Clean Food Group as a technical advisor and leads a team of scientists at a dedicated Clean Food Group laboratory and Pilot Plant at the University of Bath.

Clean Food Group is currently identifying partners to work with and intends to submit a novel foods dossier to the European Food Standards Agency ('EFSA') and UK Food Standards Agency ('FSA') within 2022 to seek authorisation to sell to consumers in the UK and Europe, once in production.

Given the breadth of management at CFG and the quantum of Mr McDermott's ownership at 11.9%, the Company acknowledges the potential for conflicts of interests in making this investment. Whilst not a transaction that falls within AIM Rule 13, the SEED Board, excluding Mr McDermott, have taken equivalent measures to carefully review the terms of the funding round, the business plan of CFG and the management team assembled by Mr Neves, and have concluded that the terms of the investment are fair and reasonable, are within the scope investment policy of the Company and represent an appropriate investment opportunity for SEED.

Jim Mellon, a 6.95% SEED shareholder and a director of Agronomics, has been appointed as Co-Chairman of CFG in conjunction with this recent funding.

AIM Rule 12 Disclosure  

As a new enterprise, CFG does not have audited results that can be reported upon.  CFG is a pre-revenue company which has raised approximately £2.35 million in funding to date. This latest funding round completed at 10p per share gives CFG a post-money market capitalisation of approximately £10.8million.  

** Ends **

For further information on the Company please visit:  www.seedinnovations.co  or contact:

Ed McDermott  Lance de Jersey	SEED Innovations Ltd	E: [e-mail]
James Biddle  Roland Cornish	Beaumont Cornish Limited,  Nomad	T: (0)20 7628 3396
Isabella Pierre  Damon Heath	Shard Capital Partners LLP  Broker	T: (0)20 7186 9927
Catherine Leftley  Isabelle Morris	St Brides Partners Ltd,  Financial PR	E: [e-mail]

Notes 

Seed Innovations Ltd

SEED Innovations is an AIM quoted investment company focused primarily on disruptive high growth life sciences and technology businesses particularly within the medical cannabis arena. The Company's strategy is to identify early-stage opportunities that have an upcoming investment catalyst and grow its portfolio in terms of value whilst limiting the number of investee companies to a level where relevant time can be devoted to each.

Clean Food Group Ltd

The Clean Food Group is a UK based food-tech business focused on bringing sustainable, cultivated foods to market, initially, in the UK and Europe.

Clean Food Group operates within the fast-developing cultivated food industry, a market with significant opportunities driven by global environmental, health and animal welfare concerns about existing and future consumption levels of animal protein and other foods such as palm oil.

Clean Food Group sets itself apart through its strong technical, consumer and retail expertise, strong financial backing, and its ability to navigate the complex regulatory environment for new food products.

Clean Food Group is founded by a team with key experience in growing biotech, food industry and retail businesses supported by established venture capital and family office investors with a track record supporting highly successful growth companies in highly regulated industries.

¹ Source: https://www.imarcgroup.com/palm-oil-processing-plant#:~:text=The%20global%20palm%20oil%20market,4.3%25%20during%202022%2D2027

 

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