Danish industrial biotech startup Cellugy has raised $5.3 billion (EUR 4.9 million) in seed funding to scale up production of its technology aiming to replace petrochemicals in cosmetics.
The round was led by Germany’s ICIG Ventures and Denmark’s Unconventional Ventures, with new, U.S.-based investor Joyance Partners joining the round, along with existing investors PSV DeepTech, The Footprint Firm, and EIFO, according to a news release from ICIG Ventures.
Cellugy has developed a platform technology that harnesses the power of bacteria, leveraging cellulose-producing microorganisms that enables the creation of fully bio-based and biodegradable alternatives to carbon-intensive petrochemicals, according to the release.
The funding will accelerate the deployment and commercialization of EcoFLEXY, a technology currently in the pilot phase. Cellugy said it plans a substantial production increase to several tons per year, expanding its manufacturing capacity to commercial production to satisfy extensive and increasing customer demand. The funding will also support further product co-development partnerships to take EcoFLEXY into new application areas and expand the company’s IP portfolio and headcount, the company said.
“Reliance on fossil-based petrochemical ingredients is today’s most critical sustainability issue in producing personal care products. With our technology, we genuinely see a future completely free from these polluting ingredients,” Cellugy CEO and co-founder Isabel Alvarez-Martos said. “Our mission is to develop sustainable solutions for everyday products, so we’re naturally pleased to partner with impact-driven investors. Together, we can achieve those goals”.
According to the release, the global cosmetics market is expected to reach $415.29 billion by 2028. With a growing focus on health and sustainability, consumers are increasingly seeking bio-based alternatives. Cellugy aims to provide what it calls a “drop-in” alternative, which is particularly attractive as it is easily scalable, fits within standard equipment, and can be used in existing infrastructures.
“This investment round will be instrumental in scaling up EcoFLEXY’s production and distribution, allowing us to meet the surging demand for sustainable, high-performance beauty ingredients,” Alvarez-Martos explained. “It will also fuel further product co-development partnerships for EcoFLEXY, allowing us to unlock its full potential and develop new application areas within this target market. By promoting sustainable materials choices and innovative production processes, we see ourselves as also enabling the innovation of others, leading the way to healthier, more ecological solutions that are both skin and planet-friendly”.
Lead investor ICIG Ventures represents the CVC arm of International Chemical Investors Group, a privately owned German industrial group with market-oriented chemicals platforms and enterprises, bringing additional valuable industry-specific connections, expertise, and guidance.
“Investing in Cellugy represents a strategic step for ICIG Ventures, underlining our commitment to fostering innovations that drive sustainability in the industrial sector,” ICIG Ventures Investment Director Pelin Yilmaz said. “Cellugy’s breakthrough in biofabricated cellulose technology not only aligns with our mission to support green technology but also promises to revolutionize the personal care industry and beyond”.
“This sustainable alternative to petrochemicals, coupled with Cellugy’s efficient business model and potential for cross-industry application, presents a compelling combination. We are particularly excited about the synergies in accompanying Cellugy in its scale-up journey. Our investment underscores our belief in Cellugy’s team, technology, and their vision for a more sustainable industry,” Yilmaz added.
“When meeting Isabel, Paruntungan, and Deby we were particularly impressed with their unified mission of creating a sustainable alternative to petrochemical ingredients,” Thea Messel, founder and General Partner at Unconventional Ventures, said. “Their groundbreaking platform technology has the potential to revolutionize not only the personal care industry, which is sorely in need of more sustainable alternatives, but could also disrupt industries like textiles and food”.
“As an impact investor, seeing the founders’ determination to translate outcomes of scientific research into innovative commercial products with significant sustainability gains really stood out to us, and we are proud to be backing them on their growth journey ahead,” Messel remarked.
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