Israeli Microalgae Startup Raises $5M Seed Extension to ‘Take Fermentation Out of the Dark’

Brevel, an Israeli startup using light and fermentation to create microalgae-based ingredients, has secured $5M in a seed extension round.

Israeli food tech player Brevel has extended its seed funding pot by $5M, taking total investment in the round to $25M.

The expansion is based on the exercise of warrants granted to investors in the initial closing of the seed round in June 2023, with notable backers including NevaTeam Partners, Siddhi Capital, the EU’s EIC Fund, and The Food Tech Lab. Several new investors also joined the latest round, and were granted access under the same terms.

Brevel, which makes microalgae-based proteins, lipids, fibres and antioxidants via fermentation, will use the new capital to develop ingredients for multiple food and drink applications, secure manufacturing deals with joint venture partners, and sign additional offtake agreements as it prepares for large-scale production.

“Our investors chose to reinvest, based on Brevel’s impressive progress following the last round,” said Brevel co-founder and CEO Yonatan Golan. “We are dedicated to delivering nutritious protein that can replace animal protein in formulations.

Shai Levy, partner at Nevateam Partners and a board member of Brevel, added. “The shareholders’ decision to exercise their warrants is a strong vote of confidence in Brevel’s mission and execution. We believe their technology will play a pivotal role in shaping the future of alternative proteins, and we are excited to continue supporting their journey toward that.”

A microalgae ingredient to transform dairy alternatives

Founded in 2017 by Golan and his brothers Ido and Matan, Brevel combines light with sugar fermentation in indoor bioreactors. Traditional fermentation – limited to dark environments – produces microalgae at high yields and affordable costs, but poor in light-dependant nutrients, functionalities and overall commercial value, according to the company.

Brevel’s process to “take fermentation out of the dark” unites it with light to produce nutrient-rich microalgae at high yields and low costs, without any need for genetic modification. Golan has described the tech as akin to “putting an electric motor into a Tesla car”.

Microalgae’s natural makeup of nutrients – including protein, lipids, fibre, and pigments – depends on photosynthesis for their development and growth. Brevel uses a strain of microalgae from the Chlorella family, a widely commercialised source of single-cell protein already classed as safe for human consumption by the FDA’s GRAS system in the US and part of the EU’s safe list of novel foods for decades.

To extract the protein, it has developed a downstream minimal process that does not involve any solvents or chemicals and retains the quality, functionality, and nutritional value of the microalgae.

The resulting ingredient is a neutral-flavoured white powder with 60-70% protein concentration and a full amino acid profile. This can be integrated into a range of meat and dairy analogues, thanks to emulsifying, gelling, and foaming attributes that can help replicate the taste, and texture of animal proteins.

The company is targeting the dairy alternatives market first, because the segment doesn’t yet have a plant protein solution with zero flavour or colour compromises, as Golan told Green Queen last year.

Brevel gears up for summer launch with cost-effective model

To keep costs low, Brevel is taking a leaf out of the soy protein business model. “The revenue must come from the co-products, just as with soy and meat products,” Golan stressed. “Our combined light and fermentation platform allows us to capitalise on all of the components of the microalgae and not just the protein portion.”

Instead of discarding the functional lipids, antioxidants, and fibres from the protein manufacturing process, the company valorises these sidestreams to make clean-label emulsifiers and nutritional boosters for functional foods and supplements.

“While the fermentation process reduces costs, the light in our proprietary technology enables us to increase bottom-line results since we produce, in addition to the protein, functional oil with potent emulsifying properties, antioxidants as valuable food supplements, and nutritional fibres for food applications,” Golan explained.

“Through this wide portfolio, we can achieve overall price parity for our superior protein as well as for each co-product. We plan to roll out the next products in line this summer.”

The startup opened its own 27,000 sq ft commercial factory in southern Israel last year, which can produce hundreds of tonnes of microalgae protein powder every year with bioreactors ranging from a capacity of 50 to 5,000 litres.

In addition, it has put in place several joint-venture partnerships in the US, Europe, and Asia to build large factories with fermentation capacities of over 900,000 litres and produce thousands and tens of thousands of tonnes of microalgae ingredients annually. And earlier this year, it established a 10-year supply deal with The Central Bottling Company (CBC) – the national distributor for Coca-Cola – to use its ingredients in dairy alternatives and functional drinks.

Brevel is among a host of firms leveraging the potential of microalgae for climate-friendly foods, supercharging a market set to surpass $25B by 2033. These include Checkerspot, Algae Cooking Club, Mewery, Quazy Foods, Ocean Kiss, Algama, Sophie’s Bionutrients, and Triton Algae, among others.