Fermentation specialist NextFerm raises $9.2 million in IPO
The IPO reportedly pegged the company’s value at $31.2 million. NextFerm also reportedly raised an additional $918,000 from a set of existing investors that includes Cider Holdings, Orgad Agricultural Cooperative, Ortal, Gadot, Arancia International, and Merage venture capital.
Company benefits from Enzymotec experience
NextFerm is the brainchild of former Enzymotec executives after that company was acquired by Frutarom in 2017. NextFerm’s CEO Boaz Noy headed up Enzymotec’s food ingredients division. Yossi Peled, chairman of NextFerm’s board, served in a similar position with Enzymotec.
One of the company’s primary early products is branded as AstaFerm, which is astaxanthin derived from Phaffia yeast (Phaffia rhodozyma). The yeast was first isolated by Hermann Pfaff of the University of California Davis in the 1960s. NextFerm’s vice president of global marketing, Elzaphan Hotam, said he believes his startup company is the first to bring the ingredient to market from this source for human consumption. The astaxanthin produced in this way in the past has been devoted to the aquaculture feed markets, where is acts primarily as a colorant for the flesh of farmed salmon and trout.
“NextFerm marries a cutting edge technology with a wonderful group of individuals in relevant fields,” Hotam told NutraIngredients-USA. “We took a small company (Enzymotec) up to an IPO, and we want to do that again.”
“You can add in to that ambition our expertise in fermentation, and a suite of non GMO techniques for yeast enhancement,” he said.
NextFerm has cooperated with Lallemand in the past on a fermentation-based biofuels project, and Hotam said some of same expertise has been brought to bear on the astaxanthin effort. Promising strains of the yeast that express the highest levels of the carotenoid are identified and cultured to boost the productivity of the overall fermentate.
Phaffia astaxanthin produced in free form
Phaffia-derived astaxanthin does have a stereoisomeric difference form the astaxanthin produced by the algae Haematococcus pluvialis, which is the most common form of the ingredient on the market.
Research conduced on a model organism, C. elegans, has identified different antioxidant potentials between algae, yeast and synthetic forms of astaxanthin. But the authors of that 2016 study noted that all three significantly prolonged the worms’ short life span under induced oxidative stress.
And Hotam said Phaffia-derived astaxanthin has an advantage all its own. It produces the carotenoid in a free, non-esterified form, which NextFerm claims boosts its uptake in the body.
“We believe that provides fast and efficient absorption. The other crucial element is the technology we impose on the fermentation process for extraction and purification. We can produce 10% beadlets with not fishy odor or flavor that will be appropriate for tablets and gummies,” Hotam said.
Interest is heating up in finding ways to produce astaxanthin in ways other than cultivating Haematococcus pluvialis. Just last week startup fermentation specialist Biomedican announced it is spinning off a unit devoted solely to producing astaxanthin from a bioengineered form of yeast.
Founder: potential drives investment interest
In addition to its astaxanthin ingredient, NextFerm is also developing a protein ingredient called Protevin, which is said to be a vegan protein with a whey-like flavor and nutritional profile. The ingredient is also said to be non-GMO.
According to Israeli financial site Globes, NextFerm is still in a very early market phase, with about $27,000 in revenue in the US in the past year and losses of $2 million. But Noy said investment interest in the company is driven by its potential.
“There is a feeling that the market understands the potential in the food-tech sector and in particular for special proteins, and that is a change compared with the past,” Globes quoted Noy as saying.