BioVeritas Closes on $65M to Advance Upcycled Bio-Based Ingredients
Ara Partners, a private equity investor focused on backing companies producing consumer products using cost-saving and low-carbon technologies, has committed $65 million to bio-based ingredients company BioVeritas.
Already the majority shareholder in the company, this additional capital from Ara Partner will be used by BioVeritas to support the rapid commercialization of its pioneering production process for clean-label food and feed ingredients, gut health products, and industrial materials.
A seismic shift by consumers toward more natural and transparent food ingredients and away from processed and synthetic options is driving strong growth in the natural ingredient category. For the last hundred years the food industry has relied mainly on chemistry, and most recently, on genetic modification for the development of new ingredients. However, there is growing pressure to revert to more natural solutions.
The striving for the holy grail of a “clean label” to meet this demand is expected to translate into a CAGR of 5 percent for the global food flavors market, to reach a value of $19.72 billion by 2026 – up from a value of $13.31 billion in 2018, according to research conducted by Reports and Data.
Acquired by Ara Partners in 2021, BioVeritas appointed David Austgen, a 35-year veteran of the energy, biofuels, biochemical, and chemical industries, as its CEO. From its headquarters in Bryan, Texas, the company’s proprietary process upcycles underutilized and excess biomass from the food and ag industries (such as broken pasta, or even pineapple skin, or agricultural stubble), turning it into short- and medium-chain fatty acids by leveraging a self-regulating natural ecosystem of microorganisms.
This anaerobic digestive ecosystem mimics the processes of human and animal gastrointestinal tracts. BioVeritas explained that it recovers organic acids such as butyric or valeric acid, using the greenest methods - without any harsh chemicals or toxic solvents in a closed-loop system - making it one of the most natural ingredient solutions available to the market.
“BioVeritas pioneered a proprietary fermentation process, based on anaerobic digestion, that most closely matches what happens in nature, such as in a cow’s digestive system,” stated the company on its website. “In fact, our process has one big advantage over Mother Nature: our process does not release methane, a key greenhouse gas.”
The final products are fully plant-based, have industry-leading efficacy and quality, and are bound for innovative companies looking for natural solutions to replace conventional petrochemical options for food preservation and the extension of shelf life, such as a mold inhibitor, human and animal health, and industrial materials.
Future plans for the company include the building of a commercial facility with a yearly production capacity of 44 million pounds, beginning in 2025, giving it the ability to achieve market traction through scale.
“Petrochemicals are part of nearly every aspect of our lives, including our global food supply,” said Austgen. “Our mission at BioVeritas is to decarbonize the global human & animal food, feed, and gut health industries by replacing petrochemical ingredients with highly efficacious plant-based natural equivalents, thereby contributing to a healthier population and a more sustainable planet.”
~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at email@example.com.
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