The investment will enable the company, MiAlgae, build a pilot plant at an un-named distillery and increase production to a level where it can take part in trials with feed producers. The firm will also take on extra staff.
MiAlgae founder Douglas Martin developed an omega-3-rich microalgae that feeds on the nitrates and phosphates in the waste water from distilleries.
Funding has come from Equity Gap, the Scottish Investment Bank (SIB) and the University of Edinburgh's Old College, where Martin gained a Masters degree in synthetic biology and biotech.
Last year MiAlgae held a ‘friends and family’ investment round to raise funds to optimise the production process.
“We’ve developed the technology through the friends and family round, and we’ve now gone and raised a larger chunk of investment to go and build a pilot plant,” said Martin.
“We have four people at the moment and we’re looking to add another two to three.”
Martin said he didn’t yet know the timescale for the development, adding: “We’ll be looking to run as fast as possible, with the anticipation that there’ll be some hurdles.”
There are challenges in scaling it up, but we’re at the stage where we can give that a go
MiAlgae has been in talks with feed manufacturers but has not yet been able to grow enough algae for trials to take place.
“This [pilot plant] will take us into that next stage,” explained Martin.
“There are challenges in scaling it up, but we’re at the stage where we can give that a go.”
Fish feed isn’t the only potential option for MiAlgae’s omega-3.
“We're looking at multiple industries in the supply side, multiple industries at the product side, then diversification into multiple products beyond feeds... There are lots of things we can do with our products,” said Martin.
‘Exciting new investment’
Kerry Sharp, head of the Scottish Investment Bank, said: “This is an exciting new equity investment for Scottish Enterprise into a company that has utilised the circular economy to make an innovative and valuable product.
“The funding round will also allow high value research and development employment opportunities to be created in rural Scotland with the roll out of the new pilot plant.”
Algae containing omega-3 is produced in Brazil for BioMar using fermented plant sugars, and joint venture Veramaris is building a $200 million commercial-scale facility for producing algae in Nebraska in the US.
MiAlgae’s operation differs by obtaining nutrients at low or no cost.
Martin said: “Essentially the big advantage of it is that we are using the nitrate and phosphates from the water, helping the distilleries essentially get rid of their by-product that they otherwise have to process [at a cost], or spread it on land as fertiliser, so we have a way of saving costs on that.
“Part of it is that we would look to use their waste heat too, which is another set-off on the costs [for MiAlgae].”