Seed joins funding round at medical cannabis firm Eurox

Medical cannabis-focussed investor Seed Innovations put another €0.18m (£0.15m) into investee company Eurox, it announced on Wednesday, as part of a €4.4m fundraise.

The AIM-traded firm said the Germany-based Eurox Group had raised €4.4m from new and existing investors, at a 62% premium to its July 2021 fundraise.

Seed invested €3m in that round.

As part of the new fundraise, €2m was subscribed for by a new institutional investor, Iberis Bluetech Fund - a fund managed by Portugal-based private equity manager Iberis Capital.

Iberis' investment was by way of a secured convertible loan note, and marked its first investment in the medical cannabis sector.

Seed said the fundraise made for an inferred increase in the carrying value of its holding in Eurox to €5m from €3m.

The company said its investment of a further €0.18m would result in a “slightly diluted” shareholding of 8.49% of the fully-diluted capital of Euroix following the raise.

It described Eurox as “well-capitalised” for the development of a Portuguese facility, as well as further acceleration of its product development.

“Eurox has made considerable progress since our initial investment last year, generating sales by broadening its medical cannabis range and crucially its distribution channels while remaining focussed on innovation and product development,” said Seed chief executive officer Ed McDermott.

“The support seen for this fundraise, completed at a 62% premium to our initial investment, is testament to the brand and its growth potential and I am particularly encouraged to see a new institutional cornerstone to the fundraise.

“Eurox is fully in-line with our investment strategy in the European wellness and medical cannabis space and with this funding providing Eurox with a very stable platform for growth and with the strong 'Made in Germany' value proposition and capacity for pharmaceutical innovation, we expect to see significant developments over the year ahead.”

At 0959 BST, shares in Seed Innovations were up 5.22% at 5p.