Agronomics investee Onego Bio raises EUR 27m

The AIM-traded company said the investment, led by NordicNinja VC, a Japanese-Nordic venture capital outfit specialising in climate and deep tech, was a significant milestone for Onego Bio's mission to commercialise egg proteins through precision fermentation.

In addition to the series A funding, Onego Bio received €9.5m in non-dilutive funding from Business Finland, further bolstering its financial position.

Agronomics participated in the round with a €1.55m investment alongside existing investors Maki VC and Holdix, and new investors EIT Food and Tesi, the Finnish sovereign wealth fund.

Following completion of the aeries A round, Agronomics' position in Onego Bio was estimated to be valued at £11.1m (€12.9m), representing an unrealised gain of £3.8m.

That translated to a gross internal rate of return (IRR) of 27.57% and a multiple on invested capital (MOIC) of 1.53x.

Agronomics now held an equity stake of 16.36% in Onego Bio on a fully diluted basis, constituting 6.4% of Agronomics' last stated net asset value at 31 December, including post-balance sheet date adjustments.

Onego Bio's journey began in February 2022 when Agronomics led the seed round with a €6.9m investment.

That initial investment facilitated Onego Bio's exclusive licensing of proprietary strains of the highly-productive protein expression system Trichoderma reesei from VTT Technical Research Centre of Finland.

The decision to use Trichoderma was informed by its superior productivity and track record in other fields such as enzyme production.

A life-cycle analysis conducted by VTT and published in Nature Foods in 2021 highlighted the environmental benefits of producing ovalbumin via precision fermentation using Trichoderma compared to traditional methods involving chicken farming.

Agronomics said precision fermentation offered a more sustainable, ethical, and secure supply of egg protein, addressing issues such as environmental impact, animal welfare, and supply chain disruptions caused by outbreaks of avian flu.

Onego Bio's series A funding would be allocated towards scaling and optimising production processes, collaborating with contract manufacturing partners, and preparing for FDA regulatory approval in the United States.

The company expected to receive self-affirmed ‘Generally Recognized as Safe’ (GRAS) status for Bioalbumen this year, with FDA approval expected in 2025.

With plans for market entry in North America followed by expansion into Europe, South America, and Asia, it said Onego Bio was poised to revolutionise the egg protein market, valued at $136.2bn in 2022 and projected to grow at a compound annual growth rate of 5.4%.

“Eggs are an essential part of food businesses, but with the egg market constantly fluctuating in supply and costs due to avian flu and increased demand for cage-free, manufacturers are challenged to find a viable replacement with a consistent, reliable, and safe supply of high-quality protein at an accessible price,” said Agronomics executive chairman Jim Mellon.

“A long-term sustainable solution for chicken eggs is needed; se have been highly impressed with Onego's capabilities and vision from the very beginning.

“By repurposing a well-established technology from the enzyme industry for food protein production, they are well-positioned to scale to the massive volumes needed to future-proof the supply of the world's most versatile and popular food protein.”

At 1448 BST, shares in Agronomics were down 2.27% at 8.6p.

Reporting by Josh White for Sharecast.com.