Agronomics’ Onego Bio raises €27 million in Series A financing led by NordicNinja VC

LONDON: Agronomics (LSE: ANIC) portfolio company Onego Bio Ltd has successfully raised €27 million in its Series A financing, led by NordicNinja VC, a Japanese-Nordic VC backing companies in climate and deep tech.

In addition, Onego Bio secured a further €9.5 million in non-dilutive funding from Business Finland, a government organisation offering grant funding for innovative Finnish companies that address significant global needs and challenges. Agronomics participated in the round with a €1.55 million investment alongside existing investors Maki VC and Holdix and new investors EIT Food and Tesi, the Finnish sovereign wealth fund.

Subject to audit, Agronomics’ position in Onego Bio, including the Subscription, will be carried at £11.1 million (€12.9 million), including an unrealised gain of £3.8 million.

This represents a gross IRR of 27.57% and a MOIC of 1.53x. Agronomics now holds an equity stake of 16.36% in Onego Bio on a fully diluted basis, accounting for approximately 6.4% of Agronomics’ last stated Net Asset Value at 31 December 2023, including post-balance sheet date adjustments.

Agronomics’ first investment in Onego Bio was In February 2022, when it led the Seed round with a €6.9 million investment. Concurrent with the close of the Seed round, Onego Bio secured an exclusive license from VTT Technical Research Centre of Finland Ltd. (“VTT”) to commercialise its proprietary strains of the highly productive protein expression system Trichoderma reesei to produce egg proteins.

Prior to securing the licence, more than a decade of research had been conducted at VTT under the guidance of Chris Landowski, now CTO of Onego Bio.  Chris recognised the advantages of Trichoderma over other protein expression systems, given its extensive use and high productivity in other fields such as enzyme production.

A LCA (Life-Cycle Analysis) conducted by VTT and published in Nature Foods in 2021, showed that the production of ovalbumin via precision fermentation using Trichoderma as a host organism instead of chickens could reduce environmental impacts across a range of different impact categories, such as global warming potential, land use, marine eutrophication, terrestrial acidification and stratospheric ozone depletion.

Additionally, current supply chains, which at the industrial scale lead to poor animal welfare conditions, are often interrupted by outbreaks of avian flu causing shortages and price volatility. By decoupling egg protein production from intensive poultry farming, precision fermentation provides a more sustainable, ethical and secure supply of egg protein. Onego Bio is one of few companies in the field targeting the egg market which was valued at USD 136.2 bn in 2022 and is estimated to grow at a CAGR of 5.4.

Onego Bio’s Series A funding will be used to continue scaling and optimising its production processes and productivity, finance its work with its contract manufacturing partners and prepare for FDA filing for regulatory approval in the United States.

Onego is on track to receive self-affirmed GRAS (Generally Recognized as Safe) status for Bioalbumen® this year, with a no-objections letter expected from the FDA in 2025.  As a US-Finnish company, Onego plans to first launch in North America, where the regulatory landscape allows a faster market entry, followed by expansion in Europe, South America and Asia.

Jim Mellon, Executive Chairman of Agronomics commented: “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. A long-term sustainable solution for chicken eggs is needed.

We 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.”

New Agrarian Company Limited, an affiliate of Agronomics, invested EUR 0.5 million along with  Jim Mellon, who personally invested EUR 0.25 million on the same terms.