LONDON: SEED Innovations Ltd, an AIM-quoted investment company, has participated in a £4.5 million financing of portfolio company Clean Food Group, a UK biotech manufacturer developing sustainable oils and fats through fermentation.
The financing, structured as a convertible loan note, was led by Clean Growth Fund and New Agrarian Company Ltd. SEED committed £260,000 to the round, which will be satisfied from its existing cash resources of approximately £2.7 million.
The convertible loan note carries a 12% annual coupon and matures in August 2027. It converts prior to maturity at a 20% discount to the price of a future equity fundraising or, in the event of a sale, at a 20% discount to the lowest price per share implied by the transaction. If not converted early, the note will convert at maturity at 16.5 pence per share, matching the last equity raise price.
Jim Mellon, non-executive chair of SEED, said the company’s strategic focus remains on robotics and AI but that it continues to selectively support legacy investments.
“Clean Food Group is making good progress, and this further investment enables SEED to maintain exposure to that momentum alongside leading sector investors,” Mellon said.
Mellon also serves as co-chair of Clean Food Group and is chair and founder of New Agrarian, an investing company part-owned by Mellon. He is also co-founder and executive chair of Agronomics Ltd, a London-listed company focused on clean food investments. Together, New Agrarian, Agronomics and Mellon hold a combined stake of approximately 36% in Clean Food Group. Mellon’s pre-conversion holding on a look-through basis is approximately 5.3%.
Following the investment, SEED’s aggregate exposure to Clean Food Group, including both its equity holding and loan note participation, will be approximately £1.98 million, compared with a total invested cost of £647,000.
SEED holds 7,161,336 ordinary shares in Clean Food Group, representing about 4.5% of the company’s issued share capital on a fully diluted basis. The holding was valued at £1.7 million in SEED’s 2025 interim report. The company said the loan note structure does not imply an equity valuation unless and until converted, so the transaction has no impact on the carrying value of its existing shareholding.
Clean Food Group, which is pre-revenue, has raised approximately £13 million in funding to date. In the year ended Dec. 31, 2024, it reported a loss of about £1.4 million and net assets of £3.1 million.
The company separately secured a £700,000 non-dilutive grant from Innovate UK. The funding will support the scale-up of its one million-liter fermentation manufacturing facility in Knowsley, Liverpool, which the company acquired in September 2025.
Tom Ellen, chief financial officer of Clean Food Group, said the support from Clean Growth Fund and New Agrarian represents a strong endorsement of the company’s progress.
“The capital raised will enable the company to bring on stream the world’s largest yeast-derived oils and fats facility and to deliver on our long-term vision for sustainable food manufacturing,” Ellen said.
The global sustainable food market was valued at US$315 billion in 2024 and is projected to reach US$524 billion by 2032, according to industry data cited by the company.