Why you must attract impact investment for your biotech startup: the case of CELLUGY and Sky Ocean Ventures

July 26, 2021

We have recently been experiencing, and we are now convinced that the intersection of environmental impact and startup investment is especially exciting. In December of 2019, CELLUGY was the runner-up of the Ocean Plastic Innovation Challenge, a key component of the partnership between Sky Ocean Ventures and National Geographic to find innovative solutions to reduce the global ocean plastic crisis. If you have followed CELLUGY's journey, either via our LinkedIn page or articles on the website, then you are probably aware of our relationship with Sky Ocean Ventures (SOV). Impact investment takes the ongoing discussions of the startup world towards a different criterion to what we define as "successful". It all starts with a robust alignment of the missions. 

We first met SOV in 2018 at the Hello Tomorrow Conference and we immediately found mutual ground in our shared mission to solve the scourge of plastic pollution. SOV's team is looking to amplify the voices of sustainable startups that are developing solutions for environmental pollution. 

CELLUGY is a Danish-based biotechnology company that has developed (and aims to continue developing) innovative proprietary technologies relating to the production, processing, formulation, and application of bio-nanocellulose. The company's primary activities consist of research, development, and ultimately, commercialization of bio-nanocellulose suspensions. Our mission is summarized as follows:

  • We design innovative and competitive materials for circularity. We want to take an active role in designing a circular economy where the totality of the materials is reusable, recyclable, or compostable.
  • We provide an effective after-use economy to reduce the leakage of fossil-derived products into the environment. 
  • We encourage brand owners to meet aggressive sustainability goals in their corporate sustainability strategy. In addition, we want to collaborate with other players in the ecosystem, synergistically creating materials that are in tune with the environment.

We manifest our values in our product EcoFLEXY, which is tightly connected to the UN Sustainable Development Goals (SDGs) 9, 12, 13 directly and 14, 15, 17 indirectly. We believe in partnerships on behalf of our planet Earth. We develop our product and work together with partners who care about the environment and its sustainability.

The enabler of a strong collaboration between CELLUGY and SOV lies in the mission overlap. SOV's model of impact investment focus includes bold ideas with the potential to scale up and drive behavior change for millions of people across the world. SOV invests in three categories:

  • Innovations to create superior materials that can outperform plastics and be more sustainable.
  • Solutions that inspire responsible consumption by designing out waste through business model and product innovation.
  • Improvements in the recycling, clean-up, and treatment of waste plastics, to create a more circular economy.

SOV's impact objectives are derived from two UN SDGs: number 12, Sustainable and Responsible Consumption and number 14, Life Below Water, and SOV develops specific “impact” KPIs for each portfolio company to track and show the outcome of the investment from an “impact” perspective. In addition, CELLUGY is among the 25 high-potential ideas in SOV's portfolio, at an early stage, from pre-seed through to Series A.

The investing landscape is changing fast. Sky Ocean Ventures is the first non-strategic fund launched by a global corporation to tackle an environmental issue. And that was the attraction of the partnership with Cellugy. SOV wants to be a trusted partner with "resourceful" money. 

CELLUGY is organizing itself across a value chain with a range of ecosystem players, like sugar producers, packaging manufacturers, chemical companies, and brand owners, highly influenced by the consumer sentiment on the consequences of plastic waste leaking in the environment. Our energy is dedicated to product innovation, as demonstrated by EcoFLEXY, and always investigating other efficiencies of scale, to reach the market in real-time. 

Our company culture and mindset are reinforced by having SOV on board with us and their pre-seed investment alongside the National Geographic award has been a huge milestone after a long period of bootstrapping, benefiting from funding initiatives from the local government and the European Union to finance the company's development.  Shortly after our investment from SOV, we successfully secured funding through a grant from the Novo Nordisk Bio-Innovation Institute and we secured €2.38M from the European Innovation Council (EIC) Accelerator's first Green Deal Call. The prestigious grant has a success rate of only 3%, constituting a significant milestone for the company. So, with all these fortunate resources in place we are now starting conversations around our full seed round of financing where we are looking to bring on expert partners. 

For other impact (biotech) startups out there, do not get discouraged as it is important to keep the faith. You should reflect on what your core is and what you can improve. Funding milestones are transitory destinations, preparing and equipping you for a more extended trip. Choose the first companions wisely, as that will empower you for the challenges to come.