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Cauldron founder and CEO Michele Stansfield.
Cauldron founder and CEO Michele Stansfield. Image credit: Cauldron

Cauldron raises $6.25m series A to scale continuous fermentation tech

March 18, 2024

Australian startup Cauldron has raised AUD9.5 million ($6.25 million) in a series A round led by Horizons Ventures to scale a manufacturing platform enabling its partners to produce high-value ingredients via precision fermentation more efficiently in a continuous process.

The round, which was supported by SOSV and In-Q-Tel (IQT) and Main Sequence, brings Cauldron’s total funding to $17 million. It will enable Cauldron to finalize partners and plans for a 500,000-liter facility with a longer-term plan to build a network of “smaller, smarter” precision fermentation facilities as a CDMO (contract development and manufacturing organization).

Cauldron—which operates 25,000-liters of fermentation capacity at its site in Orange, New South Wales—has proven its continuous fermentation tech “at an industrially relevant scale, unlocking a significant decrease—between 30-50%—in the cost of goods for our customers vs traditional batch fermentation,” claimed Cauldron cofounder and CEO Michele Stansfield.

“From biofuels and agriculture to cosmetics and chemicals, the opportunities are immense.”

‘An accelerated pathway to deliver price parity for commodity bio-products’

The series A round “was a priced round [where investors provide capital in exchange for preferred stock in a company at a price per share determined by the agreed-upon valuation] and approximate 2x mark-up on our last round,” Stansfield told AgFunderNews.

While the series A  was slightly lower than the firm’s recent AUD10.5 million ($7 million) seed round, she said, “The seed round was unusually high because the proceeds were used to acquire 25,000 liters of fermentation capacity and 35 years of continuous fermentation R&D from my former company, Agritechnology.”

She added: “The only reason we triggered our series A so quickly—nine months from close to close—was because we’re achieving customer growth and technology proof-cases faster than projected, which enables us to accelerate our plans to build an industrial-scale hyper-fermentation facility. So the series A will fund key milestones on the path to getting that industrial-scale facility online fast.

“We’re unique in the industry because we already have received OGTR [Office of the Gene Technology Regulator] approval to operate at 10,000 liter scale with customers at our Orange facility and now we are on an accelerated pathway to deliver price parity for commodity bio-products and unlock much needed manufacturing capacity for the precision fermentation industry.”

Asked when the new 500,000-L facility would be built, she said: “Cauldron’s series B, which we plan to raise toward the end of the year, and various other advanced partner conversations, will fund the 500,000-L facility. In due course we’ll be able to reveal more.”

“Michele and Cauldron’s history of succeeding at long-run fermentation is unparalleled. The benefits of the technology—the ability to continuously produce, up to 50% lower net unit costs, and 20% more output with 45% less capex—dismantle a major obstacle for the industry and position the company as a critical manufacturing partner for companies building a more sustainable future.” Po Bronson, managing director, IndieBio, general partner, SOSV

Continuous 10,000-L production for 8 months without genetic drift or contamination

Cauldron believes a continuous (rather than a batch) fermentation process will be key to unlocking the commercial viability of microbial fermentation for a host of ingredients that have historically been sourced from animals or petrochemicals.

In a traditional batch process, microbes proliferate until they reach critical mass in a fermentation tank and are then triggered to start producing a target molecule via a change in the media. The batch is then completed, the ingredient extracted, the tank is cleaned, and the whole process starts all over again.

Cauldron, however, has found a way to maintain microbes in a productive state, and then feed them into ancillary vessels where they start expressing the target molecules. It has successfully run a 10,000-liter production system continuously for more than eight months without contamination or ‘genetic drift,’ two of the biggest challenges in running long-term fermentation.

As the process doesn’t require large fermenters, it is able to reduce both variable costs and fixed costs, and “delivers a lot more product per dollar of CapEx,” said Stansfield, who is working with clients in sectors from alt proteins and human nutrition to biofuels.

“We already have commitments from multiple customers to scale up with us to the industrial facility upon completion of these initial phases at our current site in Orange,” she said. “Based on the results, we have been able to build robust models with third party techno-economic consultants. What we’re seeing is that for commodity bio-products like alternative proteins, there is no credible path to price parity with conventional batch fermentation even with 500,000-L tanks and major strain improvements, but with our hyper-fermentation technology we can get to price parity, and with current [microbial] strains.

“And because of our production efficiencies we can do this at a fraction of the CapEx. It will cost trillions of dollars and 2x improvements in titer [the amount of an expressed target molecule relative to the volume of liquid] to produce 22 million tons of protein at price parity using batch fermentation. Our models are suggesting we can get there for billions of dollars, and not require any gains on titer.”

Disruptive tech

Speaking to us at the Asia-Pacific Agri-Foods Innovation Summit in Singapore last year, Stansfield said: “We can get 20% more protein out of a 100,000-liter continuous line than you would get out of 500,000-liter batch line, and if you look at the difference in CapEx, that’s huge.

“And that’s the disruptive nature of Cauldron’s technology where you can look at having a dedicated manufacturing facility for less than US$30 million where it might cost you $100 to 200 million to build a 500,000-liter batch fermentation process. In the current economy, I don’t think VCs are going to want to fund $200-300 million plants anymore.”

“Precision fermentation is an amazing technology, because it enables bio-based production of a wide range of products with diverse applications. To date, the technology has been hamstrung by its costs compared to conventional production methods, but Cauldron’s unique solution significantly improves the competitiveness of precision fermentation both in capital and operating expenditure.” Chris Liu, Horizons Ventures

Watch our recent interview with Stansfield:

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