Established in 2016, the Scottish company has developed a biotechnology platform that uses low-value coproducts from the food and drink industry as a feedstock to initially grow microalgae rich in omega-3 oils.
And MiAlgae plans to commercialize other high-value compounds and pigments through expansion of its platform.
The Conduit Impact Fund managed by Ascension led the round, investing £900,000, with new investor SIS Ventures putting forward £350,000.
Existing investors, Equity Gap, Old College Capital, and Scottish Enterprise, all committed to additional funding, totaling over £1m. The investment builds on the £850k of grant funding recently secured from Zero Waste Scotland and Scottish Enterprise.
This latest investment round, it said, will support it in its growth plans including the completion of a commercial demonstrator facility near Stirling. That is due to be online in 2023.
The investment will also help grow its team and increase its expertise. Ten new posts, including a head of engineering and commercial director, will be created, said the biotech.
MiAlgae is initially targeting the pet food sector with an eye on expansion into the aquaculture sector.
Douglas Martin, MD, MiAlgae, said: “Our process is championing the circular economy and the investment we have secured will be transformational in helping MiAlgae scale quickly both locally and abroad.”
Hadley Diest, investment manager at the Conduit Impact Fund, said MiAlgae’s circular economy approach to producing algae solves key pain points on the supply (Scotch Whisky distilleries) and demand (pet food and fish feed producers) sides - to both dispose of Scotch byproducts sustainably and increase the supply of sustainably sourced, price-competitive, omega-3 into the broader market.