Reach - a non-regulatory announcement

AIM: FIPP

27 August 2024

Frontier IP Group Plc

("Frontier IP" or the "Group") 

Portfolio news - Nandi Proteins secures investment from Nesta and Scottish Enterprise as part of £500,000 funding round

Frontier IP, a specialist in commercialising intellectual property, today announces that portfolio company Nandi Proteins ("Nandi" or the "Company") has raised more than £500,000 via a convertible loan with investors including Nesta and Scottish Enterprise.

The move is part of wider funding initiative aimed at raising a total of about £1.5 million for the Company. Nesta Impact Investments (NII), the investment arm of UK social innovation agency Nesta, has also committed to back an equity funding round, which is expected to complete later this year and which aims to raise a further £1 million. Frontier IP holds a 19.7% per cent equity stake in Nandi.

Nandi intends to use the funding to support development of its egg white replacer, which has attracted strong interest from the baking and meat alternative industries. Earlier this year, Nandi signed a commercial license with a leading global food ingredients business who will take Nandi's meat/fat replacer to market worldwide once scale up and final application tests have been completed successfully.

Nandi's meat and fat replacers are based on collagen. The Company uses vegetable proteins to replace egg whites in a range of products, including gluten-free bread and muffins. Replacing egg whites in meat alternatives means vegetarian products can be sold as vegan.

Other applications for its innovative technology being developed by Nandi include:  

·    vegetable proteins to replace methylcellulose a widely used binder in plant based meat alternatives

·    whey proteins to replace chemical emulsifiers in baked products

John Loder, investment director at Nesta Impact Investments, said: "Through pioneering ways to reduce the fat with lower calorie ingredients in popular foods, Nandi Proteins has the potential to help reduce the UK's stubbornly high obesity rates. Nesta Impact Investments is committed to finding innovative ways to help halve obesity, aligning closely with Nandi's commercial egg and meat replacements for baking recipes, sausages and burgers, which in some cases halve the fat content. We are excited to support Nandi as it develops its business further."

Kerry Sharp, Director of Entrepreneurship and Investment, Scottish Enterprise, said: "As an existing investor we are pleased to support Nandi Proteins as it makes real progress towards commercialising its innovative protein technology."

David Flower, Chief Executive Officer of Nandi Proteins, said: "We are delighted with this funding from Nesta and Scottish Enterprise, and Nesta's commitment to invest in our equity raise. It provides further validation for our innovative food ingredient technology following our success in completing a global license of our first product that will be taken to market by a major industry supplier." 

Neil Crabb, Frontier IP Chief Executive Officer, said: "Nandi's technology has huge potential to replace undesirable ingredients used widely in the food industry. We very much welcome the support from Nesta, the UK government fund for social good, which underlines the value of the Company's work."

ENQUIRIES

About Frontier IP

Frontier IP unites science and commerce by identifying strong intellectual property and accelerating its development through a range of commercialisation services. A critical part of the Group's work is involving relevant industry partners at an early stage of development to ensure technology meets real world demands and needs.

The Group looks to build and grow a portfolio of equity stakes and licence income by taking an active involvement in spin-out companies, including support for fund raising and collaboration with relevant industry partners at an early stage of development.

About Nesta Impact Investments

Nesta Impact Investments provides financial, knowledge and network capital to innovative tech ventures that are changing the world for good. We look to back businesses in edtech, foodtech, healthtech, climate tech, the future of work and productivity, that are closely aligned to Nesta's mission impact goals:

·     sustainable future: To accelerate the decarbonisation of UK households and raise productivity in ways that advance the transition to net zero. Our focus at the moment is on reducing domestic energy consumption, supporting SMEs to adopt green technology and supporting the upskilling needed for a green economy.

·     A healthy life: To increase the average number of healthy years lived in the UK, while narrowing health inequalities. Our focus at the moment is on reducing obesity. This includes new food tech, novel ingredients, healthy brands and helping people access healthy foods, as well as relevant behavioural and health tech.

·     A fairer start: To narrow the education outcome gap between children growing up in disadvantage and the national average. We look for solutions that deliver high-quality, affordable provision and workforce development. We are also looking at financial inclusion solutions which can reduce stress on families who can then better support the home learning environment.

About Scottish Enterprise

Scottish Enterprise (SE) is Scotland's national economic development agency and a non-departmental public body of the Scottish Government. It supports businesses to innovate and scale to transform the Scottish economy by focusing on new market opportunities through targeted investment, innovation and internationalisation. Follow us on X (formerly Twitter) and LinkedIn.

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About Nandi's technology

Nandi's patented technology is based on the knowledge that the functional properties of proteins change when they unfold (denature). Controlled denaturation can be used to deliberately change and control the protein functionality as an ingredient. The Company is focused on two protein types:

·       globular proteins, where the molecules are folded into a spherical shape, found in vegetables and dairy; and

·       spiral proteins, where long chains of molecules form spirals or helices. They are found in meat.

In both cases, chemical bonds along the length of, and between different portions of, the protein molecule keep the proteins in their shapes. 

Applying heat breaks the weak bonds allowing the proteins to unfold. The structure of the protein that was previously 'inside' the folded protein is now exposed. This allows it to interact with its surroundings -- for example by binding onto water molecules -- enhancing functionality such as solubility and emulsifying ability.

The unfolded structure also allows for new chemical bonds to form between one protein to another. The result is that individual protein molecules can become joined together to create a network which will change functional properties such as thickening and gelation abilities.

These denaturation processes are already widely used in food ingredient processing and cooking. For example, an egg white consists of globular proteins suspended in water. When you fry the egg, the proteins unfold and create a mesh, which traps the water molecules. The egg white solidifies. The challenge is in controlling the process precisely. Cook the egg for too long, too many protein bonds form, the net's mesh becomes too tight, and the white becomes rubbery.

By controlling the heat applied and monitoring the unfolding process extremely precisely, Nandi can precisely create protein functionality that allows it to replace the functionality of fat and additive molecules such as emulsifiers.

Nandi is capable of producing modified proteins from both globular proteins (present in a wide range of naturally-occurring foodstuffs, including whey, potato, soy and peas, as well as eggs) and spiral proteins present in meat (Nandi has been specifically exploring the modification of collagen proteins).

Nandi achieves control of the unfolding process by using chemistry and light-based systems to measure in real time a range of key variables as heat is applied to proteins in solution. This allows the Company to maximise their functional properties, such as emulsification, solubility, acid stability, foaming, water binding and gelation.

The company's technology includes proprietary sensor systems which can be used across existing manufacturing processes to control the variables and create functional proteins.

Nandi version

Nandi Proteins secures investment from Nesta and Scottish Enterprise as part of £500,000 funding round

Nandi Proteins ("Nandi" or the "Company") has raised more than £500,000 via a convertible loan with investors including Nesta and Scottish Enterprise.

The move is part of wider funding initiative aimed at raising a total of about £1.5 million for the Company. Nesta Impact Investments (NII), the investment arm of UK social innovation agency Nesta, has also committed to back an equity funding round, which is expected to complete later this year and which aims to raise a further £1 million.

Nandi intends to use the funding to support development of its egg white replacer, which has attracted strong interest from the baking and meat alternative industries. Earlier this year, Nandi signed a commercial license with a leading global food ingredients business who will take Nandi's meat/fat replacer to market worldwide once scale up and final application tests have been completed successfully.

Nandi's meat and fat replacers are based on collagen. The Company uses vegetable proteins to replace egg whites in a range of products, including gluten-free bread and muffins. Replacing egg whites in meat alternatives means vegetarian products can be sold as vegan.

Other applications for its innovative technology being developed by Nandi include: 

·    vegetable proteins to replace methylcellulose a widely used binder in plant based meat alternatives

·    whey proteins to replace chemical emulsifiers in baked products

John Loder, investment director at Nesta Impact Investments, said: "Through pioneering ways to reduce the fat with lower calorie ingredients in popular foods, Nandi Proteins has the potential to help reduce the UK's stubbornly high obesity rates. Nesta Impact Investments is committed to finding innovative ways to help halve obesity, aligning closely with Nandi's commercial egg and meat replacements for baking recipes, sausages and burgers, which in some cases halve the fat content. We are excited to support Nandi as it develops its business further."

Kerry Sharp, Director of Entrepreneurship and Investment, Scottish Enterprise, said: "As an existing investor we are pleased to support Nandi Proteins as it makes real progress towards commercialising its innovative protein technology."

David Flower, Chief Executive Officer of Nandi Proteins, said: "We are delighted with this funding from Nesta and Scottish Enterprise, and Nesta's commitment to invest in our equity raise. It provides further validation for our innovative food ingredient technology following our success in completing a global license of our first product that will be taken to market by a major industry supplier."