Grovepoint partner Brad Fried and CEO Leon Blitz were flying to the Negev desert in Israel today to finalise the undisclosed deal that will see Grovepoint assume more than 50% ownership and Fried and Blitz take two take seats on the Algatechnologies board.
Algatechnologies director of marketing and sales, Efrat Kat, told us the firm that remains part-owned by Kibbutz Ketura and UK company company JCA, had been seeking a cash injection to further its expansion plans.
It possesses something like 30% of the global astaxanthin supply market that is worth about €100m, according to market analysts.
“Algatechnologies made a profit last year, but we still need the investment for the major capacity expansion required,” Kat said, noting demand was outstripping current capacity.
Japan (beverages) and the US (mostly food supplements) were the strongest markets, “and recently we have seen pick up in demands in Europe as well” she said despite the fact the European Union has banned all astanxanthin health claims.
Astaxanthin is also used frequently in beauty from within products promoting skin health.
“Grovepoint believes there is significant potential to grow the range of products where astaxanthin is the key ingredient and to fully exploit the potential of microalgae derived products for other commercial applications,” said Blitz in a statement.
“Grovepoint will be making additional capital available for growing the existing business, marketing the company’s ‘Astapure’ brand around the world and investing in R&D, so that new algae derived products can be brought to market.”
Ed Hofland, chairman of Algatechnologies added: “In Grovepoint we have found a partner who shares our enthusiasm for microalgae and has a clear vision in terms of maximising its commercial potential.”
More on the European Food Safety Authority (EFSA) opinion of astaxanthin can be found here.