Winner, winner, salmon dinner? Calysta raises $40M en route to scale

May 2, 2017 | Jim Lane

From California arrives the news that Calysta has raised $40 million in a Series D funding led by Mitsui and including amongst its participants Temasek, Cargill, the Municipal Employee Retirement System (MERS) of Michigan, Walden Riverwood Ventures, Aqua-Spark and Pangaea Ventures. Is this a case of “winner, winner, salmon dinner”?

The When, Where, What, Why and How Much?

In November 2016 we reported that Calysta and Cargill, along with third-party investors, announced plans to invest in the creation of the world’s largest gas fermentation facility, to produce FeedKind protein. And now NouriTech, the venture formed through investments from Cargill, Calysta, Inc. and several third-party institutions, has broken ground on its 37-acre plant to produce Calysta’s FeedKind protein.

Going to Graceland: Cargill, Calysta select Tennessee for methane-to-feed project

How much? 20,000 metric tons per year of FeedKind protein initially and expanding up to 200,000 metric tons per year when operating at full capacity.

When? The facility is expected to come online in 2019.

Where? President’s Island, Tennessee — Cargill has a 69-acre property there, producing corn oil and for storage and distribution of sweetener products. Upon completion of the plant, the new venture expects to hire 75 permanent employees and expand to 160 people when the plant is at full ramp-up.

What is it? FeedKind protein is billed as a “competitively priced, new feed ingredient initially targeted as an alternative to fishmeal for the aquaculture industry”. Cargill and Calysta jointly will be marketing FeedKind protein globally.

Why? As we noted in January, “Soaring fish meal prices, a 9 billion human population on the way, and a world eating more protein per capita every day. A recipe for disaster? Along comes Calysta with a technology to turn abundant natural gas into food. And getting closer to industrialization.”

For a visual, broader Calysta backstory

For a VistaVision look at the story, try “The Methane Reformation: Intrexon, Calysta chart new pathways to economic heaven”, here.

For a more visual backdrop on the Cargill/Calysta story, try Nutrition and Energy from Methane: The Digest’s 2017 Multi-Slide Guide to Calysta.

Capping 4 Big Years for Mitsui

2017. Most recently, we reported in January that Mitsui hasn’t completely gone over to the “Sugar’s dead, Long live Methane!” camp. Toray Industries and Mitsui will invest up to $51 million to build one of the world’s largest bagasse-based cellulosic sugar plants. Producing 1,400 tons of cellulosic sugar annually that will be used as feedstock for ethanol, it will also produce 450 tons of oligosaccharides and 250 tons of polyphenol for foods and fodder when it comes online in August 2018.

2016. And we reported in February 2016 that Mitsui invested an additional CDN$25 million in the BioAmber joint venture for 10% of the equity, increasing its stake from 30% to 40%. Mitsui will said at the time that it would also play a stronger role in the commercialization of bio-succinic acid produced in Sarnia, providing dedicated resources alongside BioAmber’s commercial team. BioAmber will maintain a 60% controlling stake in the joint venture.

Mitsui invests $25M in BioAmber JV; raises stake, will “play a stronger role”

2015. We reported that Avantium signed an agreement with Mitsui & Co., Ltd. to commercialize 100% biobased chemicals FDCA and PEF in Asia. As part of this agreement, Mitsui has been granted a right to purchase a sizable volume of FDCA from the first commercial FDCA plant to be constructed by Avantium.

Avantium reserves capacity in its first FDCA production plant for Mitsui; a new thin film PEF for packaging emerges

2014. We reported in March 2014 that LanzaTech raised $60M in a first close of its series D investment round, led by Mitsui & Co. with a $20M investment. “The aim of our investment,” Mitsui’s management said at the time, “is to create a new business where Mitsui actively contributes to developing next-generation biofuels and chemicals made from waste gases. Through this investment, Mitsui is going to be involved in marketing of LT’s technology, business development and product take-off worldwide.”

Holy $60M, Batman! LanzaTech raises huge Series D round, Mitsui leads, joins board

You can learn more about Mitsui’s moves in slides from our Strategic Intent webinar last fall on Mitsui’s progress.

The Temasek backstory

Temasek has been quieter — but far from quiet — in fact, the company has been a heavy investor in Amyris, alongside Total. We reported in June 2015 that Amyris agreed on key business terms with Total and Temasek, under which these stockholders would exchange an aggregate of $138 million of convertible debt for Amyris common stock at a price of $2.30 per share. Temasek had prevously purchased up to $50M in Amyris notes in 2013-14, as we reported here.

The 3 Reasons Calysta might be Winner, Winner, Salmon Dinner

Cargill on board. Here’s one of the major ag giants, the ABCDs, leaping in on a relatively new technology, no mandate, no tariff, no tax credit in hand. Compare this to the more tepid “sometimes we’re in, sometimes we’re out” reaction to getting into the energy business.

It’s an advanced bioeconomy upside-down cake. This is a reverse from “food into fuel”. This is fuel into food. Instead of developing new applications for a traditional ag feedstock, here’s an existing application, and a feedstock that is new to ag but already abundantly at scale.

Methane’s everywhere, fishmeal’s tight. The feedstock feedstock is expected to be cheap and abundant, and a market for fish protein that is expected to be tight and expensive for some time to come. Calysta has strong energy and chemiical applications and also aims at pet and livestock feed — but fishmeal’s the breakout app from which future riches will flow.

Reaction from the stakeholders

Joining the Calysta Board of Directors from Mitsui will be Hitoshi Kudo, General Manager, Animal Nutrition Dept., Nutriscience Division, Nutrition & Agriculture Business Unit. Joining from Temasek will be Suan Swee Tan, Managing Director, Investments Agribusiness and Biotech.

“We are very pleased to welcome Mitsui and Temasek to Calysta’s strategic family of investors, supporting committed investing in products that will make a global impact,” said Tom Baruch, Executive Chairman of the Board. “Calysta’s FeedKind protein, expected to enter commercial production in 2019, can help address the world’s growing demand for new sustainable sources of protein and greater food security.

“We look forward to working with Mitsui as a strategic partner in marketing and distribution of FeedKind in important new markets (Asia) and in the expansion of FeedKind production,” Mr. Baruch added. “We also welcome the opportunity to establish a significant collaboration in Singapore with Temasek, a leader in supporting innovative technology development.”