Jellatech, a Raleigh startup making lab-grown collagen, has raised $3.5 million to scale up.
CEO Stephanie Michelsen said the round is the equivalent of “filling up the car with gas.”
“We’re ready to go,” she said.
Collagen is a protein found in animals. Jellatech is trying to reinvent it through complex science at its small lab in Raleigh. The company wants to sustainably commercialize animal-free proteins for applications in a variety of sectors, from health care to food and beverage.
The firm has already sent its samples out “across the world.”
“The feedback we’re getting is, this is legit, this is real collagen – except we grew it in the lab,” she said. “It’s so awesome to get that validation and the fresh capital to scale it up and move the needle up for what we’re doing.”
Michelsen estimates the round gives the firm nearly two years of runway, depending on how quickly it scales. The seven person team is also growing as a result. Michelsen expects to add a few workers to the science side of the business, as well as a vice president of business development.
In the meantime, partnership negotiations continue – in multiple industries.
Michelsen said conversations are ongoing with firms in the nutrition supplement arena, the biomedical space and with global collagen and gelatin manufacturers. Jellatech’s first commercialization target will likely be the R&D space because there are fewer regulatory hurdles, she said.
“It’s also low volume – it’s something we can do with the scale we’re moving into,” Michelsen said.
The company is also looking for a larger space. Jellatech is eyeing locations in the Morrisville area and has “narrowed down the list on a few different spaces,” she said.
As for the round itself, it took time to close. The lead investor, Nordic-based byFounders, reached out in the spring – but, as with many startups in the current funding environment, it’s taken persistence to get the full $3.5 million, Michelsen said.
“We’re super excited, especially with how the whole macroeconomic environment has been,” she said.
Other backers in the round included Milano Investment Partners, Joyful VC, Siddhi Capital and Blustein.
Previously, Jellatech raised money through SAFE notes. SAFEs – simple agreements for future equity – are intended to be converted to equity at a later date, similar to convertible notes. But unlike convertible notes, they are not loans and have no defined maturity date or interest rate, meaning there is no specific timeline to pressure a company to convert it into equity during a fundraising round, which is why it can be a preferred vehicle for early-stage entrepreneurs.
The latest raise is the first real seed round for the company, and could precede a Series A.
