A Durham company has secured additional capital as it nears commercialization of its first product.
Elo Life Systems has raised $20.5 million from new and existing investors, bringing the company's total Series A round to $45 million.
Novo Holdings and DCVC Bio led the funding, which included participation from Hanwha Next Generation Opportunity Fund, AccelR8 and Alexandria Venture Investments. The raise adds to a $24.5 million funding round that Elo disclosed in early 2023.
The additional capital will help Elo start scaling up production of its first product. Since spinning out of Durham-based Precision BioSciences (Nasdaq: DTIL) in late 2021, Elo has focused internally on its research and development operations. The company has reached the point where it's ready to move externally and begin producing its product at a broader scale, said CEO Todd Rands
Elo is developing a sweetener that's derived from monk fruit, which grows in remote areas of China, making it difficult to access and harvest. Using molecular farming, Elo is taking the same ingredient from monk fruit and producing it in other crops that are easier to grow at scale. This includes developing a liquid form of its sweetener using watermelons and a powder version from sugar beets.
The company is moving its product out of labs and greenhouses in Research Triangle Park and into fields, including some in North Carolina. After beginning with a few fields initially, Elo plans to contract with growers to rapidly expand and build out more acres of production.
Getting into the fields will give the company samples to get in the hands of food and beverage companies interested in using the natural, sugar-free sweetener in their products. Elo is building out this capacity as it prepares for a commercial launch in 2026, Rands said.
As it approaches commercialization, Elo continues to expand its team. The company has a headcount of 37, which will rise into the 50s over the next two years, Rands said. The company has also expanded its local footprint, securing about 50 percent more office and laboratory space in RTP. Elo now has about 25,000 square feet of office and lab space and 10,000 square feet of greenhouse space.
As it moves its sweetener forward, Elo plans to expand its pipeline, exploring other ingredients in nature that are rare or hard to produce at scale. Through its technology, Elo can develop natural, plant-derived ingredients that can replace many artificial ingredients currently used in food products.
Rands said there's an incredible demand from food and beverage companies and consumers for this type of work. And investors are buying into this vision.
"Elo’s sweetener will be a major catalyst in the effort to lower sugar in our diets, improving human health and reducing the societal burden associated with chronic diseases," said Kiersten Stead, managing partner of DCVC Bio — a venture capital firm based in California.
In addition to developing these ingredients, Elo is using its platform to protect crops from challenges, like disease and climate change.
In one project, the company has the ambitious goal of saving the Cavendish banana – the popular variety typically seen in grocery stores – from potential extinction. Elo in 2020 entered a strategic partnership with the global producer Dole Food Co. to develop banana varieties that are resistant to a fungus that's devastating to the fruit.
The company has a first wave of plants growing in Honduras, Rands said, with plans to send second and third waves of plants to Central and South America for evaluation. Elo is in talks with other companies and organizations to take on similar projects elsewhere.
"We’ve had so much focus on corn and soybeans (in the U.S.)," Rands said. "We’re going to look at fruits and vegetables around the world."
