A Queensland startup being created by the CSIRO has announced a $3 million investment round to commercialise a synthetic version of lactoferrin, an immune-boosting protein found in breast milk that is rarely included in baby formula as it takes 10,000 litres of cow's milk to produce just 1kg.
Founded by Siobhan Coster and utilising the precision fermentation expertise of the CSIRO, Eclipse won the Judge's Award at the University of Queensland's (UQ) annual ilab Accelerator Pitch Night last week at The Tivoli in Brisbane.
Dietitian and UQ MBA graduate Coster told Business News Australia she was motivated by the prospect of "enabling accessibility to such a crucial nutrient throughout the world", while at the same time reducing dependence on animal farming and its related carbon emissions and water footprint.
"The prices of lactoferrin fluctuate like absolute crazy – I’ve had people say it’s like something on the stock exchange because it can go from $1,000 a kilogram to $5,000 a kilogram," she said.
"It means that there’s a lot of barriers around our ability to be including this amazing nutrient in more products, even outside infant formula because it has such great functionality.
"COVID has really been a big driver, a big market pull for for the need for more lactoferrin because it’s got these amazing immune boosting properties - we're seeing particularly in Asia there’s a huge demand."
Addressable ingredients market to grow by $300 billion
Coster told the pitch night the protein was so scarce and expensive that it was "absent" in infant formula. Given the sharp drop-off in breast milk-exclusive diets for babies in Australia by the time they reach five months, around 85 per cent of them are "missing out on this crucial nutrient".
"We already have letters of intent from customers that want to purchase our lactoferrin and we’re cementing our go-to-market partners," she said.
"What is more, our partnership with CSIRO gives us IP protection and the ability to outscale our competitors with world class facilities and scientists.
"Our revenue projections are projected to reach at least $90 million by 2027 from lactoferrin alone," she said, adding the protein would be the first of many ingredients Eclipse develops and takes to market.
She told the pitch night precision fermentation was sustainable, scalable, and animal-free.
"We do this by taking the DNA of the nutrient that we want and adding it to yeast. We combine that with sugarcane in a fermenter, and as it grows it makes the nutrient using a fraction of the land, water and carbon with no sacrifice to quality and without a single animal," she said.
"We have assembled a world class team including some of CSIRO’s top scientists to reshape the future of our food system."
"The ingredients we make will be added to food, drinks and supplements – a market experts tip will grow by $300 billion in the next six years. That is $300 billion of ingredients that do not yet exist."
Career journey aligns health and nutrition passions with business
Coster's path to founding Eclipse began with a passion for food and nutrition that led her to study nutrition and dietetics at Monash University in Melbourne. But after working as a dietitian for a few years in Australia, the daughter of a bookmaker found she had an urge to be involved in business.
"My father was a bookie and I got my bookie licence as well when I was in my early 20s, so I think it was also being exposed to having that autonomy and family-run business, and obviously managing risk within the bookie environment," she said when asked about what may be behind her entrepreneurial spirit.
She then moved to London in 2013 to pursue something completely different, landing a role at boutique financial consultancy firm DRS which she helped grow over the course of five years.
"That really gave me an incredible insight into running a business. I was involved in a lot of the internal business operations, also around strategy and around client relationship management. I just love building a business," she said.
"But I realised as well though that as much as I was loving the commercial side of the business, I wasn’t feeling the passion in the industry."
In 2019 she returned to Australia and applied herself in the e-commerce industry, founding Cozio Organic which sells sustainable products such as menstrual cups and reusable makeup pads.
"I had a little crack at that, got the website up as well, but it just wasn't giving me that that fulfillment with my passion around health and nutrition, Coster said.
"That led me to study an MBA at UQ, and basically I entered that journey not really knowing what I was going to get out of it but just knowing I was in a discovery phase. I really wanted to try to align my passion of health and nutrition with business.
"Serendipitously, CSIRO were in partnership with UQ for one of the major courses that I took, which was the Entrepreneurial Capstone and that was led by Cameron Turner."
Turner has founded four startups commercialising innovations such as the probiotic drink PERKii, and Coster explained he teaches courses with the "lean startup" methodology that she has sought to apply with Eclipse.
As a partner with UQ, representatives from CSIRO told her she would have the opportunity to pitch a business idea and take it to the next level if she can formulate an opportunity and validate the market need.
"When I finished my MBA I pitched to CSIRO and continued to work with them to get internal funding," she said.
"We won that internal funding in October of last year, which allowed me to come on board as a full-time entrepreneur in residence, and basically work with CSIRO to make this business a reality with the intention of me being CEO at the end of it.
She said the partnership formed a company creation model similar to v2foods involving the CSIRO as the research partner, an investor and a founder that all come together "with the intention of making it the next big thing".
"This capital raise is really going into the research and development, upscaling from lab to pilot to commercial scale," she said.
"It’s not nearly enough money to be able to create a facility, so what we will be doing is partnering with contract manufacturing facilities that have these bioreactors, and that ability to do commercial scale precision fermentation.
"This is deep tech, so deep tech is a long development process. We've got a lot of work ahead of us from the R&D side of things, but we're aiming for that commercial product in 2024."
Eclipse joins accomplished list of ilab alumni
As a culmination of the three-month UQ Ventures ilab Accelerator program, Eclipse was one of 11 startups that pitched last week to a panel of experts and a sold-out audience of students, investors, and innovators from Queensland’s entrepreneurship ecosystem.
Other pitches included Uuvipak which replaces single-use plastics with organic food waste, an audio storytelling platform called Vacayit for blind and low vision tourists, and visual aid creation software Graphics et al.
Entertainment and fintech startup The Network Loop was also recognised on the night, taking home the People’s Choice award. By combining equity crowdfunding with entertainment, The Network Loop aims to make startup investing and raising capital more accessible.
Pitch night judge Professor Sarah Pearson, an investor at Main Sequence Ventures and non-executive director at RACQ, celebrated the diversity of the 2022 cohort.
“These are really exciting businesses that are creating change in the world. You have a group of fabulous women who have pitched here tonight and who are building their businesses – and who will change the world,” she said.
Head of Ventures Nimrod Klayman was extremely impressed by the quality of both the pitches and business ideas.
“We are committed at UQ and in Ventures to continue supporting and growing the UQ founders community,” Klayman said.
“The number of fierce female founders on stage was a result of hard work that started with different early-stage entrepreneurship activities that resulted in providing the right environment for females founders to thrive at UQ!"
Since UQ took over the ilab program from the Queensland Government in 2012, more than 230 startups have gone through its accelerator and incubator programs. Notable alumni include hearing tech company Audeara (ASX: AUA), deployment automation software group Octopus Deploy, and gut microbiome life sciences company Microba. Andrew Barnes, co-founder of Go1, also went through the accelerator with another startup before starting the edtech unicorn to-be.
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