Sources inform "Globes" that Israeli agro-technology company CBD Technologies is raising $5-10 million in its second financing round. The round will probably be held in two stages.
CBD was founded in 1995 on the basis of technology developed by Dr. Oded Shoseyov at the Hebrew University of Jerusalem. The company's intellectual property belongs to Yissum Research Development Company of the Hebrew University. Supplementary technology was purchased from the University of British Columbia, a partner in CBD.
CBD's technology platform is based on the CBD molecule, which serves as a molecular glue that sticks to cellulose. The molecule separates wood fibers and enables wood cells to grow without interruption. Using the technology increases the length of the fibers by 116%; the company asserts the resulting fibers are also stronger.
CBD has signed an a licensing agreement for its first product with Novozyme, a subsidiary of Danish company Novo Nordisk, which used the technology in detergents and textiles.
CBD has also developed technology on this platform for increasing the growth rate of trees and various plants; this technology is the company's current business focus. According to CEO Dr. Stanley Hirsch, penetration of the gene responsible for creating the CBD molecule could increase the rate of growth several times over.
In 2001, CBD signed a $5-6 million strategic cooperation agreement with Suzano, Brazil's largest forestry company. The sum will be received when the development targets are reached, and Suzano will also received a stake in CBD. The goal of the joint venture is to manufacture and market a genetically engineered eucalyptus tree for the South American paper and wood industry. The marketing profits will be distributed equally between the two partners.
Another use of the CBD molecule is to change the surface features of paper, for example strengthening it and making it water resistant. The applications are designed mostly for packing industry materials. This application is still in the pilot stage.
CBD has raised $16 million to date. The company raised $2 million in its first round, in which some of the founders, the Calyx fund of Canada, Dovrat Shrem (through the Polaris I Fund), and private investors participated.
CBD raised $9.6 million in 1997-1998 from the Biomedical Investments, Challenge (Etgar), Pamot, Inventech Industrial Ventures, and Comsor Investment funds. Dow Chemicals, a division of giant Dow concern, also has stake in CBD. CBD is located in the Tamar Industrial Park in Rehovot.
Published by Israel's Business Arena on March 25, 2002