Israeli sugar reduction company DouxMatok has announced the completion of a $22 million financing round. DouxMatok has developed sugar that is sweeter than the existing sugar in the market, making it possible to reduce the amount of sugar in food. The company plans to use the money it raised to launch its products by the end of the year and market them in 2020.
DouxMatok has developed a molecule that improves the absorption of sugar. As a result, a small quantity of sugar can give consumers the same sweet taste. The company is already in touch with food companies that use sugar with the aim of having its sugar included in their products. Marketing in Europe will be through Sudzucker, one of Europe's leading sugar marketers.
DouxMatok cofounder and CEO Eran Baniel says, "Over the past year, we participated in a number of pre-competition projects involving major food companies in Europe and supported by the European Union for developing low-sugar and low-calorie food. The cookie we made got a higher rating in consumer tests than the existing product. We put less sugar in, and in order to preserve the texture, we replace it with nutritious fibers and proteins with a significantly lower calorie content that that of sugar." So far, the company has developed a low-sugar cookie, and is now developing low-sugar chocolate. These products were developed for a consortium of drug companies, each of which can now develop its own version of the product under the agreement it signs with Sudzucker and DouxMatok.
Baniel says that DouxMatok is now also negotiating to sign a marketing agreement in the US. "The US sugar market is very different from the one in Europe, because is features quotas and a strong farmers' lobby, but there, too, we are already at the stage of producing tons of sugar in order to demonstrate our capability to farmers."
DouxMatok is currently at the scale-up stage for its production facility, and believes that its products will be marketed by the end of this year. "I learned that the most important thing in a consumer product is the taste. The health values are only a bonus for the consumer. Fortunately, we succeeded in devising a product that wins taste tests and still gets a green mark from the Ministry of Health (red means unhealthy food, yellow means not recommended, and green means consumable, G.W.). You no longer have to tell your child spreading chocolate on bread, 'Don't put much on.' Today's cookie has 18-38% sugar; we're talking about 10%."
The financing round was led by BlueRed Ventures from Singapore, which frequently invests in Israeli ventures. "They are very important to us, because one of the investors in the fund, Jacob Robbins, is a leader in the global sugar industry and organizes two international sugar conferences," Baniel says. Veteran investment fund Jerusalem Venture Partners (JVP) also invested in the round. "This investment is important to us, because they specialize in foodtech, and are setting up a special fund for the sector," Baniel explains. The leading investor in DouxMatok's previous round, Pitango Venture Capital, also took part in the new round. Pitango recently announced the founding of a special fund for the life sciences, which will also invest in foodtech.
Sudzucker, DouxMatok's marketing partner in Europe, also invested in the financing round. "Another strategic investor in the round is Royal BSM, one of the world leaders in food ingredients," Baniel says. Other investors are Singha Ventures, a corporate venture fund of Thai company Singha Corporation, French venture capital fund La Maison, and other foodtech funds.
Field of activity: Sweeter sugar
Founder: Eran Baniel
Financing rounds to date: $31 million, including the current round
Investors: JVP, BlueRed Partners, Pitango Venture Capital, OurCrowd, Singha Ventures, Royal DSM, Foodlab Capital, BOTV Capital, and La Maison
Published by Globes, Israel business news - en.globes.co.il - on June 19, 2019
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