Fermentation startup Cauldron banks another $9.5 million in Series A

- March 19, 2024 2 MIN READ
Michele Stansfield
Cauldron CEO and cofounder Michele Stansfield
Regional NSW startup Cauldron has raised in $9.5 million (US$6.25m) in Series A for its fermentation technology, which hopes to transform how new foods and fibres are developed.

The round was led by existing US investor Horizons Ventures, supported by CSIRO-backed Main Sequence, which also backed last year’s Seed round, as well as new supporters US climate tech fund SOSV and the CIA’s venture fund In-Q-Tel.

But the size of the raise for a Series A suggests the glory days of VCs throwing cash at the wall in the hope it sticks may be over. It’s just 12 months since Cauldron raised $10.5 million in a Seed round led by Main Sequence and Horizon. It’s rare for startups to raise a smaller amount of capital in early follow-on rounds.

While Cauldron CEO and cofounder Michele Stansfield did not disclose a valuation for the latest raise, she said it’s an increase on the Seed round.

Cauldron’s continuous fermentation technology, dubbed “hyper-fermentation”,  uses a new bioreactor design and growth medium formulation to improve the economics of large scale fermentation production, thus making new bio-based products more cost-effective.

The fresh capital will be used to develop proof cases around the application of its hyper-fermentation technology, and finalise partners and plans for a 500,000 litre facility. The startup currently has a 25,000-litre facility in Orange,  260km west of Sydney.

Current fermentation is done in short-term “batch” production, while Cauldron has successfully run a 10,000 litre production system continuously for more than eight months without contamination or “genetic drift” of the microbes—two of the biggest challenges in running long-term fermentation. Continuous operation means it can out-produce traditional batch systems five times larger with its smaller, far less costly bio-reactors.

Michele Stansfield said Cauldron’s long-term plan is to build plants around the world to deliver hyper-fermentation production for partners in bio-based products.

“Cauldron has proven its precision fermentation at an industrially relevant scale, unlocking a significant decrease—between 30 and 50% —in the cost of goods for our customers vs. traditional batch fermentation,” she said.

“From biofuels and agriculture to cosmetics and chemicals, the opportunities are immense, and with the support of our incredible investors, we’re poised to capitalise on them.”

Stansfield helped develop Cauldron’s technology as the general manager at Agritechnology, which spent 35 years researching and developing continuous fermentation systems for the agricultural market in Australia. Cauldron acquired that fermentation IP with its 2023 Seed round to commercialise and scale the technology globally.

Chis Liu of Horizons Ventures said precision fermentation is amazing because of the wide range of potential applications

“To date, the technology has been hamstrung by its costs compared to conventional production methods, but Cauldron’s unique solution significantly improves the competitiveness of precision fermentation both in capital and operating expenditure,” he said.

SOSV general partner and IndieBio MD is also a fan of the work Stansfield’s done.

“The benefits of the technology—the ability to continuously produce, up to 50% lower net unit costs, and 20% more output with 45% less capex—dismantle a major obstacle for the industry and position the company as a critical manufacturing partner for companies building a more sustainable future,” he said.