Regional Angel Investment Accelerator delivers private investment and grant funding to Bath-based start-up
Sustainable biotech innovator Kelpi has today secured both private and public sector funding to advance its pioneering technology creating bioplastics from seaweed. Kelpi’s compostable bioplastic packaging for food is now a step closer to the supermarket shelves, replacing single-use fossil fuel plastics which take hundreds of years to decompose.
Kelpi has closed a pre-seed round led by Bristol Private Equity Club (BPEC) combined with a linked Innovate UK ‘Combined Investor Partnership’ grant landed through SETSquared’s highly successful Regional Angel Investment Accelerator (RAIA) programme.
Kelpi will use the funds to scale up the development of prototype bioplastic packaging that is compostable, marine-safe and carbon-negative. Over the last year the company has been developing solutions in the laboratory to replace single-use fossil fuel plastics with high-performance bioplastic made from seaweed.
“This landmark investment enables Kelpi to advance its work as one of just a handful of companies worldwide using seaweed to create entirely new bioplastic packaging solutions,”
said
Kelpi co-founder and CEO Neil Morris.
“We set out to play a part in eliminating plastic pollution and enabling net zero. This funding will allow us to accelerate progress towards achieving that goal using seaweed - a natural, renewable biomass that has huge potential to sequester carbon and sustainably address climate change.”
The investment represents the first significant investment of BPEC’s new Seed division focused on early-stage businesses. BPEC Seed’s Pete Lockett said:
“Kelpi stood out to us as a strong combination of world-leading scientific innovation with great entrepreneurial experience. Co-founders Neil, Murray and Chris have established a business which can deliver profit and purpose, playing a vital role in addressing climate change and impacting on plastic pollution.”
Jerry Barnes, founder of BPEC said:
“As the largest and most active Angel Investor in the South West, we are delighted to once again invest in a highly innovative SME in the region that can become a world-leader with the right support. Our Seed division was set up this year specifically to enable our members to support start-ups and it works well alongside the RAIA programme.”
As a SETsquared Scale-Up Programme member, Kelpi, benefitted from the Regional Angel Investment Accelerator (RAIA) scheme delivered by SETsquared and funded by Innovate UK, the UK’s innovation agency, which aimed to simplify, de-risk and accelerate public/private co-investment into ambitious, deep-tech businesses. To date, the programme has supported nine companies (including Kelpi) to raise £820K of Innovate UK grant funding which leveraged £2m Angel equity investment. Rosie Bennett, SETsquared Investment Manager, said:
“Once again the RAIA programme has demonstrated that we have a strong pipeline of highly innovative deep tech businesses in the Southwest. Kelpi is a great company that will now benefit from the combined funding of committed angel investment and grant-funding to further their exciting and vital work to replace fossil fuel plastics in packaging in the UK and worldwide.”
SETsquared will soon be delivering a second phase of RAIA, with a co-investment fund of £2m, to leverage further Angel investment in a new cohort of deep-tech businesses.
The funding round was managed on the FounderCatalyst online platform, which helps UK start-ups complete all the necessary legal paperwork and engage with potential investors. Sam Simpson, FounderCatalyst COO said:
"We’re delighted that Kelpi chose us to navigate the steps necessary to successfully execute their pre-seed round efficiently and effectively without impacting on their time to run the business.”
Kelpi will use the investment to prototype packaging solutions for a range of clients primarily in the food industry. Kelpi focuses particularly on thin films which have some of the lowest recycling rates of any plastic, with less than 1% being recycled in the UK according to WWF (2018 report).
Right now more than 99% of plastics are produced from chemicals derived from oil, natural gas and coal — all of which are dirty, non-renewable resources. If current trends continue, by 2050 the plastic industry could account for 20% of the world’s total oil consumption, according to the United Nations Environment Programme.
Kelpi already has sourcing agreements in place with seaweed suppliers in Europe, as well as Asia where most of the world’s seaweed is currently cultivated.