Industrial biotech startup Cellugy announced today that it has raised €4.9 million (USD$5.3 million) in seed funding, with proceeds aimed at scaling up the production of its bio-based solution to replace fossil-based ingredients in personal care products.

Founded in 2018, Denmark-based Cellugy provides fully bio-based and biodegradable alternatives to carbon-intensive petrochemicals. The company’s platform leverages cellulose-producing microorganisms to produce high-purity, crystalline cellulose derived from the bioconversion of sugar, providing solutions to replace fossil-based materials in various industrial applications, including personal care and cosmetics, as well as textiles, packaging, and paints & inks, among others.

According to Cellugy, the new capital will be used to scale its EcoFLEXY dry cellulose product to industrial production volumes by expanding manufacturing capacity, as well as to support further product co-development partnerships to take EcoFLEXY into new application areas, and to expand the company’s IP portfolio and headcount.

Dr. Isabel Alvarez-Martos, CEO and co-founder at Cellugy said:

“Reliance on fossil-based petrochemical ingredients is today’s most critical sustainability issue in producing personal care products. With our technology, we genuinely see a future completely free from these polluting ingredients. Our mission is to develop sustainable solutions for everyday products, so we’re naturally pleased to partner with impact-driven investors.”

The round was led by Germany’s ICIG Ventures and Denmark’s Unconventional Ventures, with new, U.S.-based investor Joyance Partners joining the round, along with existing investors PSV DeepTech, The Footprint Firm, and EIFO.

Dr. Pelin Yilmaz, Investment Director at ICIG Ventures said:

“Investing in Cellugy represents a strategic step for ICIG Ventures, underlining our commitment to fostering innovations that drive sustainability in the industrial sector. Cellugy’s breakthrough in biofabricated cellulose technology not only aligns with our mission to support green technology but also promises to revolutionize the personal care industry and beyond.”