As part of seed financing eCAPITAL entrepreneurial Partners AG’s Gründerfonds Münsterland and High-Tech Gründerfonds II (HTGF) have made a seven-figure investment in Cysal GmbH. The spin-off from University of Münster (WWU) will use the funds raised to accelerate business development, set up biotechnological mass production of dipeptides and launch the first finished products on the market.
“There is great worldwide demand for improving the effect of nutraceuticals or cosmetics via innovative supplements. With its patented biotechnological process for the production of dipeptides Cysal GmbH has a clear unique selling proposition on this market,” says Marcel Vonnahme, Investment Manager of eCAPITAL AG. Now, the partners aim to successfully enter this growing market.
In many cases proteins and free amino acids are currently being used in the production of food supplements or cosmetics, for instance. Dipeptides, or the combination of two amino acids, are in many areas of application superior to both proteins and amino acids, but the chemical manufacturing process for these combinations is expensive and time-consuming. By contrast, Cysal produces dipeptides by means of a biotechnological manufacturing process which has distinct advantages: “With its biotechnological expertise the company possesses the skills required to produce these substances quicker, inexpensively and resource efficiently than is the case in conventional production methods,” explains Vonnahme.
The other strengths of Cysal GmbH are research and development at the highest level as well as strong international connections, especially to market leaders in the Arab world, in the pharmaceuticals, food supplements and cosmetics sectors as well as in the field of veterinary medicine. Cysal also enjoys the support of many national and local cooperation partners such as Menapharm Deutschland GmbH and Cilian AG in Münster.
Cysal has developed bacterial strains that can produce cyanophycin (CGP) on an industrial scale within a short period of time – on a purely biological basis. In nature this process takes place, for example, in blue-green algae (cyanobacteria), but yields are too low for commercial exploitation.
Cysal subsequently extracts arginyl aspartate and lysyl aspartate from CGP. Unlike other industrial products consisting of only amino acids or mixtures, dipeptides are fixed combinations composed of only two amino acids each. “Dipeptides are considerably better absorbed by the body than amino acids, via the intestines or through the skin, for example,” explains Dr. Ahmed Sallam, Managing Director of Cysal GmbH.
These dipeptides are used as base materials for the production of end products. The company has already developed initial formulas for an energy tonic, a skin cream, fish food and infusion agent. Initial agreements for these products have already been concluded with distribution partners. In addition, marketing of the dipeptides as raw materials in the food, pharmaceuticals and cosmetics industries as well as out-licencing the process is conceivable.
Together with eCAPITAL, HTGF participated to an equal extent in the seed financing. “Cysal has a patent-protected platform technology and dipeptides are a relevant component to many partners in the chemicals industry. In addition, this case is a good example of how a market-relevant product can develop from basic university research,” says Dr. Matthias Dill, Investment Manager at High-Tech Gründerfonds.
In a first step Cysal wants to use the funds raised to start up production in cooperation with a service provider. “Moreover, in the mid term we are planning to set up our own production capacities at the Technology Park in Münster,” explains Sallam. Sallam founded Cysal together with Dr. Martin Krehenbrink from the University of Oxford in June 2012.
About Gründerfonds Münsterland
Gründerfonds Münsterland brings experienced investors and successful entrepreneurs from the region together and provides young technology companies up to €500,000 of growth capital in Series A financing. The fund has a volume totalling approx. €8 m and invests in high-growth companies in the sectors of bio/nanotechnology, life sciences, process engineering, new materials, information and communications technology, medical technology, mechanical engineering and industrial engineering. The start-up fund was initiated by NRW.Bank, Sparkasse Münsterland Ost, Sparkasse Westmünsterland, Kreissparkasse Steinfurt and eCAPITAL AG, which took over management of the start-up fund. Further investors of Gründerfonds Münsterland are selected successful entrepreneurs from the region supporting the fund with their network.
About eCAPITAL entrepreneurial Partners AG
eCAPITAL entrepreneurial Partners AG is a venture capital company with head offices in Münster which since 1999 has been actively investing in innovative entrepreneurs in promising industries. The focus lies on quickly growing companies in the sectors of renewable energies, renewable raw materials, resource-saving processes, water technologies as well as process engineering/new materials and IT. eCAPITAL currently administers five funds with subscription capital of over €120 m and invests throughout Germany in companies in the later stage and early stage phase as well as in “small SMEs”.
About Cysal GmbH
Cysal GmbH uses an internationally patented, biotechnological process to produce the dipeptides arginyl aspartate and lysyl aspartate on an industrial scale. The biotechnology company uses these dipeptides, the combination of two amino acids, as the base material for the manufacture of finished products developed in-house as well as energy tonics, skin creams, fish food and infusion agents. The company was formed in 2012 as a spin-off from the Institute for Molecular Microbiology and Biotechnology at Westphalian Wilhelms-University in Münster. The Managing Director, Dr. Ahmed Sallam, founded Cysal together with Dr. Martin Krehenbrink of the University of Oxford.
Since 2001 Sallam has been conducting research as a member of Dr. Alexander Steinbüchel’s team at the University of Münster. Within the framework of several on-going research projects Sallam worked on cyanophycin biopolymer and the dipeptides produced from it. The pre-start-up phase was successfully completed through the continued support of his mentor, Dr. Steinbüchel, and among other things, an EXIST Founder Scholarship from the German Federal Ministry of Economics and Technology and the European Social Fund. During this time an industry-ready production process for dipeptides was developed, registered for a patent and the first formulas and prototypes for finished products were generated. Following active support from the Rector’s Office of WWU Münster and Department 6 in the person of Dr. Katharina Steinberg as well as competent advice given by Dr. Katharina Krüger and Ms. Janita Tönnissen of the AFO research transfer office and by Ms. Kordula Kruber (PROvendis GmbH), Sallam founded Cysal GmbH with Krehenbrink in June 2012.
About High-Tech Gruenderfonds
High-Tech Gruenderfonds invests in young, high potential high-tech start-ups. The seed financing provided is designed to enable start-ups to take an idea through prototyping and to market launch. Typically, High-Tech Gruenderfonds invests EUR 500,000 in the seed stage, with the potential for up to a total of EUR 2 million per portfolio company in follow-on financing. Investors in this public/private partnership include the Federal Ministry of Economics and Technology, the KfW Banking Group, as well as thirteen industrial groups of ALTANA, BASF, B. Braun, Robert Bosch, CEWE Color, Daimler, Deutsche Post DHL, Deutsche Telekom, Evonik, Qiagen, RWE Innogy, Tengelmann and Carl Zeiss. High-Tech Gruenderfonds has about EUR 563 million under management in two funds (EUR 272 million HTGF I, EUR 291 million HTGF II).
Advisors of this financing round:
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