The $100 million BioPacificVentures fund, managed by Auckland firm Direct Capital in collaboration with the global Inventages group fund, manages $1.5 billion in the life sciences area.

The group, which invests globally (inclusive of Australasia), will bring much muscle to EnCoate, says BioPacificVentures Executive Director Dr Andrew Kelly.

EnCoate is developing a unique family of biopolymers, discovered by AgResearch at Lincoln in the late 1990s. These biopolymers stabilise microbes so that they can survive for long periods at room temperature.

EnCoate has a first product already on the market, BioShieldTM, commercialised by co-owner Ballance Agri-Nutrients. BioShieldTM allows beneficial microbes to survive when used in field applications to control grass grub.

However, the EnCoate biopolymer has much wider application. Microbes are used in many products currently, including foods and seed-coatings as well as in laboratories. Initially the capital injection will finance the development of a revolutionary line of probiotic formulations that will enhance food products.

Probiotics are microbes that have beneficial health effects on humans and animals. However, current technology limits their application to yoghurt and other milk products as they must be refrigerated.

Dr Kelly says EnCoate fitted the fund’s investment profile perfectly.

“We are focused on helping promising life science companies – especially those that operate in the area where food and health converge. EnCoate is a great example.”

Dr Kelly adds that while EnCoate’s initial focus has been on developing its technology for the agricultural sector, BioPacificVentures has suggested a wider emphasis toward more global markets.

“Probiotics, the ‘healthy’ bacteria, is one such market,” he says. “Offering much more than capital, we believe our multinational food industry experience will be very beneficial to the company. We will nominate two Directors to the Board of EnCoate, one local and one European, to add to the strong expertise at Board level.”

BioPacificVentures is funded by local and international investors with Nestlé, the world’s biggest food company, the largest investor and the largest local investor being leading agribusiness firm PGG Wrightson.

EnCoate’s goal in probiotics development is, with special formulations, to extend the shelf-life of probiotics to two years at room temperature and humidity.

Current technology does not allow probiotics to be mixed with moist or non-chilled ingredients, which considerably limits the scope of their application. EnCoate has developed a technology that can stabilise these microbes so they can be used to enhance foods such as breakfast cereals, infant milk-powders and dog-biscuits.

Bridgit Hawkins, Acting EnCoate CEO, says this opens a potentially huge global market for probiotic ingredients.

“The market for EnCoate’s probiotic ingredients will be global manufacturers and marketers of non-chilled foods that are seeking to differentiate their products in the perceptions of health-conscious consumers.”

The probiotic ingredient market is worth over US$600m annually, and is growing at a rate of 10 – 20% per annum, she adds.

The technology was developed by a team of scientists at AgResearch’s Lincoln campus near Christchurch and led by Dr Trevor Jackson of the Crown Research Institute’s Biocontrol, Biosecurity & Bioprocessing Section.