Agronomics invests $10m in Liberation Labs in $12.5m financing round

In a significant development in the field of cellular agriculture and biotechnology, Agronomics (LSE: ANIC), a front-runner listed company in this innovative sector, has announced its strategic investment of US$ 10 million into Liberation Labs Holding Inc. This investment is a pivotal part of a broader US$ 12.5 million financing round, which also sees the participation of existing investor Siddhi Capital. This move is aimed at bolstering the construction of Liberation Labs’ facility in Richmond, Indiana, marking a crucial step ahead of the company’s anticipated Series A round.

This financial injection by Agronomics into Liberation Labs was facilitated through a Secured Convertible Promissory Note (SCPN), a convertible debt mechanism, earmarked for the continued development of Liberation Labs’ biomanufacturing capabilities in anticipation of a Qualified Financing. The SCPN is set to transform into an instrument mirroring the terms of the forthcoming financing round, expected to rally a minimum of US$ 37.5 million via a blend of debt and equity financing, drawn from Agronomics’ cash reserves.

To date, including this recent SCPN, Liberation Labs has successfully raised US$ 33.5 million through equity-linked instruments. Furthermore, the company has secured non-dilutive funding commitments amounting to an additional US$ 55 million, inclusive of US$ 30 million in equipment financing and a US$ 25 million loan from Ameris Bank, supported by the U.S. Department of Agriculture’s Business and Industry Guaranteed Loan Program.

Liberation Labs aims to establish itself as a global leader in the industrial biotechnology sector. It is focusing on the design, construction, and operation of Bio3, a state-of-the-art biomanufacturing platform. This initiative is designed to tackle the critical challenges faced by fermentation companies, addressing a significant bottleneck in the industry. The construction of Liberation Labs’ inaugural facility, which commenced in June 2023, is projected to feature 600k liters of fermentation capacity upon completion. Positioned in Richmond, Indiana, the site offers potential for expansion, potentially adding an additional 4 million liters of capacity, chosen for its strategic advantages including sugar input access, utility rates, labor costs, and a supportive regulatory and incentive landscape.

Including the recent SCPN, Agronomics’ total investment in Liberation Labs amounts to US$ 17.6 million, which, pending audit, is valued at £25.7 million. This stake constitutes roughly 14.8% of Agronomics’ last disclosed Net Asset Value, post-adjustments, equating to a 37.5% ownership on a fully diluted basis.

Statements from key figures highlight the significance of this investment. Mark Warner, CEO and Co-Founder of Liberation Labs, expressed gratitude for the continuous support, emphasizing the progress in operational build-out and the installation of critical equipment. Jim Mellon, Executive Chairman of Agronomics, lauded Liberation Labs’ milestone achievements and expressed confidence in the venture’s path to becoming cash generative.

As the year ended on December 31, 2023, Liberation Labs reported a loss of US$ 7.1 million with net assets totaling US$ 12.7 million, underlining the high-stakes, high-reward nature of pioneering biotechnology advancements.

This strategic investment by Agronomics not only underscores the potential of cellular agriculture and precision fermentation technologies but also signals a strong vote of confidence in Liberation Labs’ vision and capabilities to revolutionize the production of bio-based consumer products on a global scale.

The investment in Liberation Labs by Agronomics represents a significant milestone in the advancement of cellular agriculture and biotechnology. It underscores the growing interest and confidence in precision fermentation as a sustainable and scalable solution to meet global consumer product demands. This financing round not only propels Liberation Labs closer to its ambitious goals but also solidifies Agronomics’ position as a key player in the future of food and biotechnology investments.