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Food-tech company Phytolon has secured $23.6 million in Series B financing to accelerate the commercialisation of its fermentation-derived natural food colours in the US, as consumer brands increasingly seek alternatives to synthetic dyes.

The three-stage financing round was led by an undisclosed strategic investor and reflects mounting global demand for high-performing, sustainable natural colour solutions. Existing investors participating in the final stage of the round included Millennium Foodtech, NextGen Nutrition Investment Partners (NGN), Colorcon Ventures and Yossi Ackerman.

The funding comes on the heels of a major regulatory milestone for the company. Earlier this year, the US Food and Drug Administration approved “Beetroot Red,” Phytolon’s first fermentation-based natural colourant, although the effective date remains subject to FDA administrative procedures.

Phytolon’s Beetroot Red is produced by fermenting baker’s yeast and is designed to address several persistent challenges associated with conventional natural colours, including cost, supply reliability and performance stability. The company says the ingredient meets the clean-label expectations increasingly demanded by both consumer packaged goods (CPG) manufacturers and consumers.

Halim Jubran, co-founder and CEO of Phytolon, said: “This new funding will be allocated to support sales and supply to CPGs and to distribution partners in the US and beyond. I am excited to see our portfolio of strategic investors increase, enabling us to grow our business and establish our footprint in the market.”

The investment highlights continued momentum behind fermentation-enabled ingredient technologies as food manufacturers respond to tightening regulatory scrutiny of artificial dyes and growing consumer preference for naturally sourced ingredients.

James Cali, general partner at NGN, said: “Phytolon is at the nexus of two mega-trends, consumer and regulatory demand to remove artificial dyes and advances in fermentation to offer natural ingredients with better functionality, cost and sustainability. With a strong network of strategic partners and recent FDA approval, Phytolon is well-positioned to capitalise on the transition toward natural dyes across food and supplement products.”

Founded in Yokne’am, Israel, Phytolon develops precision fermentation-based colour systems using two core pigments – yellow and purple – that can create a broad range of shades spanning yellow, orange, red, pink and purple.