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September 4, 2024

Finnish food tech scaleup Solar Foods sets date to go public on Nasdaq in Europe

The fermentation company hopes the move will put it on the radar of institutional investors

Finnish startup Solar Foods, which uses fermentation to develop a novel protein product that looks similar to a protein powder, is planning to go public on Nasdaq’s First North Growth in Finland next Tuesday.

The company, which was spun off from the Espoo-based Technical Research Centre VTT in 2017, announced its plans this week and said it isn’t looking to raise additional funds when going public. This is called a “technical listing”, and means the company won’t create more shares but instead only trade those that existing shareholders decide to sell, according to CEO Pasi Vainikka.

This is generally done to create liquidity for existing shareholders, as a strategy to prepare for larger fundraises in the future or to boost the profile of a company.

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Solar Foods’ biggest shareholders are cofounder and CEO Vainikka, cofounder and CTO Juha-Pekka Pitkänen, early-stage Finnish VC Lifeline Ventures — which made its first investment in Solar Foods in 2018 — and the Finnish food corporation Fazer, who all own around 10% each.

According to Juha Lindfors, managing partner at Lifeline Ventures, there is a lockup period for stakeholders with more than 5% ownership. That means investors have 180 days where trading is not allowed, and the management team have 360 days.

“We don’t have an urgent capital need and because of this, we want to go public as soon as possible. From a startup point of view, the investor audience changes completely. Before it has been venture investors — now we want to be on the institutional investors' radar,” Vainikka says. But he adds that “there will be quite a lot of liquidity in the market, since we have almost 2k small investors”.

The startup has raised €26m in the last 10 months, according to Vainikka, and won’t need another capital injection until winter. The company’s last financial report stated that “the company's current funding is estimated to be sufficient until the end of the third quarter of 2024.” The company's most recent valuation, at its latest fundraise in April 2024, stood at €75m.

Protein by fermentation

Solar Foods was founded by a group of scientists, experts in biotechnology and renewable energy, from the Technical Research Centre VTT. The company’s fermentation-made protein ingredient Solein, which it says is more sustainable than protein that relies on agriculture, is currently approved for sale in Singapore where it has launched production. Yesterday, it announced it is self-affirmed Generally Recognized as Safe (GRAS) in the US, which means it has done the research needed to make a case for being approved for sale across the States, too.

“The listing is fundamental in allowing Solar Foods to enact the next stage of its global growth strategy which involves the commissioning of Factory 02, a commercial-scale production facility, estimated to be 50-100 times larger than Factory 01 [which is based in Vantaa, Finland]. This is alongside the company's focus on investing in, developing and expanding the commercialisation of products in key markets, such as the US,” Anthony Chow, cofounder of VC firm Agronomics which first invested in Solar Foods in 2020, tells Sifted.

The company has also submitted a safety dossier to the European Food Safety Authority to be considered for approval across the EU — but Vainikka tells Sifted that he doesn’t believe the process will be complete until 2026.

He adds that the green transition requires industrialisation, and that going public and tapping institutional investors is one way to make that happen: “You either do it our way, or you do what Northvolt does and offer investors something in return [such as contracts].”

Mimi Billing

Mimi Billing is Sifted's Europe editor. She covers the Nordics and healthtech, and can be found on X and LinkedIn

Sadia Nowshin

Sadia Nowshin is a reporter at Sifted covering foodtech, biotech and startup life. Follow her on X and LinkedIn