Phytolon closes $23.6M Series B to commercialise fermentation-based food colours in the US
What's the deal? Phytolon, an Israeli biotech startup that makes natural food colours through fermentation, has closed a $23.6M Series B round to commercialise its products in the US. The round was led by an undisclosed strategic investor, with participation from existing backers including Millennium Foodtech, NextGen Nutrition (NGN), Colorcon VenturesDealroom has a profile for this one. Try Dealroom →, and Yossi AckermanDealroom has a profile for this one. Try Dealroom →.
The company's first product, Beetroot Red, is a natural colorant produced by fermenting baker's yeast. It recently received US Food and Drug Administration (FDA) approval, though the agency has not yet set an effective date for its final ruling.
"This new funding will be allocated to support sales and supply to CPGs and to distribution partners in the US and beyond," said Halim Jubran, co-founder and chief executive officer of Phytolon.
Why now? Two forces are converging. Consumer demand for natural ingredients is surging — natural colour usage in food and beverage launches grew 9% between 2021 and 2025, according to Innova Market InsightsDealroom has a profile for this one. Try Dealroom →. At the same time, the "Make America Healthy Again" political movement and tightening FDA scrutiny have put artificial food dyes squarely in the crosshairs of US regulators.
"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," said James Cali, general partner at NGN.
What could go wrong? The FDA has approved Beetroot Red but hasn't finalised its ruling timeline, which could delay commercial launch. Phytolon also faces competition from established players like GNTDealroom has a profile for this one. Try Dealroom → (maker of Exberry plant-based colours) and California Natural Color, both of which are expanding their natural colour portfolios globally.
Fermentation-derived ingredients still need to prove they can match the cost and scale of synthetic dyes to win over large consumer packaged goods companies.
The signal: Phytolon's investor mix — spanning a foodtech investment fund (Millennium Foodtech), a corporate backer (NGN), a pharma-adjacent venture arm (Colorcon Ventures), and an angel investor — signals broad conviction across the value chain that fermentation-derived colours are ready for commercial scale. Classified as a "breakout" stage company on Dealroom, Phytolon is hitting the US market at a moment when regulatory and consumer tailwinds are aligning faster than incumbents can reformulate, giving precision fermentation startups a rare timing advantage.
Read more: foodingredientsfirst.com
