Phytolon raises $23.6M to sell natural food colours as US bans synthetic dyes
What's the deal? Phytolon, an Israeli biotech startup making natural food colours through fermentation, has closed a $23.6M Series B to commercialise its products in the US and beyond. The round was led by an undisclosed strategic investor, with participation from existing backers including NextGen Nutrition, Colorcon Ventures, Millennium Foodtech, and Yossi Ackerman.
Most of the funds were secured in April 2025. The company plans to use the capital to support sales and supply to consumer packaged goods companies and distribution partners.
Why now? The timing is driven by a regulatory tailwind. The FDA earlier this year approved "Beetroot Red," Phytolon's first product — a natural colorant produced by fermenting baker's yeast. An effective date for the final ruling is yet to be set.
Consumer and regulatory pressure to remove artificial dyes from food is intensifying across the US. That's creating urgent demand for natural alternatives that can match synthetic dyes on performance, cost, and scalability.
What could go wrong? The FDA's final effective date for Beetroot Red remains uncertain, which could delay commercial rollout. Phytolon also faces competition from other fermentation-based ingredient companies racing to fill the same gap.
Scaling fermentation-based production to meet CPG demand is notoriously difficult. Cost parity with cheap synthetic dyes — still dominant in many categories — will be a key test.
The signal: This raise sits at the intersection of two converging trends: tightening regulation of artificial food additives and the maturation of precision fermentation as a manufacturing platform. "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.
Founded in 2018 within the Trendlines incubator in collaboration with the Weizmann Institute of Science, Phytolon is led by co-founders Dr. Halim Jubran (chief executive officer) and Dr. Tal Zeltzer (chief technology officer). Trendlines and its major shareholder, Consensus Business Group — wholly owned by Vincent Tchenguiz — are significant shareholders.
As US regulators move to restrict synthetic dyes, startups like Phytolon that can offer drop-in natural replacements at scale stand to capture a fast-growing market.
Read more: PR Newswire · The Trendlines Group
