Hot-spring algae startup ONSOH lands convertible-bond funding from Funds Startups
What's the deal? ONSOH, a Beppu-based biotech developing a livestock and aquaculture feed additive from hot-spring algae, has raised convertible-bond financing from Funds StartupsDealroom has a profile for this one. Try Dealroom →. The money came from Funds Startups' Funds Venture Debt Fund No. 2. Terms and the amount were not disclosed.
What does ONSOH do? It extracts a natural ingredient, called RG92, from a microalgae strain that grows in the high-temperature, mineral-rich waters of Beppu's hot springs. The additive targets gut health and immunity in cattle, pigs, chickens, and farmed fish, and is being tested with universities and producers.
What's the money for? Chief executive officer Akisuke Matsumura said ONSOH will "strengthen research, development, and sales," expand domestic adoption, and deepen ties with overseas partners. The company already sells in Japan and is pushing into India and Southeast Asia.
Why now? Funds Startups closed the first round of its No. 2 fund at the end of June 2026, pitching it as an all-stage deep-tech debt vehicle. This is the firm's first deal using a convertible bond.
Why a convertible bond? Deep-tech startups take years and heavy capital to reach commercialisation, and equity-only rounds dilute founders and shareholders. The fund combines venture debt, grant bridge financing, and convertible bonds to supply growth capital while limiting that dilution — though the debt may convert into shares later.
ONSOH had already raised about US$230.8K through FUNDINNODealroom has a profile for this one. Try Dealroom → in June, making this a new financing channel rather than its first outside capital.
The signal: The deal reflects Japanese venture-debt providers broadening into deep tech and offering alternatives to equity for research-heavy, regional startups. Its payoff depends on whether RG92's claimed benefits hold up in field trials and win repeat commercial adoption.
Read more: prtimes.jp
Image credit: D-Stanley
