top of page
JPG__INSEEDER-01.jpg

Investment proposal

The EC regulation has accidentally opened up the €1B market for sprouted flax.

Sprout Dynamics is the world's first manufacturer of cyanide-free, high-protein & high-fibre products from sprouted flaxseed (linseed) on a commercial scale.

  • Facebook
  • Twitter
  • LinkedIn
  • Instagram

Introduction

Spout Dynamics ApS was created in 2002 and proved to the venture capital world that Europe is capable of developing unique and trendy plant based billion-dollar food markets instead of trying to catch up with the Americans like Impossible Foods and Beyond Burger.

Sprout Dynamics ApS is a spin-off from its parent company, CMYK Ingredients JSC , a EU Commission accredited independent R&D Center.

 

Forbes named CMYK Ingredients food bio-hackers for their elegant solutions to malnutrition. For the last 5 years they are developing food products that before were previously considered to be industrially impossible. CMYK Ingredients made them reality by introducing robotics and AI into the classical food technologies.

For instance, we’ve obtained the first in the world cold pressed cardamom and aniseed oils and this became the first step to creating a new industrial category of food flavors – the liquid herbs & spices which are safe and universal in their usage unlike essential oils and oleoresins. Liquid herbs are available in the Balkans, UK and Germany as a food ingredient as of 2017.

The clients have been constantly requesting final products from CMYK Ingredients. It has inspired a founder of the company, an ex-Procter&Gamble and ex-JTI finance manager Iryna Gavrylova de Garcia to invest $200K of her private capital into the development of Sprout Dynamics. This technology is the key to producing commercially sound volume of final products made of sprouted flaxseed, cyanide safe and high in easily digestible protein.  

 

 

 

This is a short story behind Sprout Dynamics. The company decided to locate its headquarters and the patent stack ownership in Denmark, while the production stays in Bulgaria. Such geographical choices shall enable the company to be close to the innovative Danish ingredients eco-system and simultaneously to the lowest in the EU expenses for technology transfer from idea to prototype and prototype to industry.

 

 

At the moment Sprout Dynamics is raising $220K for:

  • Market entry to the Nordic region

  • Starting the design of the large industrial plant for 100 tons of sprouted flaxseed per month in Bulgaria

denmark invest.png

Assisted by Invest in Denmark, CMYK Ingredients has established their Nordic headquarter in Copenhagen to be close to the innovative Danish ingredients eco system.

Case of Invest to Denmark 

Problem

Malnutrition in the developed countries is not about lack of food, it is more about our microbiome’s failure to absorb and digest the vital nutrients.

 

This malnutrition issue is effectively addressed by adding to our daily diet easily accessible dietary fiber which is the vital must nutrition for our microbiome. Habitual fiber is consumed in raw (vegetables and fruits) or in cooked forms (cooked grains or bread).

Though it is not that easy. Making sure you eat your daily fiber need of 25-30 gr is almost impossible. Imagine eating 1.1 kg of carrots or 1 kg of apples or 2.5 kg of cooked rice or 1.2 kg of bread within one day. It is a doubtful scenario, especially long-term.

On the other hand eating much fiber as a supplement is complicated. These products are usually brown, bland and boring! Consumers often have no clew how to cook them and eat them.

With only 9% of adults getting the recommended amount of dietary fibre a day.
 

as a result of many diseases: digestive system, type 2 diabetes, colorectal cancer, heart disease

25 - 40g

daily consumption required

for women

for men

Solution

Flaxseed dietary fiber has solved all the above problems, moreover it is one of the most undervalued grains in the food industry.

 

3 times more vs any other grain and it is terrific food for our microbiome. Recommended daily dietary allowance of 25 gr is present in 100 gr of flaxseed. Meaning you won’t need to eat over 1 kg of food to feed your microbiome!

Also sprouted flaxseed is an unbeatable fish replacement in its nutrition value. It contains 20% of protein and 20% of Omega 3. By its value flaxseed is a precious superfood.

 

Please note, though, that it is a workable and safe scenario only with sprouted flaxseed. Because consuming 100 gr of unsprouted flaxseed per day would be dangerous from the toxicity point of view due to exposure to significant amounts of cyanide.

Today the only reason to “1 spoon per day” consumption of flaxseed is % of cyanide.

This problem has a safe and elegant solution – sprouting. It reduces cyanide content in flaxseed without any chemicals or additives.

However classical sprouting can be dangerous. The abundant mucous produced by flaxseed already at the germination stage makes it a perfect media for bacteria, like e.coli, salmonella, etc.

Sprout Dynamics has used 3.5 tons of flaxseed, invested in 2 R&D years and 600 experiments.  These actions resulted into development of the dynamic sprouting technology. This hi-tech invention has created  - for the first time in the sprouting and food-tech history – the possibility for reduction of cyanide in sprouted flaxseed by up to 80% and a guaranteed safety from dangerous bacteria.

 

You may think of it as of marzipan level of cyanide safety achieved by Sprout Dynamics for enjoyable and entirely safe consumption of the flax superfoods by humans and animals.

 

It is significantly below the acceptable level of cyanide if foodstuffs introduced by the EU Commission on January 1, 2023 (regulation 2022/1364 of 04.08.2022). This strict food safety measures have also triggered high demand for our products:

  • Sprouted dry flaxseed

  • Sprouted frozen flaxseed

  • Frozen semi-ready meals made with fresh sprouted flaxseed

  • Fresh sprouted flaxseed (not dried, not frozen) given the market’s uptake of the area where the plant is located

eu regulation.jpg

New regulation from January 2023 gives to us unique opportunities for our thechnology that reduce 80% of cianide in flaxseed

Competitors

Sprouted flax producers are mainly represented by enterprises that use conventional sprouting technologies and produce them in small batches.

Petras BIO. The competitor of Sprout Dynamics in the EU in terms of production is the family-owned Romanian company Petras BIO with a turnover of $1,900,000 (2021). They produce about 60 different products from germinated seeds of various small kinds of cereals. In particular, they germinate small batches of Sprouted brown and golden flax seeds by vertical farming and drying at 42°C. Their primary market is Germany. According to the owner, growth is 60-130% per year.

Murakami FARM. The competitor in terms of production capacity is the Japanese company Murakami FARM and their Super Sprout Factory project of 10 sprouting plants. In the largest one (4,600 m2), they invested $26mln and purchased about 800 pieces of equipment from Sentrex. They produce 70 million packages of broccoli sprouts per year, rich in sulforaphane.

All Producer in EU can produce 3 t per month

Our technology allows to us produce 5 T per months in 20 sq.m.

120 t 

Monthly production capacity

will be in our industrial

level production

Market and Potential of the Technology

Sprout Dynamics has clear and tested market entry strategy to the sprouted flaxseed niche in the Nordic countries in two steps:

 

Step 1

2023-2024 — target clients: public kitchens

Sprout Dynamics today has the capacity to produce 5 tonnes of sprouted flaxseed per month. This volume is sufficient for 25 public kitchens (schools, hospitals, universities, etc.). The main target of the launch is to connect with them and sign contracts.

Within the 2 R&D years Sprout Dynamics was in learning from http://ekomatcentrum.se/ - an outstanding Swedish NGO effectively working for many years on improvement of quality of food in Swedish schools. We’ve learnt how to build educational programs for school chefs and cooks and how to introduce sprouted flaxseed as a prominent fish replacement into the school menu. This type of win-win educational programs is on high demand in the Nordic countries.

Other than that, the Nordic countries have been chosen as the first scale-up market for the following reasons:

  • Sprout Dynamics same as the public kitchens follow the New Nordic recommendations and therefore follow the standards for nutrition facts and, more specifically, the amounts of fibre and omega-3

  • Sprout Dynamics is a member of the Food & Bio Cluster Denmark https://foodbiocluster.dk/. The headquarter of the company was opened in Denmark by invitation of Invest in Denmark https://investindk.com/ and as a result of its special project for strategic and high-potential companies for Danish economy.

  • Sprout Dynamics is supported by the Danish government in the initiatives aimed at improving the national health

  • Sprout Dynamics’ products in these countries have an unprecedently attractive price for the public kitchens

To implement this stage, Sprout Dynamics is negotiating with the leading distributors in the Nordic countries:

  • Martin & Servera (Sweden)

  • Menigo (Sweden)

  • Svensk Cater (Sweden)

  • Dansk Cater (Denmark)

  • Chartwells (Denmark), part of Compass Group (GB)

Steps 2

2025 — target clients: retail chains

Entrance to physical retail (ICA Gruppen and COOP) with ready-made semi-finished products.

The experience of cooperation with Kaufland (Bulgaria) has shown the high efficiency of attracting a younger generation of buyers to their network through our marketing programs

 

* Potential market

At the end of 2022, Sprout Dynamics achieved excellent results in a joint project with ... to create a new generation of vegetarian dog food in Belgium.

 

This again proves that the market opportunities for high-protein cyanide-free fibre from flax are just emerging.

упаковка.jpg

Traction

2019 The team has cracked the biology of sprouting

2021 $100K grant for ongoing microbiology control in food ( DIH)

2022  Market tests/ Prototype production/ Poison safety proof/ Open Company in Denmark

2023  Patents/ Programing of automation/ Nordic selling

2024  Open Big Plant 

2025

2026

Goal: Leadership in Plant-Based Ingredients

Disruptive technology => 10 production facilities

€ 3.6 m

EBITDA of 1 plant per 1 year

Team

Iryna Gavrylova. CEO

MBA in Finance Biotech visionary Managed $200M Angel investor, 1 exit

Volodymyr Lanin. CTO

Engineer, Innovations implementer, Managed production of 300+ SKUs

Kseniia Zazhyhina. CMO

Marketing strategist, Founder in an IT project on procurement, exit in 2014, Generated $50M contracts

Veselin Petrov. Life Science & AI

PhD in chemistry & ecology, Programming fundamentalist, Author: 44 scientific articles

Kristin Peycheva

Koos van der Vlugt

Thomas van der Vlugt

Torgether we create results

sales goals ( public kitchen / PoS)

production mail stones 

EBITDA

2023/ 2024/2025/ 2026

Technology Prototyping Production (2).png

Capital

CMYK Ingredients provided Sprout Dynamics with a € 250 000 loan at 0.5% per annum. This made it possible to acquire ... and launch ... on the market ....

In December, €XXX of this debt was converted into equity, giving CMYK Ingredients an X% stake in Sprout Dynamics.

The remaining amount payable is XXX euros. XX% of the funds raised during this campaign were used to repay this debt.

Funds from a successful company will be used as follows:

XX% on marketing

XX% to reduce debt to CMYK Ingredients

XX% on equipment for a prototype plant for 5-8 tons

XX% on ______

The minimum target for raising capital is EUR XXX; the maximum is EUR XXX

description of 3 waves

200K

600K

3.7 m 

Increase your capital, invest to us in yearly stage 

Disruptive technology => 10 production facilities

during 5 year 

5 times

Exit Strategy

As the technology owner, Sprout Dynamics ApS attracts investments from the parent company to build factories.

From 2023 to 2026,

 

we will fully launch one plant in Bulgaria at 100 tons per month, serving the Nordic Region, and begin constructing a second, presumably in Germany. In 2023, we are selling 5 tons of sprouted flax per month, produced in a prototype plant in Bulgaria, to 25 public kitchens in Denmark and Sweden. In 2024, we will launch the first full-fledged plant for 100 tons with a capacity utilisation of 30%. In 2025, it will reach 80-90% utilisation.

The duration of the construction of the plant is nine months from the moment of certainty on the land and permits. This also includes IT development, which manages the factories. From 2024, Sprout Dynamics ApS  will become not only the owner of the technology but also the plant owner. This brings us to the plane of a high EBITDA of 30%.

Initially, we focus our strategy on B2B sales, where interaction with 2-3 companies in the Scandinavian countries is sufficient enough, where our product fits into their health strategy. At this stage, to fulfil 100% of sales and earn 3.6 million euros in EBITDA, it is enough for us to have 400 canteen schools, hospitals and universities in our portfolio.

This is a controlled outcome. It is a realistic goal and does not require high marketing costs. Thus, from 2024, the value of our company will be calculated according to the classical valuation of the company based on EBITDA with a multiplier of 10.

In 2025, we will be in contact with VCs investing in Round A because by then, we will already have 1 million euros in EBITDA, and the company will be worth 40 million euros. Potential VCs in Round A can be agricultural and corporate venture funds (Cargill, ORCLA). 

This means that in 2024-2025 it becomes possible for investors to exit by selling a share based on the value of EBITDA. In 2025, it will be possible to sell shares for 5-6 times more. Or keep it to yourself and receive dividends.

By 2026, we will understand what works and how it works in practice. We will deal with all the difficulties of implementing the first plant and be ready to build the next plant.

Since dynamic sprouting technology is based on many sensors, the most challenging thing in launching the first plant will be its physical construction and programming of the "brains" at the same time. Launching a second plant will be like opening a second store with the same cash register.

Right now, speed is essential for Sprout Dynamics. On January 1, 2023, the European Commission regulation on flax came into force. We must declare that in 2024 we will provide an industrial solution to the task set in it (reducing cyanide to specific standards) on a commercial scale.

Therefore, we are raising capital quickly and are giving investors excellent offers for the value of shares in the first half of 2023.

Technology Prototyping Production (1).png

Risks

1. If we don't raise all the money needed to build the first plant, it forces us to raise funds from other regions that cannot yet invest in the Nordic countries and will cause a delay in the implementation plan.

2. If we start sales at the wrong time, for example, with a delay of a year, this will require additional time to enter retail.

3. If we can't keep up with product quality in production, it will take more time for R&D development.

Без названия.jfif

How to invest to us 

we will use fonderbeam.com

you can invest from 1000 to 50 000 and buy equity 

bottom of page