How a company turning algae into supplements attracted over $7 million from investors

Production supervisor Dave Drummond and senior manager Amanda Wiggins with the company's unique algae streams
Nelson-based Supreme Biotechnologies grows a unique type of micro-algae and turns it into dietary supplements. Now the company is growing as fast as its product.

Algae is most commonly known in New Zealand as the green gunky stuff found in rivers, or the red oozy substance in your birdbath. But over the last five years, a Nelson company, Supreme Biotechnologies, has given this peculiar little organism a new lease on life as a dietary supplement.

The company grows its own strain of algae, extracts an antioxidant called astaxanthin, and then makes a dietary supplement it sells under the AstaSupreme brand.

Now it is looking to triple production (the company has already upped output three times in the last year), and is expanding into skincare. It has also secured more than $7 million in private investment.

Supreme Technologies’ custom-kitted out building in Nelson, with its lighting and temperature control, is an unusual sight. Long, tubular bags of algae hang in rows from the ceiling in eye-catching shades of deep red and vibrant green. It looks more like an alien movie or an art gallery installation than a manufacturing plant.

     

Commercial manager Dale Ching and Wiggins

This is where the company grows an exclusive New Zealand strain of the algae known as Haematococcus pluvialis, and turns it into nutraceuticals.

The process sounds complex – and it is. Supreme Biotech senior manager Amanda Wiggins says the algae is is known as the “diva of micro algae” worldwide because it is notoriously difficult to grow.

Nevertheless, the company has successfully turned its processes into a commercial venture, with 19 full time staff in 2014, compared to two when the company was founded in 2009. It has also secured more than $7 million in private investment funding from well-known figures such as former New Zealand Angel Association chairman Ray Thomson and pharmaceutical pioneer Graeme Douglas. The Government has tipped in research and development (R&D) funding of over $1 million.

Now the company plans to triple the number of bags of algae it is growing from 5000 at present (already up from 1000-1500 a year ago). The demand has been overwhelming for a product that makes workers look like a part of Texas chainsaw massacre if they get splatters on their white overalls, Wiggins says. Supreme Biotech founder and CEO Tony Dowd estimates the company could sell 20 to 30 times what it produces.

Currently, the dietary supplement’s biggest markets are New Zealand, China and Japan, and deals with Malaysian and Korean distributors are in the works.

There are also plans for expansion into other areas: in particular a skincare range that’s about to launch through a distribution agreement in the US (a deal fronted by former Miss Universe Barbara Palacios); and a project being finalised for the algae-growing technology to be licensed to an Australian company. If this goes ahead, Dowd says, it would be a “big step forward”. The technology isn’t patented, but the IP around it is owned by Supreme Biotech and is protected through legal contracts.

Wiggins says the company’s main struggle has been the growing pains of transitioning from a start-up to a more sleek and strategic operation. Part of that was finding investors in New Zealand in 2009, when Supreme Biotech was founded. Dowd says the angel investor industry in New Zealand has matured and raising money is now easier for start-ups.

     

“It’s really gratifying to see the way the angel network has developed in New Zealand over the last five years. When I started speaking to investors in New Zealand in 2009 it just didn’t exist,” he says.

There are a few ideas in the pipeline for where they could take the product in the future, Dowd says, including ideas to get closer to the pharmaceutical grade.