Kibbutz Ketura scored its second exit in three years this weekend when Britain's Grovepoint Capital agreed to buy control of its biotech start-up Algatechnologies.
Three years ago Ketura, founded by Young Judaea alumni in 1973, sold solar company Arava Power to Siemens.
Grovepoint is paying an estimated $15 million to $20 million for Algatechnologies. Its major shareholders are Ketura and the Jewish Colonization Association. CEO Hagay Tzur and Chairman Ed Hofland currently run the company. Hofland co-founded Arava Power in 2006 with David Rosenblatt and Yosef Abramowitz.
The company has developed a technology harnessing desert sunlight to grow microalgae. Astaxanthin, the dark red pigment found in algae and aquatic animals, is then extracted. The human body cannot synthesize it, so it must be cultivated and consumed, according to the company.
Astaxanthin is "a potent antioxidant that has been proven to have beneficial effects in many health conditions related to or caused by oxidative stress," according to Algatech. It is thus used in the pharmaceutical industry; oxidative damage is linked to aging.
Algatech markets astaxanthin through its AstaPure product line. The company sells the substance in pure form, which is added to health and cosmetics products. The company's products have become particularly popular in Japan, and demand is growing in the United States and Europe. The overall market is worth about $3 billion annually.
Grovepoint, founded in 2010, opened an Israeli branch last year, run by Hagai Stadler and Gil Meirovich. It focuses on Israeli companies in water, energy, agriculture and other natural resources.
Hofland said over the weekend that over the past 15 years Algatech has chalked up a rare achievement: commercially producing a unique algae. He said the company had been looking for an investor with economic experience and international commercial savvy. Grovepoint has vision that can realize Algatech's potential, he added.
Leon Blitz, Grovepoint's co-founder, said astaxanthin had many health benefits. He said his company sought to invest in research and development for new algae strains and by building up a line of products based on astaxanthin.