Food allergy diagnostic company secures £2.9m investment
Investors in this round: Brokered by Acceleris Capital with lead investor Praetura Ventures and follow-on from Development Bank of Wales. Other investors include venture capitalist Jon Moulton’s family office, Perscitus and Reacta
- Reacta Biotech’s drive to provide standardised food allergy tests see the business on course to transform clinical food allergy diagnosis worldwide
- £2.9m investment round was brokered by Acceleris Capital with Manchester-based Praetura Ventures as the lead investor alongside existing shareholders including the Development Bank of Wales and Perscitus
A business that is on course to transform the food allergy diagnostics market has secured £2.9m investment in a funding round led by Praetura Ventures with follow-on equity investment from the Development Bank of Wales.
Reacta Biotech (Reacta), which is based in Deeside, North Wales, produces clinical diagnostics kits for food allergy testing. The business improves the efficiency, accuracy and safety of food allergy testing by producing pharmaceutical grade Oral Food Challenges (OFCs), the gold standard test for diagnosing food allergies.
In the latest funding round, £1.5m came from Manchester-based Praetura Ventures, the venture capital fund manager that targets early-stage businesses in high-growth sectors. Having made an initial seed investment in 2019, the Development Bank of Wales will invest a further £1m in equity funding. Other investors in the funding round include venture capitalist Jon Moulton’s family office, Perscitus and Reacta’s management team. The transaction was brokered by Reacta’s long-term advisers, Acceleris Capital, who have previously raised £4m for the company since it was founded.
The business will use the funding to scale up the manufacture of its current product range including peanut, egg and milk OFCs and to extend its product portfolio. It will also expand its team of specialists and expedite work on enhanced packaging solutions. These activities will support the company in growing its portfolio of global pharmaceutical and biotech clients.
With an estimated 250 million people worldwide affected by food allergies, the global demand for allergy testing is rapidly accelerating. Despite this, the current methodologies for diagnosis and assessing treatment responses to food allergies are limited and often inaccurate. In the UK, more than 8.5 percent of the population is thought to have a food allergy and those developing new treatments continue to push for improved diagnostics to support clinical trials and the roll-out of new therapies.
Whilst the principle of OFCs has been around for decades, Reacta’s product represents the first Pharmaceutical Grade, standardised, dose controlled, masked OFC available in the market.
The investment comes after a series of major growth milestones for Reacta that followed earlier investment from the Development Bank of Wales totalling £875,000 over the last two years. The company recently secured a multimillion-pound commercial contract with a top five global pharmaceutical company to supply the firm’s clinical trials over two years and, last month, the company gained Medicines and Healthcare Products Regulatory Agency (MHRA) approval to manufacture products to pharmaceutical standard (cGMP) at its site in North Wales.
Dr Paul Abrahams, Chief Executive Officer of Reacta, said: “It’s been a landmark year for Reacta, and we continue to go from strength-to-strength as a business, developing new diagnostic products and expanding our capabilities. The number of people experiencing food allergies is increasing, so it’s vital that technologies to accurately and safely test for allergies are developed. We’re committed to providing excellence in the development of a suite of OFC products, and revolutionising the way food allergies are diagnosed worldwide.”
Praetura Ventures has previously invested in healthcare businesses including innovative drug ‘switching’ company Maxwellia, Dr Fertility and Ostara Biomedical. The firm recently appointed four industry heavyweights as operational partners to bring significant experience to support the founders. The firm’s investment in Reacta was led by investment director Louise Chapman and director Dr Andy Round.
Dr Andy Round added: “It’s great to be backing a business which is on track to have a significant and positive impact on society as well as returning significant funds for our investors. We look forward to supporting the team on the clinical contacts and customer side, as well as working with them on the strategy and marketing.”
Mike Bakewell and Oliver Wheatley of the Development Bank of Wales said: “As a patient investor, we have backed Reacta with equity finance since 2019. Our continued support has enabled the business to develop their diagnostic products and expand their capabilities from their base here in North Wales. Importantly, they have now secured the specialist backing of Praetura Ventures, enabling the team to scale-up for further growth.”
Simon Thorn, Managing Director of Acceleris said: “It is especially pleasing to see Reacta secure this investment which will allow the company to execute its ambitious growth plans. Having worked with the company since start-up, Reacta is now ideally placed in an expanding market to build on recent significant successes.”
Praetura Ventures contact details
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About Praetura Ventures
Praetura Ventures is a Manchester-based venture capital firm which invests in early-stage, high-growth businesses across the UK, with a particular focus on supporting entrepreneurs across the North of England.
Praetura Ventures is committed to adding value post-investment and providing the ‘more than money’ support that businesses need to grow, including additional expertise, resources, networks and guidance, to its investee companies.
Since 2019, Praetura Ventures has invested more than £20m in 21 businesses, including North West headquartered businesses Sorted, Culture Shift, LCC and Peak.
The firm also launched a Venture Partner programme – an innovative and collaborative programme that is aimed at experienced, connected and successful individuals who have a desire to add value and potentially provide mentorship, advice, introductions and investment to the next generation of entrepreneurs. In just a few months, the firm has grown its Venture Partner base to 50+ members, typically C-suite level individuals.
About the Development Bank of Wales
The Development Bank of Wales was set up by the Welsh Government to support the economy of Wales by making it easier for businesses to get the finance needed to start up, strengthen and grow. The purpose of the Development Bank is to unlock potential in the economy of Wales by increasing the provision of sustainable, effective finance in the market.
Launched in October 2017 it is a cornerstone organisation for delivery of public sector financial products, supporting micro to medium businesses in Wales and increasing the supply of finance. It promotes economic development through an adaptable delivery model that is responsive to market needs whilst providing continued value for money for public funds. It delivers key Welsh Government policy objectives measured through performance targets and providing investment management and support services across the whole of Welsh Government.
In total, the Development Bank invested £197.6 million in the 2020/21 financial year. Whilst £92 million in loans came from the Covid-19 Wales Business Loan Scheme (CWBLS) to support companies through the pandemic, investments from all our BAU funds also remained stable. £105.6 million provided a range of support for businesses across all areas of the economy and all stages of growth.
The Development Bank of Wales has invested over £100m in tech businesses and is one of the top three VC investors in the UK.
See the Development Banks of Wales latest performance figures here
Media centre: www.developmentbank.wales/media
About Reacta Biotech
Reacta Biotech is a North Wales based clinical food allergy diagnostics company. Reacta’s goal is to improve the diagnosis and management of food allergy. This market need has become increasingly apparent with the substantial rise in global food allergy cases since the 1990s. The product range is currently being expanded from Peanut OFC to other allergens with OFCs for both egg and milk allergies being launched in late 2021.
About Acceleris Capital
Acceleris Capital are an FCA regulated Investment Advisory house who focus on early-stage technology SMEs working on global unmet needs in healthcare, sustainability and software.
Since incorporation in 2000, Acceleris have advised and managed fundraisings for over 60 UK businesses and introduced over £150m investment, with a track record including start-up to IPO, trade sale and private equity exits.
Acceleris primarily source funding from their private angel group, Acceleris Ventures, global investment institutions and family office investors.