Jens Eklöf: So I'm Jens, the CEO and CTO of Orbiotics.

Ida Krogh Sjöholm: And I'm Ida, so I'm the commercial officer.

Jens Eklöf: Yeah, and at Orbiotics we developed the next generation precision prebiotics. And we're starting with a highly targeted prebiotic fiber for metabolic health.

Alex Shandrovsky: Amazing and you guys recently raised some cash as well, correct?

Jens Eklöf: Yeah, the ⁓ days of last year.

Alex Shandrovsky: Well, congratulations on that. I'm really excited to have this conversation and deeply respect the investors and you guys cap table. ⁓ you guys meet the lead investor for the round?

Ida Krogh Sjöholm: Yes, so we cold-called straight. was a tech barbecue ⁓ Copenhagen. We attended that and we cold-called, I think, all the investors on the list ⁓ Rockstar was one of them. And they were too busy so they couldn't meet with us. But we got an email to one of their analysts, had a meeting with them. A call, I think. Some good conversations, really skilled. And then... We quite soon after that got a meeting with their managing partner of the AgriFood fund. He was in Denmark, Mark. we met with him. ⁓ had a great conversation. think we also, we I think we really liked him. He really understood the industry. He understood our case, post smart questions. So we were intrigued and ⁓ I he was too, because we were invited to. to pitch to their IC. I mean, there was a few iterations. We sent the deck and they asked questions and all that. we were invited to pitch for their investment committee quite soon after, actually.

Alex Shandrovsky: And I'm curious when you say, first of all, congratulations, and I love people who do cold outreach. I'm a huge fan of it. When you did the cold outreach, was it email or phone? one did you guys use?

Ida Krogh Sjöholm: So first it was on this, know, the conference had this app, I think they use Brella or whatever it's called. it's just a, you know, short text message there. Of course we had reached a research there focus and thought it was a good fit. And we introduced ourselves ⁓ we came from. We both used to work for a NovoNesis and you know, our idea, but the answer was very short. I'm too busy. Try to email this person. So that's what we did.

Alex Shandrovsky: Yeah. Do you remember, or maybe you could pull it up? you, I love just seeing it very specific. Do you remember what the message was?

Ida Krogh Sjöholm: Yeah.

Alex Shandrovsky: Like, what was the message?

Ida Krogh Sjöholm: Yeah, so I think we wrote different messages. I mean, it also depends on who writes, but this one was me, so I remember, but it was very basic. I think what we often started with was who we were and where we came from. That kind of what the investors used to, like that's what gave us a ticket to talk with them, that we knew the industry, we knew the customers. And then of course, the idea, how we differentiate and the market, but very short, like sentence on each thing.

Jens Eklöf: I think we just realized early on that the team is our biggest strength here in the beginning, so utilize that.

Alex Shandrovsky: Yeah, love it. One of my guests Paul Shapiro, who I respect, he always says that, you know, in the early stage, you're you're betting on the jockey, not the horse, right? So you're you're basically betting on the team and and the team is strong, you want to have that conversation. Do they have relevant industry experience? Clearly, you guys ⁓ do. And from that first meeting to actually getting a term sheet, how long did it take?

Ida Krogh Sjöholm: Well, the funny story is it went quite fast. mean, think it was only a couple of weeks between the first meeting and then meeting with Mark and then discussing whether we wanted to proceed to the investment committee. actually said no. I we were not ready.

Jens Eklöf: It went a little bit too fast.

Ida Krogh Sjöholm: we didn't actually know what we wanted and what constellation of investors. So for me, at least, that was a bit of a scary because we didn't know if Rockstar would say, no worries, you can come back later. Or if that would be hard now. Luckily, they said you can come back later. And that's what we did. ⁓

Jens Eklöf: It's worth mentioning that we're first time founders, We didn't really know what to expect and how to play the game. So when someone just said, let's continue on, we ooh, is this really what we want? We haven't thought enough about it. ⁓

Alex Shandrovsky: Yeah, exactly.

Ida Krogh Sjöholm: So what we did then was that we actually spent almost two months talking with other investors and learning more, getting sharper on what our focus were and our ask. And that's also when we met our other investor, Delphinius, and we realized the combination of those two would be ⁓ preferred case. And we went back to Rockstone and say, ⁓ I still invited to the investment committee. And luckily we were.

Alex Shandrovsky: then how much were you guys thinking about raising initially? What was the thought process? Okay, this is the amount that we think we need. How long was the top? How long were you gonna raise that for? know, is it 12 months, ⁓ months? And when you were thinking about, we need this much cash right now. What was the cash? Did you get the amount that you wanted? You got less, more?

Jens Eklöf: Yeah, so we were aiming for a year. We think we could do with less or at least we could start the next round earlier. Let's put that way. We were aiming for a year. So to do the things that we needed to do, that we thought we needed to do, we needed about 250,000, 300,000 euros. That's also what bought. And then we also recently added an angel investor that has some other capabilities to Spring 2019. So the three of them make up to what we needed to have.

Alex Shandrovsky: And does that also include any public funding as well? Because the ecosystem in Denmark is very well known for public funding. Did you get any loans? Because when I think 300,000, that's like basically in the United States, that's essentially like two weeks runway. I'm serious. ⁓ I know that as a fact.

Ida Krogh Sjöholm: Yeah. At that point, I think we learned along the way also what the ticket size should be and got a lot of good feedback. And I think also what we learned was that a lot of the investors have like a preferred ticket size and we negotiated a little bit, but it's not like they move a lot out of that one. So for us, was also to combine the right investors to get the ticket size we wanted. And I think it appears to be fairly standard. Well, we've taken in at the stage we are in Europe. I think it's also interesting to mention maybe that we have an ambition to start our next round already in ⁓ couple of months, actually. So that's like after six months. But that's because we have done the de-risking activities and we are ready to take in that more capital that weren't really ready to take in in December. But a lot of investors asked that about that. Are you sure that's a very short time? Is it right? But I think a lot of dialogue about that. That's how our path looks. And we are so short time to market. We're going to be the market in a year. ⁓

Alex Shandrovsky: Wow, so we're going to talk about that because I think it's really fascinating, but the public funding, were you able to get it secure in your public funding or not?

Jens Eklöf: Yeah, I've been on the public funding now for the first year. So before we got this investment, I worked for a year in my own company to prepare for this. So I've had funding from the state.

Alex Shandrovsky: And for the- For that, can you explain for those founders outside Denmark, how did that work? How did you transition into that? that not dilutive? Did you have go through an IC as well?

Jens Eklöf: Yes, so you file a form online basically and then if you're chosen you get to go to this investment committee. that was like half an hour's meeting with them.

Alex Shandrovsky: Okay. And that's neither dilutive, or it's alone.

Jens Eklöf: Non diluted, just soft funds.

Ida Krogh Sjöholm: Non-diluted, not alone. It's a grant.

Jens Eklöf: That's great.

Alex Shandrovsky: And then how much was that?

Ida Krogh Sjöholm: Hmm?

Jens Eklöf: Yeah, so what's that? Maybe to see now in a card that makes sense, something like 60,000 euros, maybe. A lot of money, but it sort of gave you some salary if you want to use it like that, but also you could use it on the product. So spent a lot of that money just showing that product can do what I said it could ⁓ do. And showing some of the pre-clinical work that we need to do.

Alex Shandrovsky: Okay, so That's incredible.

Ida Krogh Sjöholm: And I think maybe for those outside Denmark, that fund is very much for like the very early start. So it's kind of finance that you have something to live on, like a basic salary and some money. And then now we have other in for other grants. Those are more designed like you get funding to finance development activities and then we need to pay ⁓ percent, 60 percent, just like the EU grants works, but just ⁓ a daily level. So those we have into.

Alex Shandrovsky: Amazing. And Jen's for you with the product itself, like when you already had the science kind of worked out pretty significantly before when you were ready to go. Because again, I go back to how short the runway is, right? And you're saying, look, we can be in a year in a, you know, within commercial within a year, you could see the technology you guys are working on, which would maybe open up. That could be a three, four year process in the United States or somewhere else that could take a long time, especially getting to a place where it's outside of lab scale to commercial scale. very, very fast. So how, like, how did you get to be so fast?

Jens Eklöf: some respects, I think I've gone to a good school. ⁓ I did was launch ⁓ or I take products from idea to market. So I think I know all the checkpoints that needs to be done and in what order. And I knew ⁓ you can ⁓ clever and do things faster. ⁓ that's basically one ⁓ of it. The other part is that I've thought about this product for what, 10 years plus.

Alex Shandrovsky: Hahaha! Wow.

Jens Eklöf: I knew what I wanted to do and a lot of thoughts had matured in head in advance. So once I got going, I could just start solving problems. That's part of it.

Alex Shandrovsky: And did you have any concern, again, this happens in the United States and other countries, that your corporate employer will go after you? Like, oh, you developed this while you were working for us. Was there any due diligence that had to be done on that about investors? they may say, wait, so you developed this on our dime? Or that was clear, like you had to clearly differentiate that as an entrepreneur who left corporate life.

Jens Eklöf: I would say that the product we do now is more what our old employer would have sold products into. it would be the customer of our. So I'm now the customer of my former employer, more than I am a competitor. The idea stems back from my PhD. So I did a PhD on and how ⁓ utilize fibers. ⁓ the knowledge comes from there, not from the company. ⁓

Alex Shandrovsky: Gotcha.

Ida Krogh Sjöholm: So, NovoNes is right, they do fermented ingredients, so bacteria, cultures and enzymes. And we used to work in the function of food space that sold so live bacteria to the customers. So we know the market, but what we do now is not a fermented ingredient, it's a fiber. So it's not the same technology that a former employer would use. But I think the way you take such a product to market, we have lot of learnings. from working there that we can use.

Alex Shandrovsky: Yeah.

Jens Eklöf: And regardless of what product takes the market, you need to go through the same steps.

Alex Shandrovsky: Yeah, it's look, it made it can't imagine having a better schooling than the one you got by working in that corporate. What was the biggest objection you had to overcome in the fundraise? Right? So it seemed like it went fast. Like you went from again, ⁓ is interesting is you had a year to prepare. I mean, I know, but either if she did the same path or she you can post her from ⁓ a colleague. But did you also have a year prepared as well or through the same grant vehicle or he poached you when he raised the money?

Ida Krogh Sjöholm: in between, I think. So I left a little bit later than ⁓ Jens, and I worked as a freelance consultant with some different projects just to make a living ⁓ and ⁓ worked many hours as I could together with Jens in the fundraising. So we did the fundraising together, I would say. But Jens a little bit earlier, like developing the proof concept and the prototype of the product and things like that, where I worked more on the... storytelling and the market positioning and all of that, which is my background, right? I have a commercial background, I'm not a scientist.

Alex Shandrovsky: Yeah, well, we'll get that unpacked that but one thing that interests me is I'm guessing you're probably later stage in your career. You're not just straight straight of undergrad, right? Maybe some of you have families. I'm not sure if you do or not. Children. I'm not certain but you guys are shaking your hands as yes. Did you did you have a conversation with your spouse or partner and say, look, we're to have to have two years runaway three years runaway. I might not take a salary for about three years. You should just know this, what's going to happen. How did you navigate that conversation? Cause I love, know, ultimately the path you guys took, you know, you have responsibilities. I have three kids, right? I have, I have a wife, you know, I'm not, know what I need to make, you know, pay the mortgage. So was, you know, I think that's very much part of the fundraise round. It's one of the runways you had personally. So did you think that through as partners and say, look, we know we need to have this much in the bank to de-risk it from our families? What was the discussion that happened in the family to prepare for this move?

Ida Krogh Sjöholm: We had many conversations both with the spouses and with each other, I think, because situations might also differ and what's important for each of us. ⁓

Jens Eklöf: If you want start, I can start. I mean, I think there are many answers, but one is that my kids are getting older. They're not as young anymore. So there's like mental space for something else that I didn't have in the past. It was about survival more than like being innovative. some respects, think you're also nodding your head.

Alex Shandrovsky: youngest is almost 10, so yes. ⁓

Jens Eklöf: So same here, same here. things change and they can go to practice themselves and stuff like that. And then my wife, mean, she's had a great career, to be honest, up until now, but that's also meant that I could have to take that little backseat. So I think now we both agree that now it's my turn to see what I can do. So think that was kind of the deal.

Alex Shandrovsky: So for you, you felt like I know the number in my head how much risk I can take, like, if all goes to hell, right? And I and I know I need to, kind of push off getting the salary that I need, you know, I have a runway for X amount of time. Okay, great. And Ida, how about you? What was your conversation with your with your partner? Did you have a number in your head? Was it two years, three years that you had like, we know this may take this long for us to take a shot on goal.

Ida Krogh Sjöholm: Yeah, think, I mean, can share. It's very, very tangible. think for us, I haven't built a huge saving that I can spend on this and didn't have those things. So we also had conversations in the beginning that for me, a prerequisite was that we could take out some basic low salary, but something I couldn't live out of nothing. And the deal with my husband is that we do not have to sell the house. which means I five years right now where I can live on a very low salary. And I think if we have not succeeded with this in five years somehow, not for an exit, but at least something that can pay a salary, then we probably have, you know, we have some other problems.

Alex Shandrovsky: years is a good disturbing point. That's a kid that should be able to walk on their own at that point, somewhat.

Ida Krogh Sjöholm: And there are a lot of elements. mean, my son is five years old. So that is some other elements. But I don't, I certainly think it's possible to build a company. And I've dreamt of this for a very long time. Even if you have a family. Yes, sometimes I leave work at 3.30 to pick up my son. Then we work a little bit in the evening or when he goes to bed, right? You find your ways of making ends meet.

Alex Shandrovsky: Yeah, I appreciate that. the honesty. And I think that some us has responsibilities of the family and the wife. Like, if you're do this, there has to be some really honest conversation because I haven't seen like to me if I get older and I build a business by lose my kids and my family in the process. ⁓ I know if that's gonna be the thing that I want for myself. actually ⁓ my father an entrepreneur, right? And I saw him two months of the years a child was not a not the best experience. Again, I was very privileged in having an amazing father. But again, it's a cost I think he paid, which, you know, I think, you know, we have to bring up to our listeners to just be realizing, look, these are conversations that people are having. When they think about building a business and they have spouse and have children, they have to have a conversation around, okay, what's the runway? How much risk are we willing to take? And especially when you cannot be in ramen and couch with no debt. So that's I appreciate speaking to founders like yourselves who having much more, let's say, fuller life than just having their business.

Ida Krogh Sjöholm: Yeah, there's other considerations when you are not straight out of university, for example, mean, have a mortgage, for example, you need to consider what the impact, but for me, I think it's important to have had those kind of hypothetical discussions upfront, saying, you know, if we reach this point, that means, so you have agreed on that.

Alex Shandrovsky: Amazing. So going back then to kind of this round of what was the objection you felt like you had to really face through the DDE and, you know, was there like the biggest thing that, gosh, like we really had to deal with this objection upfront and how did you deal with it?

Ida Krogh Sjöholm: I think there were different things, not really objections. There were certainly questions that we got that was critical and we needed to answer. Usually we had good answers, I think, and we could give like nuanced, well considered. Failed also. I one time I felt miserably answering a question ⁓ why were targeting B2B and not B2C. Because in my head that was so... ⁓ intuitive and a no-brainer. And that's not a good way to answer an investor who asks the question. So I think learning from that, of course, we made a more well-grounded answer why we thought it was so intuitive and the right strategic decision to target B2B. There are also other things I think maybe also bring up that we are somewhere crossing life science and food tech. and ⁓ investors very much on food tech and are maybe not so used to how to de-risk a human clinical study and understanding that path and what to ask for. And then we went to the life science investors who were not used on the market we are targeting. So there are a lot of questions we have to answer, but no real kind of objections, were there?

Jens Eklöf: No, and then of course it's the things that everyone has, I think, right? They want this list and this data, but we need the money to prove that. the chicken and egg, I think we have a lot of those. ⁓ I guess that's the same for everyone.

Ida Krogh Sjöholm: Obviously, mean, even Rockstar, who have ended up investing in us, mean, they have given us some key, like we need to de-risk our clinical paths, we need to show that we can get the costs that we need. And these are all fair, right? Now we are doing that. Now we are de-risking all of this. Now we are handling all of those things.

Alex Shandrovsky: So I think what you guys can bring is a really interesting perspective that a lot of my guests don't bring, which is I'm gonna just share a few rapid fire questions I'm curious about, which is, okay, you mentioned clinical studies a few times, right? Is this a novel ingredient that hasn't been on the market yet and therefore requires, because there's plenty of studies about fiber, right? People know the benefits of fiber. You could just piggyback off clinical studies as long as you can, you know, create a better mousetrap, a cheaper fiber, one that's maybe more, has more applications, different use cases that hasn't been known, like beverages, for example. So like why clinical studies if you're focusing on fiber, there's plenty of clinical studies out there on fiber. Just say that, hey, there's 20 of them out there that prove that this works. you know, we just did better mousetrap.

Jens Eklöf: I'm glad you asked.

Alex Shandrovsky: great. I've done this a few times. I think I, yeah.

Jens Eklöf: fibers are not just fibers. We talk about vitamins, right? If you talk about vitamin C and vitamin A, people know they did different things. And you don't need as much vitamin A as C because they're different mode of actions. And fibers are the same actually. So you can divide them into how specific they are or what type of bacteria they target. And depending on what they do, you will get different health benefits. we have just picked a fiber that's much, much, much more targeted than other fibers. blooming the gut microbiome, it's going to go for certain species.

Alex Shandrovsky: And then that fiber has not had clinical studies done in it yet. It's a novel

Ida Krogh Sjöholm: Yes.

Alex Shandrovsky: Okay, interesting. Okay, so that's fascinating. What is the cost of a study?

Ida Krogh Sjöholm: That depends on how you design it. Yeah.

Jens Eklöf: Yeah, I mean.

Alex Shandrovsky: How did you choose which study to use? Because that would also mean that you have raised a certain amount of cash for that, right? So how did you decide what study is good enough to prove? Because you don't need to sell with a study, right? Without a study. You mean you could go and sell this product without a study. Maybe nobody would buy, but could legally sell, is that correct? ⁓

Ida Krogh Sjöholm: you ⁓ exactly. So you can get approval as a food ingredient, but if you want to say anything about the health benefits in almost all markets in the world, you need to substantiate that in some way. And you can use different data. So right now we have pre-clinical data. So that's not a human study. That's in vitro data and we can draw on some public data. That's one

Jens Eklöf: As a fiber, yes.

Ida Krogh Sjöholm: and you could make some claims with that. But if you are a big brand and you want to know and you want the integrity to know that the ingredient you put in there gives the benefits that you are claiming and also avoid any potential liability risk, ⁓ want a human study. And that's also what we want to go for all along. So we want to do that study.

Alex Shandrovsky: So I had Washington, was the CEO at that time of SuperGut. that differentiated for them. ⁓ They went out and did really ⁓ core And fiber is actually one of the driving points of differentiation. did quite well ⁓ with that Do you know how many studies you to do? Do you know how big the study needs to be? that already in the of the fundraising plan or is that, or do we first need to do the cogs production piece and only once we get the products production piece, then we can go to the study.

Ida Krogh Sjöholm: So we know what study we want to do and Jens you can say how we design it. Basically to go to market you need one good, so we talk about gold standard, randomised placebo controlled health individual type of study that substantiate the health benefits. And then it's about how you design that to give interesting benefits that have a significant result without exploding the budgets. And I we've got some really nice... designs for that right now.

Alex Shandrovsky: And again, are you able to say to us how much you think that would be approximately?

Jens Eklöf: Yeah, think our budget says 300,000 euros

Alex Shandrovsky: Okay, and that is a study done in Europe or it's a study done in India or China?

Jens Eklöf: We'll it in the US.

Alex Shandrovsky: On us. Okay, great. Okay. Awesome. Yeah.

Jens Eklöf: be anywhere from maybe 100,000 euros up to as high as you want essentially yeah something like a million and a half euros those are like that's a normal normal

Alex Shandrovsky: Yeah, you keep doing it. So when you were designing this round, you know, this like 300 K, let's have your, what were the milestones you said I need to hit to show that we are, this is a business that makes sense to go to the next stage. And did you have a go no go process? Like, Hey, if we can't hit this, we're done. Like ⁓ example would be if the study came out, like it does not beneficial. Well, is that the end? Like we're turning off the lights and it's over type approach. So maybe I'll divide it by two pieces. How did you determine the milestones for these 300k?

Jens Eklöf: think it was in conversation with the investors we had, right? What do they need to see to make us investable for the next round? And what can be done with a realistic budget and timeframe? ⁓ the combination of those kind of.

Alex Shandrovsky: And did they tell us sorry, go ahead. They apologize.

Ida Krogh Sjöholm: I mean, spoke with, of course, Rockstar and Definius that we're working with, but also a lot of other investors. Already the first round, we spoke with a lot of investors that will be more relevant now in our next round. And we made sure to ask them, you know, what do you want to see to make us case relevant? And it was very much, you know, we want to have some confirmation that you will reach the Cox that you say you will. We are quite confident, but it's fair. They want to see it. We need to de-risk our human clinical trials. So the clinical data that we have. show some more proof of concept like the stability data, the sensory data that we've now done and of course, confirmed demand. So talk with our customers and the distributors we're going to work with to confirm that they see the potential in this product and want it.

Alex Shandrovsky: Okay, I love that. that when you were talking to Rockstar and Adelphine, were you already saying, our assumption is if we hit this milestones, we're go and say raise another 2 million, whatever it's gonna be. guess it's gonna be 1.2 2 million. Is it be the next round? Is that accurate? Something like that?

Ida Krogh Sjöholm: Maybe a little bit higher, but somewhere there, yes?

Alex Shandrovsky: So 1.23, right? Is the idea say, hey, we're going to want you guys to follow on with investments. So that was the say, hey, where do we need to be for you to come in again, the potential defense could lead the round as well, right? So need you to come in and if we hit this, will you commit to $1 million to lead the round? Is that the type of conversation you had with them or is it something different?

Jens Eklöf: Yeah, that or just what would it take for someone else to come in? mean, that's a general question. What would make us interesting in the next round?

Alex Shandrovsky: Okay.

Ida Krogh Sjöholm: But they do both for them and for us. Of course, we want them to be part of next round if they want to and we want to. And they were very upfront saying, you know, we are going in, of course, for the best cases that we invest in early stage. We want to invest again, because that's how we pull our portfolio. Right. That's of course our ambition to be one of those. I think we should be nothing less.

Alex Shandrovsky: Yeah.

Jens Eklöf: I think I spent a lot of time, at least the first year that I worked, spent a lot of time building a network. that's just asking them. Former founders, ⁓ made exits. They're as relevant as the investors when comes to getting best opinions.

Alex Shandrovsky: and just getting honestly where they're at. Now, I want to go through just a few more clarifying questions because I love the way you structured it. How did you look at valuation? Was it a typical first round is going to be 20 % dilution? There's going to be not 20 % dilution. There's going to be not 20 % dilution. And we kind of need, know, we're thinking it's going to be in seven years of half a billion dollar exit. And therefore each one of us wants to have 15 % of the company left. So is that the way, very standard play of just 20 % dilutions across the way?

Ida Krogh Sjöholm: Kind of, I think. Of course, we negotiated a bit discussed with investors, but to be honest, our experience, at least very early stage, was that many of the investors had more or less fixed ticket sizes. They also already had an idea of what evaluation, because to be fair, what we came with was a team and a really good plan of what we were going to do, right? And a great idea, but not... too much of a tangible product yet. So they had very much an idea and they all knew each other. So for the investors that we narrowed down to be relevant for us, who fit with our industry, understand our case and we think could help us more than just with cash, they had already spoken with each other before we got to speak with them. I think it worked in our favor though, because our case was shared and we see now that investors reach out to us without us reaching out to them. So that's super privileged. But yeah, that's kind of the experience I think in the first round. Let's see if it's going to be different in the next round. And now we reach out more globally, investors broadly. But I it's good to have an honest and ⁓

Alex Shandrovsky: So I'm going to make a range assumption here and you don't have to confirm or deny this, know, but I'm guessing it was a pre two to three million dollar valuation somewhere there or maybe pre one and half with a $300,000 tickets with a 20 % kind of dilution post money or 50%. Is that the range that we're talking about in Europe? Is it like a pre one pre one and a point five to pre two post That's kind of where things are in Europe at the moment. Obviously, the United States is very different, but this is...

Jens Eklöf: It's below 20 % at least.

Ida Krogh Sjöholm: Yeah, below 20 % dilution is what we're aiming for. think it also a little bit, so some use safe note. We have convertible loan notes that's what the Danish investor wanted due to the system here. But first we negotiated a safe note. I think what we can say that most investors we spoke with who were interested in early stage that had ⁓ like a 2 million euro post investment cap. on a safe and then some had some interest, some had a discount, some had a, you know, some different and that's the starting point we negotiated from. Got it.

Alex Shandrovsky: Okay, that's that. Yeah, I think I think that's really, really helpful. Now, if I'm, ⁓ kind of thinking ⁓ my mind about the industry guys are selling into because it's, I went at it's it's it's food tech. And then you said, it sounds like life science slash longevity, better for you applications of food, right? This is kind of, it's very much in line with maybe the GLP one user ⁓ you know, that's kind of the format of, you know, of food as medicine, longevity plays, wellbeing, is that investor thesis that's driving ⁓ investment at the moment?

Ida Krogh Sjöholm: But if you talk about the target applications, I think it will be both in food. So you see fortified foods. It's super popular with these prebiotic beverages, know, the soda like beverages that is better for you. That's for the general population. We also see other formats, you know, it could be micro meals in dairy. could be some food formats. And then we have the supplement side as well, where we both have the traditional formats like capsules and tablets. where our fiber is dosed so low so you can actually fit it in there. New formats like gummies, for example, where it could also be very relevant. So those are the formats. The supplement side might be targeted a little bit more niche, depending on the brand. You could imagine, know, GOP1 users or post-GOP1 users want to like that their microbiome still supports their, you know, good metabolic health that supports their weight management after they've been on the treatment. but could also be very generic, broad longevity. I just want to be healthy. I don't eat enough beans and grains and vegetables and whatever, very diet. Or I try, but let's also do it when I take this drink when I'm on the go.

Jens Eklöf: And convenience is big part of it. I would say in foods, think it's clever to stay away from too much premiumization. So it's a volume game in the end. And call it slime goons, otherwise you're not going to get any scale.

Alex Shandrovsky: And when you talk about the validation study, is there a certain dose that you plan to use to validate and therefore that's the recommended dose per use case? then that validation study based on a drink in your mind, is it going to be in a supplement? And does that matter when you're designing the study?

Jens Eklöf: In my opinion it doesn't do it. You could do it as a beverage you wanted to, if they say that they need to drink this ⁓ beverage every morning for three months, maybe that's a problem in the end. So think it's better with a powder. Put it in or yogurt, whatever you want to put it into, as long as they take it.

Alex Shandrovsky: Okay.

Ida Krogh Sjöholm: So we do the study on the ingredient and then you can put that ingredient many places and we'll have the same efficacy no matter where you put it.

Alex Shandrovsky: the application of the study will be And then all of our listeners are going to want to understand, hey, how you thinking through this? what's interesting to them is like, do you, well, is what they're, cause they're thinking in their minds, this is what you have to go through. So how did you address this? So it's very specific. It's a, you know, it's not focusing so much in who you are as people, it's more like, okay, where's the business at? So that's ⁓

Jens Eklöf: think the secret sauce, Alex, our project is really understanding how a fiber structure can target certain bacteria. Because when you know that and understand that, that's when you can get the low dose. Because then you don't have to these huge amounts of fibers to get benefits. That's the sort of thing.

Alex Shandrovsky: Is that is a low inclusion also directly connected to the becoming a more margin product as well because you only need a small inclusion to go into every product so you can charge more for it.

Jens Eklöf: But it's also important because it's easy to put it in. If you need to put a lot in, then you need to spend a lot of time on fixing your recipe, for example, or massing stuff. If you have lower inclusion, it's also easier to make it a drop-in solution to whatever product you just happen to have. Just put it into that and done with the application work. If you have lower inclusion, it's also easier to make it a drop-in solution to whatever product you just happen to have. Just put it into that and you're done with the application work.

Alex Shandrovsky: Mm-hmm. yeah. Go ahead, Aida.

Ida Krogh Sjöholm: Noah's just talked about the high margins. So yes, the dose is certainly our key get really nice margins already from the beginning. We are producing with contract manufacturers, right? We are not building a big optimized production line ourselves ⁓ we still have some nice margins. But then also that our source has a very high yield ⁓ of fiber and we have a process that is very well functioning. So there's different aspects, of course. Noah's just talked about the high margins. So yes, the dose is certainly our key get really nice margins already from the beginning. We are producing with contract manufacturers, right? We are not building a big optimized production line ourselves ⁓ we still have some nice margins. But then also that our source has a very high yield ⁓ of fiber and we have a process that is very well functioning. So there's different aspects, of course. But that's part of what we are now proving with our upskating production. But that's part of what we are now proving with our upskating production.

Alex Shandrovsky: And if I'm looking at the market, I'm saying, my gosh, there seems to be quite a lot of fiber conversations happening. How do you differentiate? mean, I think you mentioned a few examples. You're very targeted in your application. You have a lower inclusion rate there. Is that where the differentiator is? Where you feel like, look, this is really a radically different approach to solving this problem.

Ida Krogh Sjöholm: I think the unique selling points might be slightly different depending on what format or what brand you are. But yes, goes back to the targeted. So we target some key species in the gut and that gives a high efficacy per dose so we can dose lower. And that's a key for many. It's a key if you have a very small format like a gummy or a capsule you want to fit it in. ⁓ a key if you are ⁓ a beverage. for example, and don't want to put too much powder in. But then we also have some other features. We know that we are 100 % stable, so it doesn't degrade into sugar or just disappear over time processing shelf life. That's a key for liability risks. We also know that we're sensory neutral and we don't cause the bloating that other fibers do. So yes, there are other fibers out there on the market, but they do not perform the way we do. they feed everything you got, the good, the bad, the neutral, whatever. So if you really want consistent results for everyone who gets it, you need something targeted and that's what we confirm.

Jens Eklöf: And you can maybe see what's happened with Ollipop, no was with the copyright, the lawsuit and half day recently they were sued for not including enough fiber to get the health benefits.

Alex Shandrovsky: it's so funny because I was like, ⁓ just don't believe in any of this. And then when I saw that, you know, how can they claim this? Like, how is this possible that making these claims, claims or messaging? was like, ⁓ yeah, that lawsuit, I'm kind of happy that happened.

Jens Eklöf: Yeah, I mean, you can argue about what's right or wrong there, but regardless, think what we can offer them is that at an inclusion rate that's low and doesn't cause bloating for consumers, we can still sort of validate health benefits. That's key because that reduces risk for the brand.

Ida Krogh Sjöholm: and offers well-documented benefits for the consumers so they can trust when they actually drink that drink they get the benefit because we have substantiated in a human trial.

Alex Shandrovsky: So take me through the process of when I can see this in the market, right? How far away am I from being commercialized? How much money do you think you're gonna need to raise to get the volumes you need to get? Actually, maybe what is the go, no go volume you need? Is a ton? No, in terms of actually volumes, like is there a certain volume that you know it's ready to go commercial from just a volume standpoint?

Ida Krogh Sjöholm: race amount or time So I think, okay, I'll start from another angle. So the next round that we are raising a little bit later this year, that would finance our human trial and our launch. So we will go to market with that. We can have a few customers already before the human trial is done because we have some data, so substantial claims, but the relaunch is when the human trial is done. So sometime next year, then we'll launch. Some customers are very small. They do not require very big volumes, they do small batches. Some do like a test line, you know, we're just going to do a very small ⁓ here of a new prebiotic beverage and to take it into one retail chain, see if it works. So in that sense, we can kind of gradually scale up the volume of our production. And we do it with CMOs, we can also gradually scale up how many CMOs we connect.

Alex Shandrovsky: And how does the regulatory look?

Jens Eklöf: Yeah, I don't want to say too much, think so. we in the US, for example, we can probably find ⁓ a from grass after the summer without generating a lot of new data. So that's one of the key aspects of the go to market fast.

Alex Shandrovsky: Do you believe that self grass will be enough for certain application given the nature of the administration in United States? say that personally, because I work for a company in plant cell, We ⁓ cell culture, we are actually targeting pretty similar markets, right? So we have a lot of discussions around this self grass. Who's gonna be comfortable with self grass? What type of businesses? mean, smaller ones, I think will be more comfortable than these bigger players.

Jens Eklöf: Long term, you need grass notification from the FDA. I think that's clear. For the serious players, you want that. But you can still get market access or you test some things out. What would add is that, mean, if you look at the difference between a self grass ⁓ and grass notification, basically, it's cheaper to do a grass notification because then someone else evaluates your data. You don't to pay for a committee to look at it. So let's see what do in the timelines. ⁓ I don't know how much you know, but the FDA seems it's tricky to to guess how long things are going to take when you stop. So that's also part of equation, so to speak. Yeah. Things are happening.

Alex Shandrovsky: Yes.

Ida Krogh Sjöholm: We really want to get fast to market. So that's one of our parameters. But there's some strategic decisions and we have some really good consultants now in the US working with us on our regulatory plan and how to prioritize. And then another consultant that will help us with our Asia Pacific strategy the approvals there.

Alex Shandrovsky: mean, congratulations on being adamant and getting to market. ⁓ that me to it's very interesting you have either on the team at this stage of the business, right? Because you you'd often have a commercial director come in post validation, post study post, you guys to be talking to customers really early on, right before you have And our customers willing to talk to you also if you don't have a sample for them to test. do you manage that? Cause if you had so many people say, look, you know, heck, I have no samples of tests. They don't want to talk to me until I have a sample, right? Otherwise it's just dreams.

Ida Krogh Sjöholm: Well, that is fair, but we have sample very soon. So that's of course something we've prioritized. We're going to produce a food grade batch here in the next month. We have a few companies now who have said that they've signed the LOAs. They want to test it in their applications. So think that is an opener. ⁓

Jens Eklöf: Yes, we can still make a food grade product, even though it's not really good to put on the market. So it's safe to try, safe to test, to taste. ⁓ we can do. ⁓ have actually, ⁓ think we have really good preclinical data. Like what the product can do is...

Alex Shandrovsky: And then. No, it's extremely exciting. very, very exciting. And is a vision to ultimately build ⁓ own facility or you see this is not, you you see CDMOs is the path ⁓ scaling company ⁓ at for the next three years.

Jens Eklöf: Yeah, yeah, I'd say so, yes. Yeah. So are CMOs that have the capacity to continue us for some time and follow demand, least a projected demand. Yeah. So if we can do that, that's great. And the low dose also enables us to do that. Yeah. I mean, if you look at some of these other high inclusion fibers, there it's, you need cut cost summer.

Ida Krogh Sjöholm: Yeah, yeah.

Jens Eklöf: to make it a big volume. think we can, because we've figured out this way of doing it, we can remain the CMOS for some time.

Alex Shandrovsky: Yeah, well, you guys have really checked out a lot of the concerns I had before the conversation. So I'm ready to give you my money. So for everything you guys have given us, and I think we learned a ton from you, how can we help? How can our listeners help? What are you guys focusing on at the moment? For the next six to 12 months, what kind of conversations you would be interested in having at this point?

Ida Krogh Sjöholm: I think there can be many things and we take advice from everywhere we can get it basically. bring it on. think one thing that we're engaging a lot now is the testing, right? So who has applications who think it's interesting considering prebiotic fortification, maybe some challenging applications, we would love to collaborate, right? We offer sampling and anyone who wants to share what they can learn from that, that will be super cool. ⁓

Alex Shandrovsky: And what kind of sampling would you want? mean, what would you want them to give back in terms of in terms of insights? Is it like if you put inside the beverage, it doesn't cloud the beverage? Is that what we're talking about? Because they're not going to go do human human testing on consumers, right?

Ida Krogh Sjöholm: So it would be, so if they want to try our ingredient and see that it works like we say it does in their application, that it doesn't mess with their sensory profile, that easy to apply, that it's stable and it's there at end of shelf life, all of these things that we test ⁓ and can say, but it's just much stronger and we can learn so much from anyone else trying it. ⁓

Alex Shandrovsky: An application you're looking for specific beverage or powdered, like a powder ⁓ instead of mix? Like what would be an ideal application right now?

Ida Krogh Sjöholm: It could be very many things. think beverages, know, these acidic beverages are very popular. It could also be some supplements like gummies or ⁓ things like that. But could also be, you know, exploring coffee ⁓ with So wherever you see it fit, that's also very much about a brand and positioning. I think we are open.

Jens Eklöf: I think it's also developed for the most challenging applications. So we're talking about gummies, that's really challenging, and you're talking about acidic beverages, so sodas, those type products, energy drinks. Those the most challenging, and that's also where think we can, we're the strongest. So that's what it's been developed for. So ⁓ those will be great. ⁓

Alex Shandrovsky: Congratulations on everything you've achieved so far and we're excited to see you guys succeed. ⁓ I you will.