CHITOSE Group Announces Capital Raising of JPY 1 Billion from SMBC

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2024.07.17 news

CHITOSE BIO EVOLUTION PTE. LTD. (Head Office: Singapore, CEO: Tomohiro Fujita), the leader of the global bioeconomy and the headquarters of CHITOSE Group, has announced the issuance of new shares of JPY 1 billion (equivalent to USD 6.2 million) through a third-party allotment to Sumitomo Mitsui Banking Corporation (hereinafter "SMBC") to be concluded on July 19th.

SMBC has been supporting the business growth of CHITOSE Group as a bank for a long time. Moreover, since September 2023, SMBC has strengthened its support by joining MATSURI, the project to build a microalgae-based industry to replace the petroleum industry. The funds raised will be used for developing various bio-products using microorganisms and cells and expanding their production capacity. Additionally, the funds will strengthen the organization in preparation for an initial public offering (IPO) on NASDAQ, planned for 2027.

Chitose Laboratory Corp. (hereinafter “CHITOSE”) was selected by New Energy and Industrial Technology Development Organization’s (NEDO) Green Innovation Fund (*1) in March 2023 as the implementing agency of an R&D project with a budget of JPY 58 billion (equivalent to USD 364.3 million). SMBC is participating in this project as a collaborating institution. To support CHITOSE's business growth, CHITOSE BIO EVOLUTION PTE. LTD. strengthened its financial base by raising a total of JPY 3.1 billion (equivalent to USD 19.4 million) through a third-party allotment of new shares last year. With this investment from Sumitomo Mitsui Banking Corporation, CHITOSE Group will continue to lead the bioeconomy (*2), which is expected to reach a market size of USD 30 trillion by 2032.

Future Procurement Plans
Due to growing expectations for our efforts toward decarbonization and our activities to simultaneously promote sustainable manufacturing, CHITOSE BIO EVOLUTION PTE. LTD. has raised a total of JPY 4.1 billion (equivalent to USD 25.7 million), including the capital increase in September 2023, far exceeding our initial target. We will continue fundraising activities and aim to raise a total of over JPY 15 billion (equivalent to USD 94.2 million) by 2025.

Tomohiro Fujita, Founder & CEO of CHITOSE Group
In order to create a new industry called bioeconomy, we need not only the world's cutting-edge technological capabilities, that CHITOSE Group has cultivated since its founding, but also financial capabilities. This investment has been made utilizing SMBC Group's "Social Value Creation Investment Fund" (*3). We are honored to have been chosen as one of the partners by the SMBC Group, which is advancing initiatives for creating social value through its support for building the bioeconomy industry. We have also received words of expectation from the SMBC Group's executive members, which further strengthens our resolve.

*Note: All USD figures are the exchange value of the JPY calculated as of July 12th, 2024.

*1 Promotion of Carbon Recycling Using CO2 from Biomanufacturing Technology as a Direct Raw Material
https://green-innovation.nedo.go.jp/en/project/bio-manufacturing-technology/

*2 According to the fact sheet of President Biden’s executive order in September 2022, “Executive Order on Advancing Biotechnology and Biomanufacturing Innovation for a Sustainable, Safe, and Secure American Bioeconomy”, the bioeconomy market will reach approximately USD 30 trillion by 2030.
https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/12/fact-sheet-president-biden-to-launch-a-national-biotechnology-and-biomanufacturing-initiative/

*3 SMBC Group's news release “Establishment of Expense Budget for Creation of Social Values” dated May 17, 2024.
https://www.smfg.co.jp/news_e/pdf/e20240517_01.pdf

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