We’ve published 189 in-depth profiles of super-early-stage B2B and deep tech startups so far here at PreSeed Now.

While our Startup Tracker keeps you updated on funds raised, pivots taken etc by as many of those startups as possible, we’ve never taken time to properly catch up with one of of our past startups.

So today, let’s talk to Pipeline Organics, a compelling startup we first featured 10 months ago, when they had just started out on their fundraising journey.

Today they’ve announced they’ve raised a £1.5 million pre-seed round. But how did that play out? How easy was it to raise? What challenges did they had to overcome? And how have their business plans and technology evolved?

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How Pipeline Organics raised £1.5 million

Let’s recap: what is Pipeline Organics?

When we met Pipeline Organics last October, we explained how this Nottingham-based team had come up with a way to generate electricity from organic matter in wastewater.

They planned to commercialise it in the water industry, and possibly other markets like food production.

Read our original profile for a full recap 👇

What have they raised?

Since we first spoke to them, they’ve pivoted and today have announced they’ve raised a £1.5 million pre-seed round.

The round comprises £900,000 in equity investment from CCEP Ventures, SFC Capital, Vala Capital, and climate angel investor, Pasinee Tangsuriyapaisan, plus a prior Advanced Subscription Agreement from XTX Ventures. This is rounded out by £630,000 of Innovate UK grant funding.

The fact their lead investor is none other than the venture arm of drinks giant Coca-Cola Europacific Partners might give you an idea how things have played out since we last spoke to them.

I spoke to Pipeline Organics CEO and co-founder Arielle Torres to find out more…

MB = Martin SFP Bryant / AT = Arielle Torres

MB: So, what’s happened since we last spoke?

AT: When we last spoke in October, we had just started looking at raising. At that point, I had sent out decks to one or two investors and we were still very much updating the deck figuring out what they wanted to hear and see.

Then, two major events happened November that were a turning point for us on the raise front.

We made it through to the Engineers in Business final. I ended up winning two awards on behalf of Pipeline, and we received an £8,000 cash prize. That was an exciting pitching opportunity and brought a few interesting leads into our network.

Then a few weeks later, we had the Conception X Demo Day, and we pitched alongside other exciting startups. And again, that brought a few investors to our doorstep.

Fast forward a few weeks, we got our first offer of investment and then the next working day a second offer. So things were looking quite good at the end of last year.

These investors were eligible investor partners for the Innovate UK Investor Partnership programme. We had an application to apply for grant funding and we just needed investor support to say ‘yes, we're really interested and we might invest and therefore you can apply to see if you can get the grant to match fund the investment’.

We ended up submitting our application with one of those offers in early January. We found out in February that we were successful.

MB: How did the raise play out? Was it straightforward?

AT: We had been speaking to Coca-Cola Europacific Partners (CCEP) Ventures, since summer last year. Then in January they indicated interest in investing, after we had conducted some case studies with them.

In March they gave us a term sheet. But we did have a hiccup where we were supposed to have two lead investors. The other, which I won't name, ended up pulling out the day that CCEP gave us a term sheet. They didn't quite align on terms there. So about 40% of our target round was gone in one day.

The next two months were about picking up the pieces and finding other investors to fill the gap. In the end, we ended up closing in early June with CCEP leading, and it was a total of £800,000.

We’d also been offered a £100,000 Advanced Subscription Agreement by XTX Ventures last summer, and we accepted it in November. So that converted with this round as well. That meant the net pre-seed is £900,000, although we had that £100,000 ASA earlier in the year.

The project we’d applied for with Innovate UK meant we got a £630,000 grant alongside the investment.

We started that project this month, because we had to wait until the investment closed before we could access that pot of money.

We have partnered with CCEP with a plan for feasibility studies over the next few months. We have site visits planned and we hope to finalise the design for mini-pilots and get something in an operational setting very soon so we can start to translate what we've done in the lab into a commercial setting.

MB: Has the actual technology changed at all since we spoke or is it just a case of moving forward towards making it a commercial reality?

AT: Based on a combination of commercial and technical data, we pivoted away from the water industry.

Now we're fully on focused on the food and beverage industry. That's all we're thinking about right now. We’re not really paying attention to wastewater treatment sites at the moment. It just makes commercial sense.

As a result, we've been tailoring the technology for those applications. I think we were on TRL (Technology Readiness Level) 3 when we last chatted. I'd say now we're TRL 4.

We’re building a full fuel cell assembly and then testing that everything works. And we're getting quite promising results. It's helped having another two employees as well. We're now a team of six. Another four hands in the lab really makes a big difference.

And we now have our own lab space and office space in MediCity. We’re proudly still in Nottingham and we'll probably stay here for the foreseeable future.

Having our own space is a big thing for motivation. Also, my co-founders are more or less full time as well. So the number of full-time equivalent employees has increased as well.

MB: What does the year ahead look like?

AT: On the technical side, there are two streams in which we're progressing.

One is on the chemistry which deals with coating and the enzymes. The other one is more on the engineering side, looking at the design and optimisation of the electrodes - the 3D-printed, complex lattice structures that ultimately give us this next generation fuel cell. Because it has a high surface area, it can provide high energy densities from a small space of volume.

I have a really interesting line I like to say now, to give you an idea: if we made a fuel cell the size of a single brick you can hold in your hand, that would have the same annual electrical output per year as a full scale 590-watt solar panel.

That gives you an idea of how much potential space we're able to save. Think about how many bricks we can stack in an on-site fluid tank or wherever the wastewater is collected, versus how much roof space is available on these bottling plants etc.

Obviously, we're not trying to solely solve for clean energy demands, but we can definitely make use of this compact design in many ways.

So the future is mainly about solving for the chemistry side in the short term. Tangential to that, we will continue looking at the engineering side, mainly looking at how we can scale manufacture.

We're in the process of finalising a partnership to explore a range of different manufacturing techniques that we haven't considered before, just to confirm that what we think is the right way forward is definitely the most cost effective and time efficient, etc.

On the chemistry side, we're partnering with some experts to explore a different range of enzyme options to see if we can get a more efficient coating. But in the meantime, we're still optimising the protocols and making sure we can make it work for our target customer.

We’ll continue to solve for that and trying to conduct studies in situ, get data, optimise, and hopefully, in the next 12 to 18 months we'll be able to hit some commercially viable power outputs. At the very least we’ll move into larger scale pilots with full integration into sites, or start making early sales of our first product, which will be ready for installation in mid-2026.

On the commercial side, we’re continuing to explore food and beverage applications. We pivoted not too long ago to spend a lot of our time really focusing on soft drinks. But now we know that we can also target beer, potentially dairy, fruit juices, vegetable or fruit preserves, and things like Heinz beans.

There's a whole array of food and beverage sectors that we think we can apply to. So on the commercial side, we’ll explore those further to the customer discovery point and embark on maybe one or two additional co-innovation partnerships similar to what we're doing with CCEP, but maybe with one or two of the other target sectors.

That will help us identify where a beachhead sector is within the market, and hopefully lead to a first sale from one of those partners as well, in the next year or two.

Next time…

It’s summer, the quietest part of the year for early-stage startup fundraising. That means we put the startup profiles on hold in late July into August, and explore other parts of the pre-seed startup experience.

Is there something you’d like us to look at? Drop us a line and let us know.

Look out for our next edition in the coming days…