Shanghai-based fund leads $2M investment in Cerahelix

Cerahelix Inc., the Orono-based startup that’s invented a high-tech filtration device using DNA and ceramics, today closed a $2 million round of fundraising that will help it expand its manufacturing and sales-and-marketing efforts.

The $2 million round was led by PureTerra Ventures, a private equity fund based in Shanghai, China. The fund is Dutch-managed and focused on “investing in disruptive water technologies,” according to its LinkedIn company page.

Other investors in the round include Maine Venture Fund and Propel(x), a Silicon Valley-based investment platform that allows angel investors to pool their investments in a syndicate to invest as a single entity in a startup.

“This money will be used for our planned manufacturing expansion, increased sales and marketing activities, and to support our current operations,” CEO Susan MacKay said.

Cerahelix, founded in 2011, has invented a new filtration technology that uses DNA to essentially create DNA-sized holes in ceramic material to make a filter. These nanofiltration devices—the company has branded them PicoHelix filters—can remove impurities from water that are 100 times smaller than a virus, according to the company. The PicoHelix filters are applicable across multiple industries, from the brewing industry (the company has a pilot project at Magic Hat Brewing in Vermont) to the pharmaceutical industry, but the company’s main target is treating industrial wastewater for re-use, which MacKay calls the “fastest growing sector in water today.”

“This is a growing problem in that under ‘business as usual’ the world’s water needs will exceed supply by 40 percent by 2030,” she said. “This fact is pressuring industry to significantly reduce its water footprint especially in regions prone to drought.”

The company’s revenues to date have been a mix of sales of filters and services, in which the Cerahelix team works with prospective clients to determine if using the high-tech filters will solve their problems, MacKay said.

“We have completed several trials this year with another one beginning next week, and we have $1 million in potential sales in our current pipeline,” she said. “Our goal this year is to convert as much of that to actual revenue as we can and to increase our pipeline prospects.”

The company is currently based at the UpStart Center for Entrepreneurship in Orono. While the company’s administrative office and R&D lab will remain there, the new capital will allow the company to expand its manufacturing by moving into 1,500 sq. ft. of leased space at the Bangor Innovation Center.

“Our membranes that we make using the DNA template are extremely thin (<100nm) so we don’t need a large footprint manufacturing space, just one where we can control the climate to create high quality membranes," MacKay said. "We coat our membrane on top of purchased filter supports, so the new space will also allow us to store inventory and do all our shipping and receiving." The company currently employs nine people, including six in Orono, but has plans to hire an addition three to four people this year, MacKay said. The company first revealed its intention to raise $2 million in a filing made last June with the U.S. Securities and Exchange Commission, which Maine Startups Insider reported at the time. The company raised an initial tranche of $500,000 at that time. It has since raised another $1.5 million to close out the round.

However, MacKay tells MSI that the round could grow as she has left the option open to add additional funds “due to interest from some other investors who are still engaged in due diligence.”

Including this $2 million, the company has raised $3.9 million over the course of three rounds. It has also received an additional $2.5 million in non-dilutive grants, according to MacKay.