Halifax-based Novagevity has borrowed $300,000 from the Atlantic Canada Opportunities Agency and closed an angel funding round as it prepares to launch its plant-based nutritional drinks in the fall.

Founded in 2019, Novagevity is dedicated to making organic meal replacements under the brand name Sperri. It was founded by serial entrepreneurs Gregg Curwin and Mary Lynch, both of whom have led successful life sciences companies in Halifax.

Curwin, the company’s CEO, said in an interview that Novagevity will distinguish its products from existing meal replacement drinks by making them 100 percent organic and highlighting their Canadian origins.

“We know that, whether you’re unwell or well, high-quality plant nutrition can really help you get healthy and stay healthy,” Curwin said. “And conversely, putting synthetic ingredients into your body not only won’t help you get better, but it could make you sick.”

Curwin is best known as the founder of TruLeaf Sustainable Agriculture, which combines hydroponics, LED lighting and machine learning to produce vegetables indoors. He stepped down as CEO in December 2018 and McCain Foods, which had invested in the company, assumed management control.

As well as being a Dalhousie University professor, Lynch was a Co-Founder and President of Panag Pharma, which is developing cannabis-based pain treatments. In late 2018, it was acquired for as much as $27 million by Ontario’s Tetra Bio-Pharma.

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Curwin and Lynch are planning to pilot the drinks in August, with a full rollout in September. As well as selling the product through the company’s website, they expect to target health-related institutions such as hospitals, residential care homes, and pharmacies.

Curwin expects Sperri’s products to appeal to both ill and healthy consumers.

For healthy consumers, he said the benefits will centre on convenience. He said McDonald’s found its customers often purchased milkshakes as breakfast substitutes, showing there is consumer demand for meal substitutes that can be consumed on the fly.

For ill consumers, Sperri’s value proposition will have more to do with improving customers’ overall health. In long-term care homes, for example, residents may struggle to consume enough nutrients. A 2015 study by the British Association for Parenteral and Enteral Nutrition estimated that about one-third of U.K. long-term care home residents suffer from malnutrition.

As well as addressing a medical need, distributing Sperri drinks through medical institutions will allow Novagevity to benefit from the information-gathering opportunities that come with controlled environments.

The team hasn’t finalized its pricing yet, but Curwin expects to see “very strong margins” and price points that are slightly higher than competitors'.

“I think that’s representative of where we are in 2020,” he said. “If you want high-quality nutrition in food, it’s going to cost you a little more.”

The company so far has seven employees. Curwin and Lynch expect to increase that number to as many as 15 by late December, depending on sales growth, and possibly to as many as 25 in 2021.

Despite the adverse economic effects of COVID-19, Curwin said funding has not been a major obstacle so far. Though he declined to say how much the company raised from angel investors, he said the round was oversubscribed.

“I think it was the team,” he said, describing why he believed investors had stayed on board despite the economic crisis. “If you look at us collectively, and our advisors both on the medical and business side … that was compelling.”

ACOA issued the loan through its Business Development Program, which gives zero-interest loans to small and medium-sized businesses.

Curwin expects to follow that funding with a seed round this fall.

Novagevity’s manufacturing and distribution partners are based in Ontario, so Curwin said he is conscious of the need to move quickly, in case a second COVID-19 wave interrupts production and logistics operations.

“We are definitely operating with a sense of urgency to get this product to market as soon as possible,” he said. “But we look at what processes [to] move in house. Do we manufacture ourselves? That’ll be a decision looked at hard in 2021.”

Disclosure: ACOA is a client of Entrevestor