Infusd Nutrition has raised a round of angel funding and is working with 10 international beverage ingredient-makers to implement its technology in their businesses under licensing deals, just months after the Halifax startup launched.

Infusd was founded by lawyer Jack MacDonald and chemical engineer David Giffin, and based on intellectual property developed over the last five years at post-secondary institutions such as Dalhousie University. It has developed a process to make fat-soluble nutrients, such as omega-3 fatty acids and many vitamins, water soluble.

That breakthrough makes it possible for the companies that manufacture ingredients for beverages like sports drinks to augment their products' nutritional contents. The process can also be used to dissolve natural colouring and flavouring agents, which tend to be fat-based and are prone to separating from beverages.

“What we say is we’ve cracked the code on a solubility problem that’s been looming over the health and wellness industry for many years,” said MacDonald in an interview. “We’re finally able to get these products into water at efficacious doses.

“Other companies have tried to get these products to be water soluble, but our process allows us to do it at dosages where the consumers are actually able to consume a meaningful amount.”

Infusd will sell its technology under a licensing model, adapting its processes to match the needs of ingredient producers at its research and development facility in Windsor, N.S.

South of the border, meanwhile, MacDonald and Giffin are pursuing a second revenue stream: producing their own ingredients with the help of a co-manufacturing facility in upstate New York. That plan will likely include working with the cannabis industry, since the companies that make cannabis-infused beverages face similar technical hurdles to those that affect natural flavours and colours, and in a market that is still fast-evolving.

The facility in Windsor is capable of producing 20,000 servings of a given ingredient per day to help Infusd test new formulations and help its licensing clients scale their manufacturing processes, while the New York facility will have capacity for 1 million servings daily.

“If (licensing clients) are, say, category-dominant companies with huge market share in whatever nutrient we’re talking about … then we’re very open — especially if they do a lot of their business overseas — we’re very open to doing exclusivity and licensing agreements with them in their facilities,” said MacDonald.

An additional benefit of Infusd having access to the co-manufacturing plant, he added, is that licensing customers will be able to purchase ingredients directly as a stop-gap measure while they build out their internal production capabilities.

In February, the company was also one of 15 selected to participate in the Canadian cohort of California agtech venture capital shop SVG Ventures' THRIVE Agrifood accelerator. The program targets seed stage or Series A companies and is widely recognized as one of North America's leading agtech startup programs.

Infusd now has four employees, following its official launch in June, and MacDonald plans to hire someone to work specifically on research and development in January. Some of the cost associated with that new hire will be paid for with the help of a $241,000 grant from industry group Natural Products Canada, which is funding part of a larger $603,000 research and development push by the company.

“We’re solving a problem that people have been trying to solve for decades,” MacDonald said. “I think there’s a massive opportunity across categories with our technology."