Halifax-based Smallfood is one of eight Canadian startups to receive a combined $2.5 million of funding from industry group the Canadian Food Innovation Network.

Smallfood is taking home $98,932, just seven months after the company and one of its collaborators were also announced as a semifinalist in the $15 million foodtech edition of the prestigious XPRIZE startup competition.

The latest investment comes as part of the Food Innovation Network's eponymous Food Innovation Challenge, which backs process innovation, the sustainable economy and businesses looking to improve supply chain agility or resiliency.

Led by serial entrepreneur Mark St-Onge and founded in 2018, Smallfood is developing protein-based ingredients for the food and animal feed industries, manufactured via industrial-scale algae fermentation.

“Alternative proteins can offer consumers nutritious, healthy food options; but innovation in the space is required to realize the maximum economic, ethical, and environmental benefits this category of food products can achieve,” said the Food Innovation Network about Smallfood in a statement.

For the XPRIZE, dubbed Feed the Next Billion, Smallfood is working with Toronto’s Terra Bio on an imitation-fish product they have called ProFillet. The two startups are the only multi-company team in the competition and beat out hundreds of other applicants to reach the semifinals.

The finalists for the multi-year competition will be announced in the third quarter of 2023 and the winners will be announced in the first quarter of 2024.

“Smallfood's novel microalgae fermentation process produces sustainable protein and omega-3 DHA, and when combined with TerraBio's process we create a scalable zero-waste food system able to sustainably feed a growing planet,” said Smallfood’s St-Onge in a statement.