Allylix, based in San Diego, specializes in a process which allows terpenes - the class of natural hydrocarbons that give plants their characteristic flavors and fragrances - to be produced via fermentation in yeast.
Terpenes and their derivatives are commonly used in industry to modify flavors and fragrances.
This technology could replace the costly and laborious extraction of terpenes from plants and enables the cost effective production of flavors and fragrances for food, perfumes, personal care, and household markets.
The consortium comprises a number of groups including the Tech Coast Angels, who focus on investing in early stage companies in Southern California and are leading the investment.
Allylix's technique has great revenue potential, the investor said Stephen Block, lead investor for the Tech Coast Angels, said: " Allylix has developed promising proprietary technology and a solid business model for its commercial terpene product line, which is what initially attracted us to the company. "
The market growth and revenue potential for Allylix's products are enormous.
Allylix's low-cost process reduces the costs of producing terpenes to as little as 10 per cent of what to date have been the very high costs of traditional processes, thereby making these valuable compounds available to a wide variety of new market applications."
Initially, Allylix will focus on a class of terpenes called sesquiterpenes.
Sesquiterpenes are part of the $1.9bn aroma chemical segment of the flavor and fragrance market, Tate & Lyle said.
However, current prices for sesquiterpenes tend to be very high due to the limited supply of quality starting materials and the high cost of extraction and purification throughout the industry.
Allylix has identified a number of sesquiterpene flavors and fragrances whose markets would expand substantially if there were a low cost alternative.
Simon Barnes, Managing Partner of Tate & Lyle Ventures said, "This is a significant development for the fragrance and flavour market.
Not only can Allylix produce fragrances and flavours via a cost-effective route but the technology is also there to create entirely novel fragrances and flavours.
Allylix's fermentation technology is an excellent fit with our fund's focus on renewable ingredients and bio-technology."
Allylix added that they will use the capital to launch an intitial product line for the flavour and fragrance market, however, a timescale for this has not yet been disclosed.
Tate & Lyle Ventures was set up last year to help focus on next-generation ingredients.