Dalan Animal Health is working to sell its bee vaccines to commercial beekeepers and governments – and potentially expand to other invertebrates.



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How do you vaccinate a honeybee? And will beekeepers care enough to do it?



Those are the questions Annette Kleiser has been wrestling since founding Dalan Animal Health in 2018. Five years after launching the startup, the government approved an oral vaccine her team created that’s designed for the world’s beekeepers to feed to worker bees, which then feed it to their queens in royal jelly. The result, strangely enough, is immunity for the queen’s offspring. Now, she’s on a mission to get as many bees vaccinated as she can — helping to safeguard not only the hives but the crops that they pollinate.



“We know that the loss of insects is dramatic for this world,” Kleiser said. “We cannot survive on this planet or anywhere else without insects.”



The Dalan vaccine defends against a devastating bacterial disease aptly named American Foulbrood, and Kleiser sees it as a first step toward keeping the roughly 3 million honeybee colonies in the U.S. healthy. It’s not the only disease bees can suffer from; about 50% of colonies and millions of bees die each year from a variety of ailments, including a nasty parasite called the varroa mite, pesticide poisoning, inadequate nutrition and the stress of traveling around the country to pollinate crops. Those are devastating numbers for beekeepers: “Imagine a cattle farmer losing 30 to 50% of their cattle each year,” said Matt Mulica, a senior project director at the Keystone Policy Center, which facilitates the Honey Bee Health Coalition. “How do you combat that?”



Kleiser and her team at Athens, Georgia-based Dalan Animal Health believe specially designed bee vaccines are an important tool in keeping more bees alive, enabling commercial beekeepers (who may have some 5,000 to 30,000 colonies) to continue bringing them around the country so they can pollinate crops like almonds, blueberries, cucumbers and apples.



“If you have an outbreak [of American Foulbrood], the spores have such resiliency that the recommended treatment is to kill all the bees and burn all the hives,” said Tom Chi, founder of At One Ventures, who invested in a $3.6 million seed round in summer 2022 as Dalan was taking its vaccine against American Foulbrood through clinical trials. “It’s catastrophic if you get it.”



Kleiser, who has a Ph.D. in neurophysiology from the Ludwig Maximilian University of Munich, discovered the research that would lead her to bee vaccines when she was working to help universities transform academic work into businesses. While visiting the University of Helsinki, she met Estonian biologist and zoologist Dalial Freitak, who had an unorthodox idea: to inject an inactivated bacteria into a queen to improve the hive’s overall resilience to disease. Insects and other invertebrates don’t have antibodies like humans and other mammals do, so the traditional way of creating vaccines won’t work on them. “When I heard about the research, I was like, ‘Why isn’t anybody doing this?’” Kleiser recalled.



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“If someone cuts their winter losses in half because of these vaccinated queens, it would spread like wildfire.”Commercial beekeper Chris Hiatt
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Kleiser spun Freitak’s research out of the university, then they created a vaccine that’s mixed into the so-called “queen candy” for the queens’ attendants, who then incorporate it into the royal jelly that is fed to the queen. The result is that the queen’s larvae will be primed against the disease when they hatch.



Beekeepers are watching closely. “This is really new. I think that’s why it’s caused a lot of interest and excitement,” said Blake Shook, a commercial beekeeper in Leonard, Texas, who is testing out the new vaccine. And national governments are interested too: Kleiser said she is in conversation with half-dozen countries in Asia, South America and Europe about buying the vaccine to protect their countries’ bees (she declined to name which ones). She’s raised $14 million in venture funding from At One Ventures and Prime Movers Lab so far. While this is an early-stage startup with revenue below $1 million, Kleiser is optimistic she’ll be able to land major contracts with both governments and commercial beekeepers in the next year.



But there’s a major hurdle: convincing beekeepers that the cost of $10 per vaccine is worth it. “Everyone is interested,” Shook told&nbsp;Forbes.&nbsp;“But it is expensive, and beekeeping isn’t exactly a high-margin business.”



Russell Heitkam, whose Heitkam’s Honey Bees is a major producer of queens (he sells some 75,000 of them a year), said his customers are actively trying to understand the economics and value of vaccination. For a commercial beekeeper with 30,000 hives, the cost of vaccinating at $10 a queen adds up quickly, to roughly $300,000. Heitkam, who is working with Dalan on trials of the vaccine, told&nbsp;Forbes&nbsp;he’d like to see proof that the vaccines allow each colony of bees to become more dense with healthy insects that can produce greater quantities of honey and do more pollination. Dalan argues that the cost to vaccinate will be more than offset by having fewer bees die off and healthier bees survive, but Heitkam and other beekeepers want to see the vaccine do more than just protect against American Foulbrood, which commercial beekeepers can in part prevent through better beekeeping practices, like not sharing equipment between colonies and cleaning hive tools carefully.



“People call me and say, ‘Hey, I want to get some queens, should I get them vaccinated?” he said. “An average queen is $28, and now you want to put another $10 on top of that, so you need to be able to monetize that $10.”



But, he points out, “If their vaccine can produce one more frame of bees at pollination time, that will pay for itself.” A frame is the movable part of the hive and can typically hold 2,000 to 2,500 bees.



Adds Chris Hiatt, a commercial beekeeper with Hiatt Honey who is also president of the American Honey Producers Association: “In beekeeping, it’s word of mouth. If someone cuts their winter losses in half because of these vaccinated queens, it would spread like wildfire.”



That’s just for one bee disease. Dalan’s researchers are studying whether its vaccine can provide protection against others, especially a particularly harmful one known as deformed wing virus. So far, experimental trials across 400 commercial hives have shown an&nbsp;<a href="https://www.prnewswire.com/news-releases/new-research-from-the-company-behind-the-first-honeybee-vaccine-offers-hope-for-beekeepers-against-a-deadly-viral-pathogen-302243458.html" rel="noreferrer noopener" target="_blank">83% reduction</a>&nbsp;in the levels of a highly transmissible variant of the virus. “Anything above 65% to 70% is considered effective treatment, and we’re well beyond that,” investor Chi said.



The next step is to expand beyond honeybees to other invertebrates, starting with shrimp. “It was clear for me from day one that this is not only the solution for one insect, but potentially for all invertebrates,” said Freitak, the company’s scientific cofounder.



Like beekeeping, shrimp farming — a $40 billion market — suffers from double-digit losses each year from diseases, despite relying heavily on chemical pesticides that take a heavy environmental toll. “There are billions of losses, and shrimp production is growing and has a big impact on mangroves because of the chemicals used in shrimp farming,” Kleiser said.



Since the immune system of shrimp is similar to that of bees, she thinks Dalan could vaccinate maternal shrimp similarly to queen bees. The company has begun testing vaccines for a common shrimp disease, known as white spot syndrome virus, starting with small shrimp and then as they get big enough for commercial sale. The company said it’s beginning to see promising results with a 64% survival rate in early tests at an aquaculture research facility. “In shrimp, everything has failed in the field,” she said. “We believe our approach is so different that we have a chance of cracking the market.”



If a vaccine works for bees and shrimp, what else might it be able to do? Longer term, Kleiser believes that even mosquitoes, known for carrying diseases like malaria and dengue fever to humans, could be vaccinated, reducing outbreaks worldwide. As climate change raises the risks of formerly tropical diseases spreading north, the ability to vaccinate insects could ultimately be as important for human health as for food security.



“It’s much, much bigger than the honeybee,” Kleiser said. “The honeybee is big because we need this animal to survive to feed us, but the science that is unfolding is way bigger than this.”

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This Startup Makes A Vaccine For Honeybees. Shrimp Are Next.

Despite the overall funding decline, a significant portion of investments was directed towards climate tech, which accounted for 45% of all startup funding in Africa this year. Experts offer more insights.



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Fintech, while second in total amount raised, had the most startups securing $1 million or more during the period. However, female-founded and female-led startups continued to receive minimal funding, with 85% going to ventures without a female founder and 92% to companies led by male CEOs.
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Venture capital (VC) investments in Africa have hit a four-year low, with startups raising only $780 million in the first half of the year, according to research firm Africa: The Big Deal.



This figure represents a -31% drop compared to the second half of 2023 and a -57% decline from the first half of 2023, taking seasonality into account.



Dotun Olowoporoku, Managing Partner of pan-African seed stage fund Ventures Platform, tells FORBES AFRICA: &#8220;The recent drop is not entirely out of sync with the global trend in the VC &#8216;funding winter&#8217;. However, there’s hope for improvement as several VC funds have recently been closed, providing significant capital reserves, or &#8216;dry powder&#8217;, specifically for early and growth-stage startups in Africa.&#8221;



Two-thirds of the total funding was equity, and one-third was debt — a notable increase from the 17% average debt share since 2019. The bulk of investments, four out of every five dollars, flowed to startups in Africa&#8217;s ‘Big Four’ — Nigeria, South Africa, Kenya, and Egypt — with Kenya alone accounting for one-third of the total funding.



To enhance tech funding in other African countries, Olowoporoku identifies &#8220;seven main factors needed to work in sync to enable growth in the tech ecosystem and, by extension, tech funding”.



“These factors include the availability of seed risk capital, outsized entrepreneurial ambition, high-capacity technical talent pool, a large and expanding market, a sizeable number of curious early adopters, an enabling and responsive regulatory environment, and long-term stable political conditions.



&#8220;While the &#8216;Big Four&#8217; have benefited from some of these factors naturally, but deliberate efforts by ecosystem builders have been essential in integrating these elements to create structural advantages. Other African nations need to enable their ecosystem builders to synchronize these factors and overcome obstacles to bolster their tech funding lands,&#8221; he says.



The transport and logistics sector led the way, securing 28% of the funding, influenced by major deals involving companies like Moove and Spiro. Fintech, while second in total amount raised, had the most startups securing $1 million or more during the period.



However, female-founded and female-led startups continued to receive minimal funding, with 85% going to ventures without a female founder and 92% to companies led by male CEOs.



Kristin Wilson, Managing Partner of venture capital firm Innovate Africa Fund, observes a noticeable shift in investment strategies. &#8220;In theory, it does mean that investors are becoming more selective, focusing on startups with robust business models and clear paths to profitability. In practice, we’ve seen a lot of



regional diversification being explored to uncover untapped opportunities beyond traditional tech hubs like Nigeria, Kenya, and South Africa,&#8221; she tells FORBES AFRICA.



Wilson highlights an intensified emphasis on due diligence, which she hopes indicates a move towards sustainable, scalable solutions, particularly in sectors like fintech and climate tech.



However, she also expects a wave of consolidation within the tech ecosystem. &#8220;The funding crunch forces weaker startups to concede to acquisition offers from stronger startups. Investors should expect slower growth as startups navigate limited funding options, take more cautious approaches to scaling, and focus on core operations to conserve cash.&#8221;



For entrepreneurs seeking funding in this tight market, Wilson advises focusing on business fundamentals and building internal alignment. &#8220;Entrepreneurs should strengthen their revenue models and ensure clarity for boards, investors, and teams. Building internal stakeholder alignment increases the likelihood of maintaining sustainable operations that prioritize efficiency,&#8221; she explains.



Wilson encourages founders to build strong networks and leverage mentorship opportunities. &#8220;Leveraging the time away from chasing unproductive investment conversations allows them to gain valuable insights and quickly identify opportunities that they can capitalize on when capital becomes more available.&#8221;

Collage image of hands interacting with bar graph

African Tech Funding Hits Four-Year Low Amid Global VC Downturn. The Way Forward

According to the report by research firm Africa: The Big Deal, a total of $466 million was raised through $100,000+ deals by 121 startups, representing only half of the amount raised in Q1 2023.



The report found that equity remained the primary source of funding, comprising 71% of disclosed funding, while debt deals saw a significant decrease, constituting 28%.



One standout from the quarter was Nigerian mobility startup Moove, which secured $110 million, influencing funding trends across the continent. However, the majority of funding continued to flow to startups headquartered in the Big Four countries, with Nigeria and Kenya leading the pack.



In reaction to the report, stakeholders offer insights and recommendations for navigating the current funding landscape.



Oyin Solebo, Managing Director at ARM Labs Lagos Techstars Accelerator, tells FORBES AFRICA: &#8220;It appears as if we are experiencing not just an African, but a global reset in VC funding levels.&#8221;



Solebo continues: &#8220;For the coming quarters, with global inflation and interest rates still at record highs, we should expect similar declines in African startup funding versus the previous year&#8217;s equivalent quarter, as other asset classes will remain more attractive to more risk-averse investors. But there is light at the end of the tunnel. In the last few quarters, a number of notable VCs have announced new funds, meaning that there is more institutional money ready to be deployed in strong African deals.&#8221;



Solebo highlights the need for startups to focus on generating revenue and strengthening financial management amidst the decline in VC funding.



&#8220;We need more local capital to be deployed into our ecosystem. The continent remains heavily reliant on international investment – with around 70% of our funding coming from overseas,&#8221; says Solebo.



Maurizio Caio, Managing Partner at Africa-focused tech VC firm, TLcom, emphasizes the importance of evidence of traction for startups to secure funding.



&#8220;In the upcoming quarters, the funding landscape will heavily depend on the state of global macroeconomic conditions, deal flow quality on the continent, and possible evidence of successful exits of African VC-backed companies, which we project will improve during the rest of the year,&#8221; Caio shares with FORBES AFRICA.



Emmanuel Adegboye, head of Africa-focused pre-seed investment program, Madica, says: “The good news is that there are indications that there’s still a lot of early-stage investing activity on the continent with investors like Madica continuing to actively invest, just not a lot of large later-stage deals.



&#8220;I don’t expect a lot of drastic improvements over the next few quarters and it’s especially important for startup founders to continue to be prudent with managing cash flow and their expectations to close later fundraising rounds quickly. It might be important to add that while the pace in investments has been slower, this shift can ultimately lead to more informed, sustainable investments that would benefit both startups and investors in the upcoming quarters/long run,&#8221; says Adegboye to FORBES AFRICA.



Ifelade Ayodele, CEO and founder of fintech firm, Blaaiz, explains the multi-faceted implications of the report for emerging startups, stressing the need for flexibility, customer-centricity, and strategic thinking regarding exit options for investors.



&#8220;Specific industries may have begun to be less attractive for investors due to a combination of factors such as spending power of end users (heightened by inflation), alternatives, among others,&#8221; Ayodele notes to FORBES AFRICA.



Ayodele suggests that &#8220;emerging and potential startups may need to begin to rethink the purchasing power of end users and make necessary pivots&#8221;.



Ayodele urges startups to focus on solving actual problems &#8220;as opposed to perceived problems”, and think globally while acting locally.



&#8220;Startups may consider products that may thrive in at least two or more African markets duly backed by technology for scale and adoption,&#8221; Ayodele says to FORBES AFRICA.

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