An American biosciences company has launched Aanika Re in Bermuda with initial backing from Adit Ventures, the global venture capital firm.

Aanika Biosciences was accepted into the Bermuda Monetary Authority’s “innovation hub” earlier this year, making the island the natural domicile for Aanika Re.

Adit, which has more than $400 million in assets under management, has agreed to seed Aanika Re, the insurance vehicle wholly owned by Aanika Biosciences Inc.

Aanika Re’s mandate is to leverage the microbial tagging technology developed by Aanika Biosciences, as well as a broader swath of biological innovations, to prevent, identify and mitigate various risks in the food and agricultural industries.

“No one in the trillion-dollar insurance market is looking at biology as a source of data,” said Vishaal Bhuyan, co-founder and CEO of Aanika Biosciences.

He added: “Traceability is at the heart of three main catalysts: 1) climate changes, which could lead to a significant rise in food safety issues; 2) FDA rules on traceability, which are coming into effect within 24 months; and 3) ESG compliance for public companies.”

With the ability to tag and distinguish identical commodities and deploy preventative technologies, Aanika Re can provide coverage in areas that have been historically difficult to insure and potentially provide a cost savings on existing types of coverage.

“We are really excited about Aanika and this opportunity,” said Jon Cholak, partner and co-chief investment officer of Adit Ventures and an Aanika board member.

He added: “It is rare to find compelling technology coupled with a difficult-to-replicate market strategy, which is what I believe Aanika has here.”

The insurance industry is familiar to Mr Bhuyan, who has co-authored three books with FT Press and Wiley, on the use of insurance to address issues such as overfishing, underfunded pensions and water scarcity.

Earlier this year, the company hired Catherine Bessleman, a seasoned and senior reinsurance underwriter formerly at Hamilton Re.

Adit Ventures is an employee-owned and operated asset management firm headquartered in New York.

The company said it managed early-stage and late-stage venture capital funds, selectively investing in dynamic, high-growth sectors such as AI/big data, cloud, critical infrastructure, cyber security, edtech, fintech, healthtech, internet of things, new media and entertainment and space.

Adit has invested in some of the world’s leading companies with exits in Airbnb, Astrocast, Cytocom, DocSend, Forge, Lemonade, Lyft, Palantir, Riff Analytics, Robinhood, Snap, SoFi, Spotify and Welltok.

Aanika Biosciences is a Brooklyn-based synthetic biology start-up that uses microbes to improve food safety.

The company was founded in 2018 by Mr Bhuyan and Ellen Jorgensen and has raised nearly $20 million in venture financing to date from notable investors such as Adit Ventures, Draper Associates and Plug and Play Ventures.