Financial terms of the deal were not disclosed.
Algatech has developed technology that allows the large scale cultivation of microalgae. Its production facility is located in Israel's Arava desert, where the hot climate allows microalgae to flourish in over 300km of glass tubing.
From the microalgae is harvested the company's key commercial product, astaxanthin, a powerful natural antioxidant for human consumption.
Clinical trials have shown that astaxanthin can play an important role in supporting a healthy immune system and promoting joint health, skin health and muscle functions.
Grovepoint said on Sunday it believed there was significant potential to grow the range of products where astaxanthin was the key ingredient and to exploit the potential of microalgae derived products for other commercial applications.
As well as acquiring a majority stake in the business, Grovepoint said it would make additional capital available for growing the business, marketing Algatech's Astapure brand around the world and investing in research and development, so that new algae derived products can be brought to market.
"We believe astaxanthin and other microalgae based products have a great future," said Leon Blitz, a partner in Grovepoint. "It is our intention to build the company by increasing its R&D capacity and expanding its distribution."