The challenge to develop grafts for tissue regeneration lies in the need to obtain a scaffold that will promote cell growth in order to form new tissue at a trauma-damaged site. Scaffolds also need to provide compatible mechanical properties that will support the new tissue and facilitate the desired physiological activity. Here, we used natural materials to develop a bio-composite made of unique collagen embedded in an alginate hydrogel material. The collagen fibers used to create the building blocks exhibited a unique hyper-elastic behavior similar to that of natural human tissue. The prominent mechanical properties, along with the support of cell adhesion affects cell shape and supports their proliferation, consequently facilitating the formation of a new tissue-like structure. The current study elaborates on these unique collagen fibers, focusing on their structure and biocompatibility, in an in vitro model. The findings suggest it as a highly appropriate material for biomedical applications. The promising in vitro results indicate that the distinctive collagen fibers could serve as a scaffold that can be adapted for tissue regeneration, in support of healing processes, along with maintaining tissue mechanical properties for the new regenerate tissue formation.