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The Spoon

Daily news and analysis about the food tech revolution

alt-fat

Estonia’s ÄIO Raises €1 Million to Make Alternative Fats Out of Sawdust

Estonian start-up ÄIO has raised €1 million ($1.2 million) to develop alternative oils and fats for the food industry. The biotechnology firm, founded by TalTech bioengineers Petri-Jaan Lahtvee and Nemailla Bonturi last year, aims to replace environmentally depleting oils such as coconut and palm oils with sustainable, full-value alternatives.

ÄIO’s edible fats and oils are produced from agricultural and wood industry side-streams using processes derived from biotech research. The company’s proprietary production technique uses a fermentation process which the company says is similar to brewing beer or raising bread with yeast. During the fermentation process, the company uses what it calls a “red bug” microbe, created and patented by Bonturi. The result, according to ÄIO, is fats rich in healthy fatty acids and antioxidants.

“Our “red bug” cannot turn water into wine, but it can turn sawdust into food,” Bonturi said.

Nordic Foodtech VC, EAS, and other partners provided the funding. Mika Kukkurainen, partner and founder of Nordic Foodtech VC, said the global food industry is constantly searching for sustainable and healthy alternatives to palm oil and coconut oil. “Turning low-value side-streams into something so valuable is very futureproof and has great scalable business potential,” said Kukkurainen.

The company says it will use the funding to increase its production capacity, test products with the food industry, and apply for novel food permits to enter the European market. The company plans to begin industrial-scale production by 2026.

The news of ÄIO’s funding is the latest in an increasingly crowded field of startups looking to develop more sustainable fat alternatives for makers of alternative proteins. Last year CUBIQ raised €5.75 million, just a week after Melt&Marble announced they’d raised a €5 million Seed round to scale up production for its precision fermentation-derived fat alternative. In March, Lypid raised $4 million for its technology that microencapsulates plant oils in water to create spongy fats with high melting points. And last November,  Cultimate Foods announced it had raised a pre-seed €700 thousand to develop cultivated fat for hybrid alt-meat products.

Alt-Fat Gets Heavy Push From New Startups Creating Building Blocks For Realistic Meat Alternatives

As some of us work to shed pounds as bathing suit season approaches, a growing cohort of new startups developing new forms of healthier and more sustainable fat alternatives is bulking up on funding to scale production and roll out new products.

The latest alt-fat startup to raise funding is CUBIQ Foods, which announced today they have raised €5.75 million Euros ($6M USD) from Cargill and other investors. CUBIQ, which plans to use the new investment to expand commercial and production operations in North America and Europe, is developing a range of products that include plant-based fat replacements and cell-cultivated fat ingredients.

The company rolled out its first product in 2021, a plant-based fat replacer called GoDrop that improves juiciness with fewer calories and less saturated fats. The company, which initially had hoped to release its cell-cultivated fat by the end of 2020, is now eyeing a 2023 release of its cultivated fat in the US market.

The news of CUBIQ’s latest funding round comes a week after Melt&Marble announced they’d raised a €5 million Seed round to scale up production for its precision fermentation-derived fat alternative. Last year, Mission Barns raised an impressive $24 million for its cell-cultivated fat technology it hopes will plump up the flavor profile of alt-bacon, breakfast patties, burgers, nuggets, and more. And in March, Sunnyvale-based Lypid raised $4 million for its technology that microencapsulates plant oils in water to create spongy fats with high melting points.

The race to create new fat alternatives is part of the broader maturation of a future food industry where new startups work to create building blocks for other companies hoping to develop more realistic meat alternatives. This same “horizontalization” of future food is similar to what has occurred in other technology industries where startups can focus their funding and attention on single attributes or components of the end product. Other future food building block cohort sectors include sweeteners, collagen, scaffolding, and the many companies making alt-protein and flavor components for alt-meat and dairy products.