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The Spoon

Daily news and analysis about the food tech revolution

alternative 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.

Nourish Ingredients Raises $11M for Fermented Plant-Based Fats

Australian startup Nourish Ingredients, which makes plant-based fats, announced today that it has raised $11 million (USD) in initial funding. The round was led by Horizon Ventures and Main Sequence Ventures (a venture firm founded by Australia’s national science agency).

Nourish Ingredients has developed a proprietary yeast fermentation process that recreates the molecular structure of animal fats without using animal products. Additionally, Nourish’s process does not use existing materials such as coconut or palm oils, the harvesting of which is controversial because of the resultant deforestation and unethical labor practices.

In addition to being potentially more environmentally friendly, Nourish says that it’s fermentation process allows it to create flavor profiles and mouthfeel that more accurately mimic animal proteins such as seafood, pork, beef and chicken products.

Fermentation has been called “the next pillar of alternative proteins,” alongside cultured meat and plant-based proteins. We’ve already seen fermentation tech being applied in variety of ways including bee-free honey, animal-free cheese, and sausage patties.

At the same time, we’ve also seen a number of startups creating ingredients that help enhance non-animal proteins. Hoxton Farms is cultivating animal-free fats, and Swedish researchers are using electricity and carbon dioxide to turn air into fats.

According to a recent report from Boston Consulting Group and Blue Horizon Corporation, the market for alternative proteins is projected to hit $290 billion by 2030, but that ambitious figure comes with some caveats. First, alternative proteins much reach price parity with traditional animal meats, and there are a number of startups tackling that issue. Equally as important, however, is that alternative proteins must reach taste and texture parity with animal meat as well. If Nourish Ingredients’ technology works as promised, it will help alternative protein companies do just that.