NoPalm Ingredients, a Dutch biotechnology company, has successfully closed a €5 million Seed funding round to advance its mission of creating sustainable, local, and circular alternatives to conventional palm oil. The round was led by Rubio Impact Ventures, with co-lead investments from Oost NL, Fairtree Elevant Ventures, Willow Capital Investments, and participation from The Netherlands Enterprise Agency (RVO) and other private investors.
Addressing Environmental and Supply Chain Challenges
Founded in 2021 by Lars Langhout and Professor Dr. Jeroen Hugenholtz, NoPalm Ingredients aims to tackle the environmental and supply chain issues associated with traditional palm oil production. Palm oil is a ubiquitous ingredient found in 60% of supermarket products, yet its production is linked to significant deforestation and greenhouse gas emissions. NoPalm Ingredients employs a unique fermentation process using non-GMO proprietary yeasts combined with a patented low-capex technology to transform upcycled, locally-sourced agri-food sidestreams, such as potato peels and whey permeate, into yeast oils.
Lars Langhout, CEO and Co-founder of NoPalm Ingredients, emphasized the critical need for their innovation:
"Often, the answer isn’t to prohibit a product but to step back and create a superior alternative that naturally compels a switch. This funding is pivotal for us to demonstrate large-scale production and reach our next milestone of producing 1.5 million kilograms of sustainable oil annually, solidifying our role as a trusted partner in the food and personal care industries. We are on track for industrialization and commercialization in 2025".
NoPalm Ingredients’ process offers a remarkable reduction in environmental impact: a 90% decrease in CO2 emissions and a 99% reduction in land use compared to traditional palm oil production. The technology is asset-light and quick to scale, making it an ideal solution for a market in dire need of sustainable alternatives.
Customer feedback has shown that these yeast oils can serve as a perfect drop-in replacement for palm oil, requiring no recipe reformulation and achieving price parity. This makes them an attractive option for major industry players such as Colgate-Palmolive, Unilever, and Zeelandia, who have already tested and validated the product.
The Need for Innovation
The global demand for palm oil grows by 4% annually, with an additional 22 million tons needed by 2030. This demand threatens to clear rainforests 1.5 times the size of Ireland. New regulations banning deforestation-related products mean that European companies can only source sustainably certified palm oil, excluding 83% of current supplies. This will likely drive price increases affecting consumers across Europe.
Trends in Biotechnology Startups
NoPalm Ingredients exemplifies a broader trend among biotechnology startups focused on sustainability and circular economy principles. These companies are increasingly leveraging advanced fermentation technologies and non-GMO methods to create high-value products from low-value waste streams. This approach not only addresses environmental concerns but also meets the growing consumer demand for sustainable and ethically produced goods.
David Evans, Managing Director at Fairtree Elevant Ventures, praised NoPalm’s cost-effective and innovative solution: “NoPalm Ingredients’ innovation allows them to upcycle industrial food waste streams which recovers carbon and creates value from waste, creating tremendous benefit. They have demonstrated both the technical capabilities and the commercial partnerships to rapidly scale their technology and make an incredible impact across a wide swathe of industry”.
Startups in this space are also benefiting from an increase in impact investment funds. Investors are looking for ventures that combine strong potential for financial returns with positive environmental and social impacts. Here are some notable trends and companies in this space:
Precision Fermentation and Sustainable Fats
Nourish Ingredients: This Australian startup, specializing in precision fermentation to produce fats that replicate the taste and texture of animal fats, recently partnered with Fonterra, a global dairy cooperative. Nourish Ingredients has raised US$28.6 million in a Series A round led by Horizons Ventures. Their flagship product, Creamilux, aims to deliver the creamy mouthfeel of dairy without using animal products.
Melt&Marble: A Swedish company developing precision fermentation-derived fats for use in plant-based meats. Melt&Marble raised $5 million in Seed funding in 2023, aiming to enhance the taste and texture of plant-based foods.
Alternatives to Palm Oil
C16 Biosciences: Based in the United States, C16 Biosciences is using microbial fermentation to produce palm oil alternatives. The company has raised $20 million in Series A funding, backed by Breakthrough Energy Ventures and others. Their goal is to produce sustainable palm oil that can be used in food and cosmetic products without the environmental impact of traditional palm oil plantations.
Tropic Biosciences: This UK-based startup focuses on gene-editing technologies to develop high-yield, disease-resistant palm oil plants. Their innovative approach aims to increase the sustainability and productivity of palm oil production. They recently raised $28.5 million in a Series B funding round.
Protein and Dairy Alternatives
Perfect Day: A leader in the precision fermentation space, Perfect Day produces animal-free dairy proteins. They have raised over $360 million in multiple funding rounds and have partnered with various food brands to bring their products to market.
The Every Company: This company uses precision fermentation to produce egg proteins without chickens. The company has raised over $50 million and aims to disrupt the egg protein market with sustainable and scalable alternatives.
The Health and Environmental Impact
The problems with conventional palm oil are multifaceted. Environmentally, palm oil plantations are a leading cause of deforestation, threatening biodiversity and contributing to greenhouse gas emissions. Health-wise, palm oil has been associated with various health issues due to its high saturated fat content. Sustainable alternatives like those developed by NoPalm Ingredients and other biotech companies not only mitigate environmental damage but also offer healthier options for consumers.
Tijl Hoefnagels, Venture Partner at Rubio Impact Ventures, highlighted the environmental urgency: “Palm oil driven land use change threatens catastrophic loss of richly biodiverse equatorial rainforests and is responsible for more emissions every year than the entire airline industry. Companies like NoPalm Ingredients are critical to preventing further pressure on our strained planetary boundaries”.
NoPalm Ingredients’ successful funding round and innovative approach position it at the forefront of sustainable palm oil alternatives. As the company moves towards industrial-scale production, it aims to become a key player in the food and personal care industries, providing a viable solution to one of the most pressing environmental challenges of our time. The support from prominent investors underscores the confidence in NoPalm Ingredients' ability to make a significant impact on global palm oil supply chains and environmental sustainability.
Similarly, the partnerships and advancements in the biotech sector highlight the potential of precision fermentation and other innovative technologies to transform the food industry. As startups continue to innovate and attract significant investments, they pave the way for a more sustainable and ethical food system.
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