HomeEstonia-StartupsCreating food from agricultural and wood sidestreams? Estonian startup ÄIO lands €1...

Creating food from agricultural and wood sidestreams? Estonian startup ÄIO lands €1 million to make it happen

Tallinn-based ÄIO has just secured €1 million to create alternative oils and fats, that are edible, developed from agricultural and wood industry sidestreams, and make for a more sustainable food system. 

Our current food system needs to change. It’s simply no longer sustainable to continue eating the way to do, cultivating food the way to do and perceiving food the way we do. Feeding our growing population in the context of a spiralling climate emergency has made the situation even more urgent, and now, we are seeing different food alternatives hit the market – aiming to make food supply chains and diets more sustainable, healthier and more planet-friendly.

Currently, the food system is responsible for an estimated third of all greenhouse gas emissions. Whilst plant-based alternatives are less pollutant than traditional livestock farming, they still have environmental impacts. Especially when it comes to different oil and fat products – palm oil being the most notorious. As highlighted by ÄIO co-founder Nemailla Bonturi: “Palm and coconut oils used to make plant-based meat alternatives, do not deliver the same taste and mouthfeel as animal fat. Also, the production of these oils is not sustainable, they are unhealthy and can cause allergic reactions.”

Tallinn-based ÄIO has a solution: creating edible oils and fats from by-products of the wood and agricultural industry. It’s circular, sustainable and could be a game changer.

Co-Founder Petri-Jaan Lahtvee: “Compared to livestock farming, plant-based meat also requires 47-99% less arable land, emits 30-90% fewer greenhouse gases and uses 72-99% less water.”

The startup has just secured €1 million, after being launched just last year, from investors including Nordic Foodtech VC, EAS and other partners.

Mika Kukkurainen, partner and founder of Nordic Foodtech VC: “Turning low-value side-streams into something so valuable is very futureproof and has great scalable business potential. We are happy to join ÄIO when taking the first steps outside of the university, and already looking forward in helping the team towards future success.”

Born in Tallinn, ÄIO has developed its solution based on research carried out in TalTech. Using a unique microbe (called ‘red bug’, created by Bonturi), the process involves transforming industrial side-streams into food products through a fermentation process, similar to brewing beer or raising bread with yeast. The fermentation process produces fats rich in healthy fatty acids and antioxidants. 

Bonturi: “In the same way that we make kombucha, yoghurt, bread, and beer, we can turn sawdust or other low-value biomass into valuable and healthy ingredients. Our “red bug” cannot turn water into wine, but it can turn sawdust into food.”

The biotech innovators believe its solution could prove a powerful solution to our food supply problem and it’s preparing to scale fast. With this new funding, the team plans to increase its production capacity, test products in cooperation with the food industry, and apply for novel food permits to enter the European market. By 2026, it is planning to start production on an industrial scale. ÄIO’s RedOil can also be used in cosmetic products and household chemicals, replacing lubricants and surfactants derived from petroleum or palm oil. 

Petri-Jaan Lahtvee: “As scientists, we were excited that years of research resulted in a real product that could revolutionize the entire food industry and consumer experience. We highly appreciate everyone who has contributed to our success story, and we will continue to develop the company and its products together with our partners, the leading investor, and the food industry. We will also continue to work with TalTech to train the next generation of bioengineers.”

Patricia Allen
Patricia Allen
is the Head of Content at EU-Startups. With a background in politics, Patricia has a real passion for how shared ideas across communities and cultures can bring new initiatives and innovations for the future. She spends her time bringing you the latest news and updates of startups across Europe, and curating our social media.
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