August 2, 2021

photo credit: NovoNutrients

By Lynda Kiernan-Stone, Global AgInvesting Media

Hong Kong-based Happiness Capital led $4.7 million in funding for NovoNutrients, an alternative proteins company using industrial carbon dioxide emissions, inexpensive hydrogen, and naturally occurring microbes to make high-grade protein for human and animal consumption.

This round also included new investors E2JDJ and Marinya Capital, and re-commitments from existing investors SOSV’s IndieBio and the Grantham Environmental Trust. 

This funding is in addition to $4.3 million in venture backing previously raised by the company, as well as a multiple of that sum in non-dilutive, corporate project funding commitments.

Located in Silicon Valley, NovoNutrients’ technology is a form of fermentation, similar to the process for making beer or wine. Using CO2 and hydrogen as feedstock for naturally occurring microbes, the startup produces a variety of highly nutritious protein flours with amino acid profiles surpassing those of soy, suitable for the production of foods like plant-based burgers, or to replace otherwise expensive proteins in animal feed rations.

“NovoNutrients’ uniqueness,” said Eric Ng, CEO, Happiness Capital, “is the combination of its current focus on alternative protein, its use of carbon capture and inexpensive hydrogen, and its creation of a robust platform for making both natural and synthetic biology products.”

“Beyond nutrition, we expect its platform to make other bio-based chemicals and materials. Its tech is exceedingly cost effective and promising for addressing increasing global demand and greenhouse gas emissions.”

CO2 Too 

Reading about NovoNutrients’ business model gives the impression of the process being almost unbelievably futuristic. However, the company is not alone.

If we glance toward Helsinki, we’ll find Solar Foods, a spin-off from a VTT and LUT research program founded in 2017, that raised $5.1 million in December 2020 (following a Series A close at $21.8 million in September 2020) to make protein using a similar bioprocess involving only air and electricity.

Using renewable energy and air-captured carbon dioxide (CO2) in a complete and continuous mode, the company makes Solein®, a novel type of nutrient-rich protein that the company has used to develop more than 20 different kinds of food products.

Neck-and-neck is NovoNutrients, which plans to use its latest funding to complete its industrial pilot program which captures CO2 emissions at an oil and gas, or cement-related plant – projects that will position the company to secure Series A financing later this year.

Tied to this, NovoNutrients plans to co-locate its bioreactor systems at industrial sites that produce high levels of CO2, which, at a global scale, the company aims to have the potential to reduce by gigatons.

“The progress at NovoNutrients, “said David Tze, CEO, NovoNutrients, “stands on the shoulders of three generations of fermentation pioneers that were mainly in biofuels. Now, we believe we have found the path to high-value products and affordable industrial scale, by using greenhouse gases instead of corn.”

“In the three years since our November 2018 Indiebio demo day,” continued Tze, “we’ve prototyped protein-based products that have a market value 10x our original one, which was targeted at replacing ingredients made from wild-caught fish. We have been able to do that without increasing our cost of fermentation. We are rapidly accelerating to industrial scale. Our current pilot project is centered on a 1,000-liter bioreactor. Shortly thereafter, we will stand-up a 20,000-liter industrial demo.”

Eric Ng, CEO, Happiness Capital, (which also invested in Beyond Meat, Redefine Meat, and Ynsect), commented, “NovoNutrients has taken major steps towards becoming one of the world’s biggest suppliers of innovative protein ingredients by 2030. The executive team has achieved tremendous support, not only from us, but also from prior visionary investors, as well as project funding from powerful corporate partners.”

Kumiko Yoshinari, NovoNutrient’s VP of strategic partnerships and former executive at the International Finance Corporation managing more than $2 billion in project financing, explained how the non-dilutive funding raised by the company and its pilot project plans coalesce to position the company for success, saying, “Non-dilutive project funding from corporate partners, including a Catalyst Grant from Chevron Technology Ventures, is a critical accelerator.”

“By building NovoNutrients facilities at commercial scale on the industrial sites where CO2 and hydrogen are generated, we will be able to trial the technology with new partners. We could enter joint ventures or license the technology, which we’ve already done. That allows us to scale without making heavy capital investments.” 

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.