March 4, 2020

By Lynda Kiernan

Breakthrough Energy Ventures, a fund created by Bill Gates and other investors to fight climate change, has led a $20 million Series A for C16 Biosciences. Waldencast and Future Tech Labs were new investors in this round, along with returning existing investors Y Combinator, DCVC, Sound Ventures, AME Cloud Ventures, and Liquid 2 Ventures.

This funding brings C16 Biosciences’ total funding-to-date to $24 million. 

Founded in New York in 2017, C16 Biosciences’ mission is to solve a widespread problem in the consumer space – palm oil. Found in nearly half the products on retail shelves today, palm oil is the most popular vegetable oil on Earth. Used in everything from ice cream, to bread, peanut butter, and cookies, use of the oil is expected to drive the global palm oil market to a value of $93 billion next year. 

But it is also the driving force behind expansive environmental degradation. Oil palm trees only grow best within five to 10 degrees of the equator – a region that is mostly tropical rainforest, and the deforestation caused by the palm oil industry not only destroys natural habitats for orangutans, rhinos, and elephants, but also emits about half a billion tons of CO2 per year into the environment.

“Palm oil plantations have been a significant driver of tropical deforestation, which is an important contributor to climate change,” said Philip B. Duffy, Ph.D., president and executive director, Woods Hole Research Center. “Intact forests are important buffers against climate change, absorbing roughly a quarter of human carbon dioxide emissions. They also provide habitat for a diversity of species.”

More than 250 global companies have made efforts over the past decade to clean up their supply chains and to mitigate the harm caused by palm oil production, but these measures have been met with limited success, with only 20 percent of the palm oil supply currently certified as sustainable.

A new solution could be found in C16 Biosciences – a three-year old startup that has developed a proprietary technology platform that uses bioreactors to produce a sustainable alternative to palm oil that offers the ability to better control the oil’s properties, along with a more efficient supply chain and full traceability.

C16 feeds a proprietary yeast with high-carbon content waste such as food waste from supermarkets, or byproducts from biofuel production – a method that uses low-cost inputs to keep cost of production down as much as possible.

“Biomanufacturing will play a critical role in meeting our climate challenges,” said Carmichael Roberts of Breakthrough Energy Ventures. “C16 Biosciences has developed an elegant biomanufacturing solution for palm oil replacement that positions the company to capitalize on the growing need for sustainable, low-carbon bio-substitutes.”

With the capital from this round, the startup plans to continue to scale up its technology, prepare for a commercial launch, and to recruit new talent specializing in metabolic engineering, fermentation, and product development for its team.

“C16 Biosciences’ mission is to stop deforestation driven by palm oil production,” said Shara Ticku, co-founder and CEO, C16 Biosciences. “Consumers want to buy the products they love, but they don’t want to buy products that are directly responsible for climate change. Our palm oil solution will enable consumers to continue buying the products they want while also making a planet-positive impact.”

The company is aiming to replace all palm oil in the supply chain that is linked to deforestation – a volume that stands at about 3 million metric tons per year, Ticku told Fast Company, adding that demand is expected to increase four-fold by 2050. 

“We have to introduce this technology into the market in a way that makes it most likely to succeed,” said Ticku. “So that means starting with smaller production volumes, but getting it into the market faster.”

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.