Vegetables are (NovoNutrients) the easiest way for a person to eat carbon dioxide. David Tze wants his startup’s protein to be a close second.
NovoNutrients’ Innovation
David Tze’s company, NovoNutrients, is pioneering a method to transform carbon dioxide into protein using microbes. This protein can serve as both human food and animal feed. Currently, the startup is focused on constructing a pilot plant in the San Francisco Bay Area, which will manufacture protein for companies seeking alternative protein sources.
Funding and Support
NovoNutrients has raised an $18 million Series A round led by Woodside Energy, an Australian energy company, and CM Ventures to support the construction. The final tally includes $3 million that Woodside pledged last year.
Preparation for the Pilot Plant
Tze said NovoNutrients spent the last year preparing for its pilot plant, including refining its bioreactor design. Once complete, the pilot will use much of the same equipment as a future commercial-scale plant, making it an important proving ground for its designs and microbial strains.
Unique Fermentation Process
NovoNutrients uses fermentation, like other companies, to turn carbon dioxide into more complex molecules. But unlike many of its competitors, it does not use a big tank that resembles what you might see in a brewery. Instead, NovoNutrients employs looped thinner cylinders, which Tze said helps lower the energy needed to mix the gases.
Tailored Microbial Strains
To produce those proteins, the company tailors the strains of microbes to digest waste streams with different gas mixes. The company can use synthetic biology techniques for some products to improve the microbes’ stability and efficiency. But for natural products, Tze said, NovoNutrients uses evolution and boosts it. “Our most relevant strain development is that we can tailor the strains through natural, non-GMO means to the specific mixed gases that will be available at a particular partner site,” he said.
Business Model and Strategy
NovoNutrients plans to make most of its money not by building and operating commercial-scale plants but by selling microbes and licenses to create, manage, and maintain the facilities. “We would also do marketing and business development for the products,” Tze said.
Path to Commercial Scale
Getting to that point will take some work, but Tze is confident that the pilot plant will produce the data needed to convince investors that a commercial-scale fermenter is worth the investment. He said the goal is to follow a “capital-light” path to market.
Interest from Pet Food Companies
In an unexpected twist, Tze said he has spent more time talking with pet food companies over the last year.
“In part, this has been a reaction to the widespread, decreased confidence and interest in alternative proteins for people,” he said. “On the other hand, it’s that the pet food sector has been faster to recognize the benefits of alternative protein.” It doesn’t hurt that people spend big on their pets, with total expenditures rising 78% from 2013 to 2021, according to the U.S. Bureau of Labor Statistics.
Market Potential for Pet Food
“There are parts of the market where there’s a significant willingness to pay for ingredients including, but not limited to, hypoallergenic,” Tze said. Because NovoNutrients’ protein would be new in many pets’ diets, Tze said it shouldn’t pose a problem for pets with food allergies.
