Novonutrients modifies its insects to turn CO2 into protein for people and pets

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The easiest way for a person to eat up carbon dioxide is to eat vegetables. David Tze wants his startup’s protein to be a close second.

Tze’s company, NovoNutrients, is working on a way to use microorganisms to convert carbon dioxide into protein that can be used in food for humans and animal feed. Now, Tze said the startup is working toward building a pilot plant in the San Francisco Bay Area that will produce protein for companies looking for alternative sources.

TechCrunch has exclusively learned that NovoNutrients has raised $18 million in a Series A round from investors including Australian energy company Woodside Energy to support manufacturing. The final tally includes $3 million that Woodside pledged last year.

Tze said NovoNutrients spent the past year preparing for its pilot plant, including refining the bioreactor design. Once completed, the pilot will use the same equipment as a future commercial-scale plant, making it an important testing ground for its design and microbial strains.

Novonutrients, like other companies, uses fermentation to turn carbon dioxide into more complex molecules. But unlike many of its competitors, it’s not using a large tank that resembles the kind you’d see at a brewery. Instead, Novonutrients uses thin cylinders that are looped, which Tze said helps reduce the amount of energy needed to mix the gases.

To produce those proteins, the company engineers microbial strains to digest waste streams with different gas mixtures. For some products, the company may use synthetic biology techniques to improve the stability and efficiency of the microorganisms. But for natural products, Tze said, NovoNutrients uses and promotes evolution. “Our most relevant strain development is actually the fact that we are able to engineer the strains through natural, non-GMO means to the specific mixed gases that will be available at a particular partner site,” he said.

NovoNutrients plans to make most of its money not by building and running commercial-scale plants, but by selling the microorganisms, along with licenses to build, operate and maintain the facilities. “We will also do marketing and business development for the products,” Tze said.

Getting to that point will take some hard work, but Tze is confident the pilot plant will provide the data needed to convince investors that a commercial-scale fermenter is worth investing in. The goal is to follow a “capital-light” path to reach the market, he said.

In an unexpected twist, Tze said he has spent more time talking with pet food companies over the past year.

“To some extent, this is a response to the broader, lower confidence and interest in alternative proteins that people have,” he said. “On the other hand, it’s that the pet food sector has been quick to recognize the benefits of alternative proteins.” It doesn’t hurt that people spend big on their pets, with total spending rising 78% from 2013 to 2021, according to the U.S. Bureau of Labor Statistics.

Tze said, “There are certain segments of the market where there is a great willingness to pay for ingredients that are hypoallergenic, including but not limited to hypoallergenic.” Since NovoNutrients’ protein will be new to many pet diets, Tze said it shouldn’t be a problem for pets with food allergies.

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