In a significant leap forward for sustainable food technology, Finnish startup Solar Foods has secured a substantial €8 million ($8.8 million) in its latest Series B funding round. The investment, led by the Finnish-based investment group Springvest, with contributions from existing stakeholders such as Happiness Capital, Lifeline Ventures, VTT Ventures, and Fazer Group, signifies growing confidence in Solar Foods’ revolutionary approach to food production.
The company, which was established in 2017 as a spinoff from VTT Technical Research Centre of Finland and LUT University, has developed a unique ingredient called Solein—a yellow, protein-rich substance created by feeding microbes elements harvested directly from the air. This funding round, as reported in a November 16 filing by Agronomics, a company that invests in the cellular agriculture space, will fuel the expansion of Solar Foods’ production capabilities. Notably, Agronomics itself has invested a cumulative €6 million in Solar Foods, indicating a strong belief in the startup’s potential.
The capital injection is set to accelerate the construction of Solar Foods’ demonstration facility, ‘Factory 01′, located near Helsinki. Slated to commence operations in the first half of 2024, the facility is expected to produce 120 tons of Solein per year. The company’s success in securing funds and the growing waiting list for its products underscore the market’s anticipation for a new era of food technology.
Solar Foods operates on the cutting-edge principle of gas fermentation, a method that fundamentally reimagines food production by eliminating reliance on agricultural land. By utilizing carbon dioxide and hydrogen—instead of traditional sugars—to nourish its bacteria, the company can potentially offer a more environmentally friendly alternative to animal-based proteins. Assuming that the energy-intensive aspects of the process are powered by renewable energy sources, Solar Foods’ technology promises lower emissions, reduced water and land use, and the possibility of situating production plants closer to consumers.
The startup has already made headway in regulatory approvals, having secured novel foods approval for Solein in Singapore last year. It is also working toward self-GRAS (Generally Recognized as Safe) status in the United States by the following summer and has submitted a safety dossier to the European Food Safety Authority (EFSA) for EU approval as a novel food.
Solar Foods’ co-founder and CEO, Pasi Vainikka, has likened the various stages of the factory to familiar industrial processes: the front end resembles an oil refinery, the middle mimics a brewery, and the downstream part is akin to dairy production. He further explains that electricity constitutes about half of the production costs, mainly due to the electrolysis process. Thus, the viability of their process is closely tied to the efficiency of the electricity market in the operating country.
The company’s innovative approach to creating nutrients from thin air is not just a concept but a working reality. At their headquarters, a portion of the carbon dioxide used in production is sourced from a direct air capture device, which recycles the exhaled CO2 of the employees. This is a testament to Solar Foods’ commitment to creating a sustainable food system.
Looking ahead, Solar Foods is well-positioned to play a pivotal role in the food industry’s evolution. With approximately €35 million ($37.3 million) raised in equity and about €30 million ($32 million) in debt financing and sale and lease back agreements for the demo factory, the company is on a robust financial footing. The IPCEI grant as a ‘clean hydrogen’ company further bolsters its position, promising a brighter future for large-scale production.
As Solar Foods prepares to scale up its operations, the broader implications for the global food system are profound. The company’s success in this funding round is not just a win for Solar Foods but a beacon of hope for a world seeking sustainable, innovative solutions to feed its growing population without further straining the planet’s resources.