Estonian biotech ÄIO raised €6,1М
Estonian biotech ÄIO has raised €6,1М from Estonian 2C Ventures, SmartCap, Finnish Voima Ventures, and Nordic Foodtech VC.
Launched in Tallinn in 2022 by entrepreneurs and researchers from the Estonian University TalTech Petri-Jaan Lahtvee and Nemailla Bontur, ÄIO uses locally available by-products and side streams from the food, agriculture, and timber industries. Using fermentation techniques, it cultivates microorganisms capable of producing fatty acids, antioxidants, and pigments. These oils and fats are plant-based alternatives to palm, coconut oils, and animal fats and can be used in the food, cosmetics, and chemical industries.
According to ÄIO, the production of plant-based oils and fats could potentially reduce land use by 74-97% and cut water consumption by up to ten times, compared to current palm oil and animal fat production. In addition, the fermentation technology requires ten times less time than palm oil and animal fats production.
In February 2023, the company raised €1M from the government organization Enterprise Estonia, Finnish venture company Nordic Foodtech VC and other investors. Later, in September 2023, it raised investment from Voima Ventures in the form of a convertible loan.
The Estonian startup used the funding to develop three new product categories of products, such as encapsulated oil, red oil, and butter fats, which can replace palm oil in the food industry. The red oil can be used in the cosmetic and chemical industries.
ÄIO will use the new investment to build a demonstration plant in Estonia to produce plant-based oils and fats from wood and agricultural waste.
Established in 2024 by Herty Tammo, Hendrik Reimand, Taavi Veskimägi, and Martin Koppel, 2C Ventures targets to provide startups with initial investments, which will range from €250K to €1M, as well as follow-on investments in later-stage rounds. At the beginning of 2024, 2C Ventures closed €32M for its fund, €20M of which was secured from the Estonian SmartCap Green Fund. The target size of the fund is €50M.
SmartCap was established in Tallinn in 2021 as a subsidiary of the Estonian Business and Innovation Agency. SmartCap manages two common closed-end alternative investment funds: SmartCap Venture Capital Fund and SmartCap Green Fund.
