Startup Noblegen snagged $19 million in Series B funding, to ramp up production of its fermented food ingredients, which require minimal water use and less energy to manufacture.
The company’s vision is to “transform the global ingredients market by producing raw materials that are both healthy for consumers and healthy for our planet,” said Noblegen CEO Adam Noble in a statement. Using a unique fermentation method, Noblegen produce food ingredients including proteins and oils from a single microorganism called Euglena gracilis.
The market of fermented ingredients, cheered for their nutritious value and reduced energy consumption, is forecast to reach $689 billion worldwide by 2023. They are benefiting from the rising popularity of sustainable ingredients, which is driven by consumers’ growing interest in food industry’s ethical sourcing and environmental impact. About 64% of U.S. and UK consumers expect companies to invest in sustainability, according to an Innova Market Insight survey.
Led by Canadian family office Richardson Ventures Inc., the new round of funding brings Peterborough, Ontario-based Noblegen’s total raised to $31.6 million. In addition to increasing production, Noblegen will use the new cash to bring its ingredients to market and double its 50-employee team by the end of 2019.
The food industry traditionally has focused on reducing waste and protecting raw materials to increase sustainability. For example, Fonterra, the world’s largest dairy exporter, plans to reduce its carbon footprint in New Zealand by 20 percent in 2020 with initiatives including transitioning to renewable fuel sources.
In recent years, food alternatives have started to take the central stage of food sustainability. Milk substitutes like almond and soy expanded to 15% of U.S. milk market in 2018, up from 4 percent in 2004, according to the Wall Street Journal.
Meat substitute is expected to follow the same trajectory, reaching $40 billion in U.S within a decade. With almost a $6 billion market value, Beyond Meat estimates that it cuts water use and greenhouse gas emissions more than 90% compared to ordinary beef.
Food giants are jumping into the fermented food ingredients industry seeking protein alternatives. Fonterra invested in Motif Ingredients’ $90 million series A funding in February. The Boston-based food startup specialize on recreating animal-free proteins and food ingredients.
Fermented ingredients provide higher nutritious value at reasonable price. With a small adjustment for the fermentation process, Noblegen claims that it can produce customized acids without genetic modifications and unnecessary chemicals.
“Our ingredients are incredibly versatile, so food and beverage manufacturers can develop products that are sustainably-produced but don’t sacrifice the taste and functionality of traditional ingredients,” Noble said.