Tailoring “designer fats”: Yali Bio raises $3.9M seed round to scale plant-based cultured lipids

REPUBLISHED_FROM_FOODINGREDIENTSFIRST_DECEMBER_1_2022

By Benjamin Ferrer / February 24, 2022

Yali Bio, a Californian food-tech company that uses precision fermentation to cultivate “designer fats” for plant-based meat alternatives, has raised a US$3.9 million seed round, bringing total funding to US$5 million. The financing will be used to drive R&D, operations and business development for the nascent food solution.

The US-based company combines synthetic biology, deep learning and genomics tools to produce fats that are deemed “more sustainable than the oils currently used in plant proteins but on par with their animal-based analogs in terms of flavor and texture.”

“The process is similar to brewing beer. The microbes chew up sugar and nutrients and grow fatty. We engineer the microbes with the genes necessary to produce the target fats, cultivate them in bioreactors, and harvest after a few days of growth. It is quite an efficient and controlled process,” Yali Bio’s co-founder and CEO, Yulin Lu, tells FoodIngredientsFirst.

“Application-wise, fats are everywhere in food products, such as meat, butter, ice cream and cheese. This is why there is a huge deforestation problem associated with palm and cocoa farming, because they're so widely used in foods in our daily life.”

Yali Bio is developing its proprietary technology to create plant-based fats that emulate animal fats. In terms of format, Lu notes the company isn’t planning to sell its fats directly to consumers, but is currently exploring partnership opportunities with food companies. “Our goal is to find a partner with strong R&D and product innovation capabilities to maximize our products effectiveness.”

The latest funding round was led by Essential Capital with participation from new and existing investors: Third Kind Venture Capital, S2G Ventures, CRCM Ventures, FTW Ventures and First-in Ventures.

“High quality fats are currently a major weak point when developing plant-based analogs for animal proteins,” comments Chuck Templeton, managing partner at S2G Ventures.

“We are excited to invest into Yali Bio to improve this crucial component of plant based products with the goal of enhancing the consumer experience while reducing the impacts of conventional animal husbandry.” 

Switching out traditional plant oils
In line with Innova Market Insights’ Top Trend for 2022, “Shared Planet,” consumers are looking for products that meet their evolving health and environmental standards.

But the burgeoning global appetite for more sustainable slaughter-free diets is squeezing cornerstone ingredients, like coconut oil, which is already one major cause of deforestation and habitat destruction in Southeast Asia. 

From a formulation standpoint, coconut oil has a low melting point that causes it to melt quickly and seep out of the product when heated. This means by the time the product is consumed a lot of the fat has dissipated, resulting in a drier product.

Yali Bio further highlights that coconut and other commonly used vegetable oils also do not deliver the same unique flavors as animal meats. This means that companies often will have to compensate with flavor additives that lead to complicated labels. 

Yali Bio highlights that coconut and other vegetable-based oils do not produce the same flavors as animal meats.Fermentation-based credentials
Yali Bio is developing its proprietary technology to create plant-based fats that emulate animal fats. These can be tailored to a variety of applications.

For example, different cuts of steak have varying fat compositions and offer distinct consumer experiences. Using precision fermentation, the company will be able to design fats that achieve the next level of properties and functional experiences for the consumer when it comes to plant based alternatives. 

When it comes to its carbon footprint, Yali Bio’s fats produce less than 0.5 kg of CO2 per serving compared to 15 kg for beef, 4 kg for pork and 2 kg for butter. 

“While other companies are focused on making better and more tailored fats, many of them are using cell cultivation techniques which means they have to go through an extensive regulatory approval process,” the company states.

“Since Yali Bio is using plant-based ingredients, the process is much more straightforward, giving us a faster go to market strategy.”

Zero Acre Farms is currently piloting a similar technique, netting US$37 million from investors including Robert Downey Jr.’s FootPrint Coalition Ventures. The company positions itself as a disruptor to traditionally farmed vegetable oils, pegged as using next-gen ingredients and made by “fermentation, not deforestation.”

Other novel products being scaled using precision fermentation include Fooditive’s new vegan casein, Those Vegan Cowboys’ vegan cheese and Eden Brew’s cowless milk.