Few people have left a legacy more permanent than a first-century Jewish preacher, known by many for his kindness and wisdom. Jesus was also known for sorting out members of His flock who weren’t that good at event planning. Running short on cabernet? Didn’t plan for so many freeloaders to show up under the guise of wanting to be saved? Someone having an allergic reaction to gluten? Jesus would sort you out with a miracle, because that’s the sort of stand up guy he was/is.
God’s Son has been a tough act for technology to follow, but we’re making some progress. As life expectancies increase across the globe, mankind is doing a good job of curing the sick, aside from what’s happening with “The Rona.” Thanks to the wonders of technology, mankind is also creating food out of thin air. Today we’re going to talk about some companies that are creating single-cell proteins out of thin air.
Seven thousand years before Jesus walked the planet, the Chinese were growing soybeans. Today, about 85% of the world’s soybean crop is processed into meal and vegetable oil, and nearly all of that meal is used in animal feed. Developing an alternative to soybeans could help feed the animals which some think will soon be obsolete, thanks to plant-based proteins. That’s the idea behind Solar Foods, a company brought to our attention by one of our subscribers who noted that Agronomics made an investment in their technology that creates food out of thin air.
Founded in 2017, Finnish startup Solar Foods has taken in nearly $25 million in funding to develop a technology that creates food out of thin air. We first came across the company last year in a piece titled Single Cell Protein is the Ultimate Alternative Protein. If you’ve had a barista dump a spoonful of overpriced spirulina into your protein shake, you’ve consumed single-cell proteins. Instead of growing plants or raising livestock, we can simply use the most powerful technology known to man – nature – as a machine to create single-cell proteins. In the case of Solar Foods, they’re creating a single-cell protein using nothing but water, CO2, and electricity. In order to understand the value proposition, we need to look at the bigger picture.
It’s unfortunate that cleaning up the planet has become a politically charged topic. Nowadays, it’s woke to wave a sign in someone’s face and scream at them to change their evil ways instead of learning some STEM skills in university and helping to solve the problem using technology. Long story short, what the activists are trying to tell you is that there are these bad things called greenhouse gases which we want to clean up, regardless of the extent to which they contribute to our ever-changing climate patterns. Here’s where greenhouse gases come from:
As you can see, reducing carbon dioxide is the major problem we’re trying to solve for here. If we can create food using carbon dioxide, we can reduce the amount in the atmosphere while decreasing the amount emitted by agriculture. Astute readers might note that using electricity to create protein out of thin air actually contributes to more carbon dioxide being generated, which is why the whole “generate protein from carbon dioxide” thing only works if you use green energy. Never mind all the carbon dioxide being generated by building solar panels, the important thing here is that we all feel better about ourselves because we’re helping to save the planet.
As people who are relying on our investment income to provide for us in our golden years, we’re more interested in how the whole thing makes money. And environmentalists should be too. In order for ideas such as this one to scale, they need to be economically viable. Solar Foods has already developed over 20 different kinds of food products that utilize Solein.
Credit: Solar Foods Investor Deck
By 2025, Solar Foods expects to be generating revenues of $300 million a year selling 400 million meals. At less than a dollar a meal, it probably won’t taste as good as loaves and fishes, but at least there will be less carbon dioxide in the atmosphere.
While Solar Foods seems to have received the most press, they’re not the only company producing protein out of thin air.
Kiverdi and Air Protein
Removing carbon dioxide from the atmosphere for the sake of it doesn’t create wealth. It’s something we talked about last year in a piece titled How Can We Reduce Carbon Dioxide in the Atmosphere? You can’t collect carbon dioxide for $100 a ton and then sell it for $20 a ton. As we said in our last piece, “the gap between the $100-per-ton cost to produce a product and the $26 a ton – maximum – that you can sell the product for means you don’t have an economically viable business.” The key is to create products from carbon dioxide that you can sell for more than it cost you to produce them. One company working on that problem is Kiverdi.
Founded in 2008, Kiverdi has taken in an undisclosed amount of funding which came in the form of a venture round in 2014. That money is being used to create products from carbon dioxide, one of those being air-based proteins. After many pivots, the company claims to have settled on some products that they think are economically viable. One of these is Air Protein, the world’s first air-based meat. They’re working on a number of projects including one which involves capturing carbon dioxide from a Canadian natural gas power plant and turning it into fish food.
Kiverdi’s website says a lot about the promise of the technology but little about the underlying economics. Everyone knows it’s a good idea to reduce carbon dioxide while simultaneously solving the world’s hunger problem. We’re more interested in whether or not any of these companies can actually run a profitable business while doing so. Since there’s no shortage of investors willing to throw money at green tech themes, it’s easy to keep afloat for decades without having to show traction. There’s also plenty of non-dilutive financing (like grants) available as well, which is what our next startup is using to keep the lights on.
Founded in 2018, U.K. startup Deep Branch Biotechnology has developed a low-carbon animal feed with a nutritional profile that is comparable with fishmeal. It’s called Proton™, a single-cell protein optimized for animal feed via a proprietary gas fermentation process which uses hydrogen for an energy source. In October of 2020, Deep Branch took in just over $3 million in funding (2.5 million euros) from the European Innovation Council (EIC). This latest funding will enable the company to scale up production to enable animal feed manufacturers to expedite performance testing of the new protein. The pilots are encapsulated in a shipping container making it easy for the continuous process to be run just about anywhere.
Also of interest is a project that Deep Branch is heading up with $4 million (3 million British pounds) in funding from Innovate U.K. which involves the sustainable generation of protein by capturing the carbon dioxide from bio-energy generation. Partners include British grocer Sainsbury’s, the UK’s largest single-site renewable electricity generator, Drax, and one of the world’s largest aquafeed producers.
There are now over 1,200 alternative protein companies globally, and at least half-a-dozen air-based protein companies. Our last article on the topic talked about a few more – NovoNutrients and Oakbio – and there are others we haven’t written about. There’s enough collateral out there about the promise of producing proteins out of thin air, but now it’s time to see some traction. In the event that any company out there starts producing single-cell proteins from carbon dioxide at a capacity that’s measured in tons-per-year, we’ll revisit this topic. In the meantime, if your sacred air-protein cow has a great story that hasn’t received the attention it deserves, you may want to check out our content marketing service.
The biggest appeal about the air-based carbon thesis is that you’re killing two birds with one stone – capturing carbon waste while generating food products. As with all these great ideas that the ESG types drool all over, this technology will only scale if it can produce a product at a competitive price point. The world’s food crisis won’t be averted by selling over-priced packages of air-based protein at farmer’s markets.
We’re convinced enough about the potential of food tech that we’ve invested in the company that’s the market leader right now. Find which stock that is in The Nanalyze Disruptive Tech Portfolio Report, now available to Nanalyze Premium annual subscribers.
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