Cooking oil startup Zero Acre Farms to raise Series B next year
Zero Acre Farms, which aims to replace seed-based cooking oils with an alternative fermented from sugar cane, is eyeing a Series B in the second half of 2024, CEO Jeff Nobbs tells Axios exclusively.
Why it matters: Seed-based cooking oils have a high carbon footprint — both palm oil and soybean oil production are leading contributors to deforestation.
Driving the news: Zero Acre Farms has partnered with Texas-based burger chain Hopdaddy Burger Bar, which has pledged to go seed-oil free.
- Beginning in September, the company's product was being tested in two Shake Shack locations as part of that chain's efforts to become more sustainable.
Details: Nobbs declined to disclose the amount being raised. The company has raised nearly $42 million to date, he says. The company had a $127 million post-money valuation in 2022, per Pitchbook.
- Proceeds would fund a "2.0" version of Zero Acre's oil, he notes.
How it works: The cooking oil is made by fermenting sugar from sugar cane, considered one of the more efficiently grown crops, Nobbs says.
- It has a better fat profile, is liquid at room temperature, lasts longer when used in deep frying, and has a better taste than many of the widely used seed-based oils, according to Nobbs.
- Currently, the company conducts all its research and small-scale fermentation in the Bay Area.
- It has a partner that processes the oil, which is shipped to the Midwest where it is bottled.
The big picture: Zero Acre Farms has a multi-year plan, with the goal of servicing large fast-food chains like McDonald's, Nobbs says.
- Fast-casual chain Chipotle made an investment in Zero Acre Farms back in March.
Zoom in: Although most oil is consumed in restaurants, Zero Acre Farms does sell 16-ounce bottles of its product online and wants to sell it in supermarkets, he says.