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Exclusive: C16 Biosciences raises $4.5M to expand into food

Jan 24, 2024
Illustration of a hundred dollar bill with Benjamin Franklin wearing a chef's hat.

Illustration: Aïda Amer/Axios

C16 Biosciences, a palm oil alternative maker, received $4.5 million in grant funding and investment to fuel its expansion into the food category, CEO Shara Ticku tells Axios exclusively.

Why it matters: Palm oil is found in nearly 50% of packaged products found in supermarkets, per the WWF.

  • Palm oil is ubiquitous across retail, but its supply chain risks and environmental impact have concerned both companies and consumers.

Details: The company received a $3.5 million grant from the Bill & Melinda Gates Foundation and $1 million in SAFE (simple agreement for equity) funding from climate-focused accelerator Elemental Excelerator.

  • The grant will help C16 develop a proof-of-concept for creating products derived from sugar feed and produced by converting carbon dioxide. (A third-party manufacturer does the latter process.)

What's next: C16, which raised a $20 million Series A in 2020, could start fundraising again within the next year, targeting around the same size as its Series A or bigger, Ticku says.

How it works: C16 uses a process called precision fermentation, which uses yeast, not plants, to develop its oils.

  • The company can also tweak the molecules to make better performance ingredients, Ticku says.
  • In food, that could mean emulating the same mouth-feel as a piece of chocolate derived from plant-based oil or better flakes on a pastry.

What they're saying: "To play a role in reimagining consumer products from food products, from consumer massive. So the potential for C16 to innovate this market is massive," says Elemental COO Avra van der Zee.

Catch up fast: C16 started developing oils for the beauty industry first, launching Torula oil, a bio-based oil used in a range of beauty products.

  • Beauty has "a thirst for innovation and super high margins, and it moves really quickly," she says.
  • C16 used beauty as the first market to scale up manufacturing and drive down costs. "Once we've got sort of the flywheel of manufacturing and commercialization, [we could] expand into new markets, and for us, that's food," Ticku says.
  • "Food has been a core part of our ambition from Day 1," she says.

The big picture: Within the food space, C16 could expand into baking, dairy products and spreads, in addition to proteins.

  • Infant formula and nutraceuticals is another area it could set its sights on.
  • The company will also dig deeper into the personal care and home care market, because palm oil can be found in laundry detergent, shampoos and surface cleaners.

The bottom line: "Our aim is to support consumer products companies in making better products without compromise," Ticku says.

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