There are a variety of new food sources making their way into the supermarket mainstream, including Exo’s cricket-based protein bars, Perfect Day’s yeast-derived, animal-free milk, and Impossible Foods’ burgers derived from coconut oil, potatoes, and a special ingredient it calls “heme.”
Another substance is also proving its potential to become a powerhouse of nutrition and alternative protein source: microalgae.
Algama, a French startup manufacturing a Spirulina-based antioxidant drink, just raised a $3.76 million venture round led by Hong Kong billionaire Li-Ka Shing’s venture arm Horizons Ventures. The funding represents Horizons Ventures fifth investment in an alternative ingredients company; it’s also invested in Impossible Foods, Modern Meadows, Hampton Creek, and Perfect Day.
According to the company’s website, microalgae has a unique nutritional value that can benefit a variety of industries, including nutrition, health, cosmetics, and chemicals. It selected spirulina and chlorella, believing that these two types of microalgae have exceptional nutritional profiles.
Although the company’s first product is the spirulina-based beverage, called Springwave, it describes its core activity as “the creation of ingredients and innovative products derived from the properties of microalgae.” Its R&D team, which collaborates regularly with a team of culinary consultants, focuses a good amount of its time on identifying and selecting microalgae that has unique attributes for consumer product development.
There are three types of microalgae that have been approved for human consumption. Considering that there are an estimated 300k to over 1 million species of algae, this seems like a drop in the bucket. This includes seaweed, sea vegetables, and harder to spot types of algae, like the kind that forms a thin layer of slippery sludge over rocks. Although many strands are green, algae’s hue spans the color spectrum with red algae, brown algae, and yellow algae being common.
In addition to a successful funding track record, Algama has snagged many other accolades. In 2015, it moved into the new food lab in France’s first biocluster research institute, Genopole. The following year, the company won awards at both the NYC-Paris Business Exchange and Smart Food Paris.
Algama isn’t the only one who is betting on algae. There are some who see a major play for the slimy green substance in the clean energy realm.
“What has been underappreciated about algae is how growing it for energy or other uses could be a way to transform the sustainability of agriculture in general,” Matt Carr, executive director of the Algae Biomass Organization, told AgFunderNews. “If you think about the biofuels story today, it’s food versus fuel. How will we deal with growing energy and food demands of our growing population with less land?”
According to Carr, algaculture—a form of aquaculture that involves farming a species of algae—turns that conversation on its head.
Opening up new areas of degraded and underutilized land where algae can thrive, could lead to a new crop of viable agriculture land.
“It doesn’t need good soil, it doesn’t need fresh water. It prefers wastewater or saline brackish water. It likes to chew on CO2. These are all big global sustainability and resources challenges that algae is positioned to convert to opportunities,” he says.
And the USDA agrees. In 2011, the USDA provided Sapphire Energy with a $54.5 million loan guarantee to build a refined algal oil commercial facility in Columbus, New Mexico. Sapphire later received additional equity from private investors. It’s also supported a number of trials for fish, poultry, and livestock feed using algae as the main ingredient. Scientists in Hawaii, for example, are working on a way to produce biofuel using discarded papayas and algae.
The Department of Energy has also taken the lead on algae research, primarily through its Algae Program designed to increase the yields and lower the costs of algal biofuels.
There are companies focusing on the production side of algae. Smart Microfarms is developing scalable microalgae systems for urban, rooftop, and community gardens to cultivate algae for a variety of applications, including consumption.
In the animal health sector, some researchers are looking at whether feeding cattle seaweed can help reduce their methane emissions. Another group of researchers has concluded that replacing just 10 percent of livestock feed with algae could have a dramatic impact on reducing global warming.
Algama has some competition when it comes to deriving food products and specialty ingredients from algae. TerraVia, a food, nutrition, and specialty ingredients company, dubs algae “earth’s original superfood.” Its AlgaVia line of food ingredients products includes proteins and lipid powders. It also offers algae oils under the brand name AlgaWise as well as a consumer-focused culinary algae oil called Thrive. These are just two examples of the algae-based products that it offers.
Despite all the buzz about algae, the venture capital community has remained reluctant when it comes to capital according to Carr.
“It’s a new technology and we really just don’t see a lot of investment coming into new technologies that have high capital investment requirements,” he says. “We’ve looked to the federal government to step in and bridge that valley of death and they’ve done a good job in cellulosic biofuels. We’re hoping that they can help usher in new technology throughout the valley. I think this is going to take off really quickly.”
Investors might want to see more research about algae before putting their dollars behind it, and they may have a point. Meal replacement drink Solyent recently revealed it thinks that the algae ingredient it’s using in its product was responsible for consumers feeling sick and experiencing stomach issues. It’s unclear which type of algae was in use, but maybe more time is needed before algae becomes a common feature on consumer’s plates.
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