Introducing IO's Special Yeast Technology

Nemailla Bonturi 0:03

So we have this very special yeast that , instead of making alcohol or making bread , it makes fats and oils , so just like very similar to palm oil or animal fats and like the cool , sustainable part of it . Besides , the fermentation part is that we are using side streams from industries that we feed the yeast and it's produced fats and oils . So we're trying to make it like a circular economy process .

Ryan Grant Little 0:34

Welcome to another Climate Tech Podcast interviews with the people trying to save us from ourselves . Nemailla Bonturi is the co-founder of Ayo , an Estonian startup making fats and oils from fermentation . She's a scientist turned entrepreneur , whose advanced research into yeast is going to result in a healthier environment and diet for all of us . We talked about the company Estonia and the X-Files . I reached Nemailla in Tallinn . I'm Ryan Grant . Little Thanks for being here , Nemailla .

Nemailla Bonturi 1:07

welcome to the podcast Hi Ryan , Happy to be here .

Ryan Grant Little 1:12

You are the co-founder of IO , a startup working to replace the unsustainable fats and oils out there with high quality substitutes . Where did you get the idea for this company ?

Nemailla Bonturi 1:23

Well , it started a long time ago when I was doing my PhD and I started working with this very fantastic microbe . Of course , back in the day , I didn't think about the company , because us scientists are not trained to monetize our findings . So it was when I moved to Estonia and I started getting in contact with this amazing environment of startups , of trying to push things and not being afraid of starting and failing companies , that then we decided to expand out from the university and then started IO three years ago .

Ryan Grant Little 1:59

And I want to come back to Estonia as well , because Estonia as a country gets huge representation on this podcast , and maybe you can help unlock why that is . You're using fermentation to create these products , so the same process that makes beer and yogurt and stuff like that . Can you talk about the process itself , how you're making this stuff , what you're using as feedstocks or like the inputs ?

Nemailla Bonturi 2:21

Yeah , so we have this very special yeast that , instead of making alcohol or making bread , it makes fats and oils , so just like very similar to palm oil or animal fats and like the cool , sustainable part of it . Besides , the fermentation part is that we are using side streams from industries that we feed the yeast and it's produced fats and oil . So we're trying to make it like a circular economy process .

Ryan Grant Little 2:51

So when you say a very special yeast , this means that you have , through your research , identified a particular yeast that does this , or I mean , maybe talk to us a bit about the world of yeasts . There are different ones out there . It's not all yeasts are the same . There are different strains of it , and so how did you isolate and identify this one that works particularly well for fats and oils ?

Nemailla Bonturi 3:13

Yeah , there's like a very vast diversity of yeast doing pretty amazing things out there . So this one I didn't isolate myself , but I took it from a bank of microbes and then I saw its industrial potential and then , as all these environments

From Research to Startup Journey

Nemailla Bonturi 3:34

where you have this scale up or you're using side streams , let's say it requires a very tolerant microbe . So , like my work as a scientist is starting by making this microbe even more tolerant so it can keep very high yields and production , even in a thousand cubic meters or 100 cubic meters , and also by being able to keep this ability of turning side streams , because they're not like just pure sugar or just pure molasses . It really requires the yeast to be very resistant .

Ryan Grant Little 4:12

And is the company a direct outcome or output of the scientific work you were doing , of your studies ?

Nemailla Bonturi 4:19

Yes , most of it . I would say yes , of course , after we got into contact with investors and we start being like , let's say , a more professional company and not just two lost scientists trying to make business . Of course , some ideas have pivoted and got stronger , but I would say 99% is still about our research . 99% is still about our research .

Ryan Grant Little 4:43

Let's stick with the inputs , the feedstocks . You mentioned that this is like agricultural side streams . What are they specifically and how do you capture them ? Or I mean , are you buying them ? Are you getting paid to take them ?

Nemailla Bonturi 4:54

So it depends on the type of substrate and we are trying to be as agnostic as possible , because our business model will be one of them will be licensing , because our business model will be one of them will be licensing . So we need to . Our technology needs to be versatile to reach any company that is interested in valorizing their side streams . Currently , we have worked with wood sugars . So in Estonia there is a huge partner company called Fibano , where they have this amazing technology to extract sugars from sawdust , so we are using the sugars from this leftover sawdust . We can work with leftovers from beverage industry , like tea leaves , brewer , spent grain . We have worked with the side streams from bakery industries , so leftover bread , for example , which is a huge amount that they have . We can work with molasses as well , very well , also from dairy industry , so whey or lactose permate . So it's a very wide range , and we have been also now tackling some side streams from corn and from confectionery industry .

Ryan Grant Little 6:10

Okay , so it sounds like it's mainly from the food industry , except perhaps for wood . How do you kind of like make sure that the inputs are consistent , are clean , Like how do you manage that process ?

Nemailla Bonturi 6:24

Yes . So as most of them , as you said , comes from food industry , then it's easier to have ,

Versatile Feedstocks and Circular Economy

Nemailla Bonturi 6:31

let's say , this food grade product . So of course , when we receive the side stream , we process it to remove any other type of microbes . So we are sure that only our microbe is present and basically that's mostly what we process . And then we have this very nice team of scientists and we managed to build in-house these high throughput platforms since changing the yeast to trying new side streams , and we can do it using very little amount of substrate . So 10 milliliters is already enough for us to start doing all our assessment of their viability .

Ryan Grant Little 7:19

The value chain then starts with these food companies and agri-food . Then you have customers that you're potentially selling this to as end consumers and you also have licensees potentially right , as you said , you want to license the technology to have on site somewhere . If someone were to say who's your customer , how would you answer that ? And is it multiple types of customers ?

Nemailla Bonturi 7:41

Yes , we're mainly B2B . We're focusing on either providing our fats and oils as an ingredient , but we understand that having one huge factory somewhere and then transporting the ingredient to the world is not sustainable . So that's why we have this licensing model , where it's best in terms of CO2 mitigation to have our technology closer to the substrate .

Ryan Grant Little 8:11

So in a perfect world , a couple of years from now , maybe you have this like industrial scale bakery that's producing their own plant-based butter at the same time through fermentation .

Nemailla Bonturi 8:21

Exactly or also using in the bread formulation . So it's possible to substitute rapeseed oil , for example , or palm oil in bread production by using our ingredients .

Ryan Grant Little 8:35

And how are the ingredients performing now ? So you probably have like more of the bench scale right now , but how would this compare to like a plant oil or a seed oil or a lard or something like that ?

Nemailla Bonturi 8:49

So we have an in-house chef and also scientists in the product development and they have been doing very amazing recipes . So the product performed very well in the bakery . So they have done several different types of breads , cookies , chocolate we had a pretty amazing results with chocolate in in a way of alternative , not only to the butter part but also to the cacao part , because one of our products has roasted flavor and this was very interesting for us . So also in the alternative meat space , we have been developing alternative dairy as well . So it's very versatile and we have been having very , very good results on that . And also in cosmetics . We also have a cosmetic specialist and she has been working also in developing moisturizers , lip balms and creams or moisturizer for hair . So very

Product Applications and Performance

Nemailla Bonturi 10:00

versatile , I would say . So very versatile , I would say .

Ryan Grant Little 10:02

I think there's a huge benefit for when a company can justify for business reasons having an in-house chef .

Nemailla Bonturi 10:15

There's probably lots of fringe benefits to that as well , especially if one of your products that you're testing is chocolate . Yes , and it's pretty cool that he has a very diverse background . So he's a Japanese descendant , born in Canada , came to Estonia and is cooking this Nordic cuisine . So he's done it all and he has a very scientific mind . So he doesn't know , but he always writes down recipes , results , so we always tell him that he's a scientist in his heart .

Ryan Grant Little 10:46

The old Japan , Canada , Estonia route in order to cook Nordic food Classic . What's wrong with the fats and oils that we use right now ? So if I think of like palm oil lard For our listeners , who love some palm oil and love lard , what should they know about the environmental impacts of these products or health as well ?

Nemailla Bonturi 11:07

Yeah Well , so let's start with animal farming . So I guess everyone is aware that they are huge contributors to CO2 deforestation . Well , I'm from Brazil and I know that big chunks of Amazonia is being cut down for animal farming illegally , and this has been happening in several different countries . Also , palm oil the need for large areas for cultivation . It's also taking down large chunks of rainforests or other natural , let's say , forests in each country . So , animal farming , lots of CO2 , lots of area , lots of water , and while we're using plantations , it's also taking a toll in the diversity and deforestation .

Ryan Grant Little 11:58

And so that's from the environmental standpoint . Can you talk a little bit about kind of the nutritional standpoint standpoint ? Can you talk a little bit about kind of the nutritional standpoint ? Are your products total exact kind of analogs to this from a nutritional profile , or are they better ?

Nemailla Bonturi 12:10

Yeah , so so far , in order to like to claim that our products are healthier , we're still conducting in-house and outsourcing , like all these tests that we need . But we have , according to their chemical compositions and how much we are adding in the food formulations , we have a good idea that they have nutritional benefits . So , for example , they increase the amount of fibers , proteins and decreasing the caloric level because they can perform as a fat , but with more increased benefits because it's the whole yeast , for example , and we know that we do not have any trans fats in our profile . And , of course , in the pipeline of our new products , we are also developing oils that are richer in omega-3 antioxidants . So by the chemistry , we can expect that they will have more nutritional effect , but I cannot claim before we can perform this .

Ryan Grant Little 13:20

No footnotes required for this podcast . Yes , as you mentioned , you're originally from Brazil and you're a scientist in Brazil , moved to I mean , I'll say Scandinavia broadly , because you weren't just in Estonia , continued your academic career there

Environmental and Health Benefits

Ryan Grant Little 13:35

and then founded IO . Can you talk a little bit just about what that journey was , both geographically but also the switch from academic to founder ?

Nemailla Bonturi 13:45

yes , well , the first time I saw is knowing my life . I was 30 years old . I left the airport and it was super snowy outside and I was like a kid touching there's no , secretly tasting . There's no , not from the ground .

Ryan Grant Little 14:01

And you're wondering why it's so dark at 2.30 PM .

Nemailla Bonturi 14:05

Yes , yes , so , culturally and geographically , I guess it was a 60 degrees difference . So Brazil was 40 minus 20 where I landed first . But yes , I was a scientist in Brazil . I finished my PhD in 2016 . And it was exactly when I was not very happy with the political situation that I started there . Well , when certain type of people get into power , we know that they will deny science . They will make your country go 50 years or a hundred back .

Ryan Grant Little 14:41

Yeah , in the back .

Nemailla Bonturi 14:42

So yeah , especially for science . So I decided to move to Europe and then I started searching for positions around Europe and then , well , I found this position in Estonia . That pretty much was what I liked to do , and I was good at doing so . By a process synthetic biology I applied , and then one month later I entered the plane and then I got there , Just had a few times for some Googling to see how Estonia was after the Soviet Union Seemed okay . And then now it's been eight years that I'm there and it's a pretty cool place , and before Estonia I would never think about becoming a founder . I think it's the bug they have here .

Ryan Grant Little 15:31

More unicorns per capita , I think , than any other place in the world . The entire population of Estonia is about the same as the city of Milan and I mean , even if I just look at this podcast , I've had , you know , a number of people from Estonia on here . Why do you think that ? So , when you say you know you never would have considered becoming a founder if it weren't for Estonia , why do you think that is ?

Nemailla Bonturi 15:54

So , as I said , like during my whole time just being as a scientist , no one showed me that , besides doing really great science , you can also think and not be afraid to start something , some startup . And in Estonia , besides this amazing environment where you can easily just grab a coffee with any other founder or an investor , so people are very open and reachable and the whole government and the universities here . They have this structure that fosters this . So they bring for example , we were in the university they brought investors . Investors talked oh you have a really nice idea , why don't you start a company ? And then you talk with other founders and then they were like , yes , just open it . If you fail , you fail . You fail .

Ryan Grant Little 16:43

It's investors money , not yours as an investor , I find that terrifying . But yeah , I can see why .

Nemailla Bonturi 16:51

I can see why that's good for founders but , like it gives you the courage because as a scientist , you're so afraid of failing . But uh , you just learn not to be afraid . It's's some people they have , I don't know , they're in their fifth startup .

Ryan Grant Little 17:56

Yeah , I mean , I would imagine that , also , as a scientist , you , like , you need these levels of exactness and perfection or , like you know , these assurances , whereas in the startup world , as you've surely discovered , it's kind of like , I mean , you're , you're just , you know , walking in the dark . Every you can see

The Estonia Effect on Innovation

Ryan Grant Little 18:16

maybe a meter in front of you , and that's it .

Nemailla Bonturi 18:17

Yeah , definitely , and I think you learn to be bolder , I would say , in this startup community and also the government has several grants , they have several accelerators or they really give support and they really want the startups to be successful here .

Ryan Grant Little 18:34

You've talked a lot about on the topic of women in STEM . So science , technology , engineering and math , if I remember the acronym correctly and some of the challenges that you faced there , and I came across the term this term , which I now totally love and will use in the future the Scully effect . Can you talk a bit about what that is and to what extent you're a product of it ?

Nemailla Bonturi 18:59

Yes , so I'm a very lucky person that when I was like 10 years old or like nine eight person , that when I was like 10 years old or like nine , eight , so I was , I was always like cinema geek addicted girl .

Nemailla Bonturi 19:12

And then I always felt , even though I was a kid , I always felt there was a lack of strong female characters , so there were not like not many heroes or like they were mostly romantic partners in the movie . And then I think it was 93 or 94 , we had the DX Files , this TV show where Scully is this FBI agent who has a PhD or two , I don't remember . I think she has , I think , two PhDs and she's this scientist that also kicks ass and she's a very strong character and is portrayed by Gillian Anderson and this type of representation . Years later , a decade later , there was some study and that after this character , the amount of females going to STEM increased a lot and they saw that this character , Scully , was one that pushed them or encouraged them or made them see the amazing part of STEM and they went . That's why this is the Scully effect and I'm a very proud part of it . Gillian Anderson , if you ever listen to this podcast , please hug me .

Ryan Grant Little 20:27

Oh yeah , she's a regular listener . Yeah , I never missed an episode of it as a kid . I totally love the X-Files and if there are any Gen Z listeners , stop watching Friends and start watching the X-Files Much , much better television . Yes , you've also been very vocal about the need for startup founders to take care of themselves and protect their mental health . Why do you feel the need to speak up about that topic ?

Nemailla Bonturi 20:53

I think most people , and including me in the beginning we think that mental health , like you , have to be strong , like all the time , and like taking care of mental health or saying that you are not feeling okay , I'm feeling overwhelmed , this is a sign of weakness , and it's not . It's like you cannot perform well if your mindset is not there as well , if your mental health is not okay . And this is not only to founders , I mean to everyone . Like , if you're tired , like you cannot push it , just take a break . Just if you feel anxious , talk to a therapist . Because it's very common you have so much to do like so much to achieve , so much pressure everywhere to succeed .

Nemailla Bonturi 21:43

And I think in the beginning , for me , the transition to scientist , to like to entrepreneurship it was not my skin , so this process of transitioning to this skin was super , brought me a lot of anxiety . Until my best friend she told me look , you're not normal , go talk to a therapist . You should . You're overworked , you're overly tired , you're not like laughing anymore . And then it's been two years , I'm in therapy and I also have been learning to put boundaries . So I try every day . I work from eight in the morning to six , then I stop , I close my computer . It doesn't matter . Of course

Mental Health for Founders

Nemailla Bonturi 22:26

there are some days that you actually need , but I try to make it a really rare exception , or weekends . I do not work anymore unless it's like a matter of life or death , but I think it's good to put boundaries .

Ryan Grant Little 22:41

I think that's really good advice for founders who are listening as well . And culturally , we do ourselves no favors because , whether it's social media or LinkedIn or , I don't know , fast Company and Wired , you kind of see these like you know , everyone is making it look so easy and it's kind of like oh , I had this idea , I started it and now I'm a billionaire and you know that's , of course , not the usual way of things . So being able to talk frankly and honestly , founder to founder out there , I think is really important , and I always tell you know I'm a founder by background and I always tell founders to like make sure you have a community of other founders that you can talk to and that you can be open to , because it's not , you know , your friends might not understand , your partner or family might not understand your like . Vc investors are probably not the people to talk to about this . It's other founders who have been through it , who are going through it , who are the best kind of sounding boards and friends to talk with this stuff about .

Ryan Grant Little 23:35

You have recently closed a round at IO , a funding round . Congratulations on that . What does the year ahead look like ? Are you building up ? Are you hiring ? What are you going to spend the money on ?

Nemailla Bonturi 23:46

I always tell investors this joke that I'm going to run away to Brazil with their money . Now they're not very happy . Too late now , yeah , and Netflix is going to make a documentary about me no , but I seriously speaking now . So I think now it's time . We have been growing exponentially , but now I think it's this inflection point where we really need to be like this hog stick and outperform the first three years .

Nemailla Bonturi 24:21

So with this round , we have a two year runaway and very bold plans . So one of them is to be in the market , at least for cosmetics , so regulatory barriers are more feasible . But we also , by the end of 2026 , we want to have all the permits for this novel food in different countries and to start having so we can start actually licensing our technology . So basically , this is our goals and , of course , like we'll fundraise in two years . So , investors , please let's start flirting , and we're always interested in bright people and also , like , excited about this topic . So if also you are interested in working at IO , please also reach us and even if we don't have a position right now , we will call back .

Ryan Grant Little 25:20

That's great . So investors with long attention spans , bright people who are interested in the space , and probably potential customers as well , should reach out to you . Yes , great , I'll , as always , put your contact information in the show notes . Nemailla , it's super cool what you're doing . Thanks a lot for talking today .

Nemailla Bonturi 25:36

Yeah , thanks a lot , it was a pleasure .

Ryan Grant Little 25:40

Thanks for listening to another Climate Tech Podcast . It would mean a lot if you would subscribe , rate and share this podcast . Get in touch anytime with tips and guest recommendations at hello at climatetechpodcom . Find me , ryan Grant Little , on LinkedIn . I'll be back with another episode next week . Bye for now .