Yali Bio wants to fatten up plant-based foods

The challenge for food tech companies is trying to convince people to change their eating habits to try alternative meat products.

One company thinks it has cracked the code by focusing on designer fats for plant-based meat and dairy products. It is building a platform to make tailor-made fats.

The process involves synthetic biology, deep learning and genomics tools that produce fats that are more sustainable than the current oils, like coconut, that are used in plant proteins, but also mimic animal-based analogs in terms of flavor and texture, according to CEO Yulin Lu.

The California-based company was founded by Lu and the Chief Scientist. Lu has a background in foodtech, working for Impossible Foods and Eat Just scaling up technology platforms to produce commercial products. In synthetic biology, Peng works in making lipids.

It is clear to me that the product quality and consumer experience has reached a point of no return. There are so many premium meats people like, but the fat is missing to elevate the quality.

He said that coconut oil is used for the replacement of fat in plant-based meats. It isn't the same as meat, so food manufacturers have to add flavor enhancers to make it taste better. The market for functional fats is limited by quality of product and consumer experience, which is why Yali Bio wants to create a broader selection of functional fats.

The company is working on how to make fats into a highly efficient product system after it identified fats as what is needed. The use of animal cells or fat tissues is one of the different systems and approaches currently being used.

Yali Bio is taking a different approach. A proprietary technology is being built to build up a library of strains. Getting to the next step is to demonstrate the fermentation bioprocess by running the strains in fermentors as part of pilot programs to prove production at a small or intermediate scale.

The company went after some capital after those next steps. Lu is in the process of building a new laboratory after participating in an accelerated program for the last six months. The startup raised $3.9 million in seed funding in a round led by Essential Capital, with participation from new and existing investors. Angel investors include John Goldsmith. The funding brings the total funding to $5 million.

Part of the funding will go toward the lab, but also into the company's synthetic biology component, product development, identifying business partnerships, marketing and recruitment. By the end of the year, the company will have seven employees and a number of open positions in the area of product, food science and fermentation.

Startups making meat alternatives are gaining traction worldwide

Lu said that Yali Bio's technology is not unlike other approaches. The first wave of the cell-based approach started over seven years ago, and some are at pilot scale or have limited release in restaurants, like Eat Just or The Every Co.

We know what we can do with the existing team and we want to add additional capabilities to take the company from a R&D company to having tangible products. It depends on the regulatory process, the finished product and the technical complexity, but we think we can do it in two to three years.

Edward Shenderovich, managing partner at Essential Capital, said that most investors are new to the food alternative space, especially to the world of synthetic biology being applied to food as the technology has matured.

He believes we are at the forefront of a fourth agricultural revolution, where every revolution has led to lower costs and increases in product volume and quality. He said that this fourth one will be a huge change in supply chains and value creation opportunities for those involved.

Shenderovich said anything that enables us to move from an animal-based agriculture to an animal-free world using bio manufacturing is a worthy pursuit. We like to eat fat, and most cultivated meat is just proteins. Fat is making a comeback after being demonized.

Is cell-cultured meat ready for prime time?