A tiny Estonian startup is tackling one of the food industry's biggest environmental problems with an unlikely solution: turning sawdust into edible fat. ÄIO has developed a proprietary yeast strain that consumes agricultural waste sugars and outputs fat molecules, potentially offering a sustainable alternative to ecologically destructive palm oil production that has decimated rainforests worldwide.
The palm oil industry has a massive environmental problem, and two Estonian scientists think they've cracked the code with engineered microbes and agricultural waste. ÄIO just emerged from TechCrunch Disrupt's Startup Battlefield with a technology that could fundamentally reshape how the world produces edible fats.
Co-founders Nemailla Bonturi and Petri-Jaan Lahtvee didn't set out to revolutionize food production. Bonturi was deep in doctoral research when she engineered something remarkable: a strain of yeast that breaks every rule in the fermentation playbook. Instead of the typical sugar-to-alcohol or sugar-to-CO2 conversion we see in bread and beer, her microbe consumes sugar and outputs fat molecules.
"We started working on it, developing metabolic engineering tools," Lahtvee told TechCrunch during the company's Battlefield presentation. The breakthrough came when they realized Estonia's abundant agricultural waste - corn stalks, lumber byproducts, sugarcane refuse - could feed their engineered yeast at industrial scale.
The timing couldn't be better for palm oil alternatives. The industry has become a $65 billion environmental nightmare, with plantations destroying 27 million acres of rainforest since 1990. Major food companies are scrambling for sustainable alternatives, but most substitutes sacrifice functionality or cost-effectiveness. ÄIO's approach solves both problems simultaneously.
"Our fat profile is very similar to existing fats," Lahtvee explains, noting their solid-fat form "most closely resembles chicken fat." But here's where it gets interesting - they can modify the fermentation process to produce liquid oils that compete directly with canola and rapeseed oil. The versatility opens doors across food manufacturing, cosmetics, and industrial applications.
The company's purity claims are bold but substantiated. "We have a very extensive analysis after we make our product and, so far, what we have seen is that our final product is to the same level as vegetable oils, except for the pesticides - even more pure," Bonturi told .