ÄIO uses precision fermentation to produce safe, sustainable alternatives to unethical, environmentally destructive, and polluting ingredient options available on the market.
Tightening legislation and increasing consumer awareness of health, environmental, and ethical concerns associated with ingredients like animal-based fats, palm and coconut oil, and other mineral oils have led to a surge in demand for sustainable alternatives in the cosmetics and chemical industries. The alternative fat market is expected to grow by 6% annually to reach $4.5 billion by 2032. ÄIO develops fermentation-derived solutions to provide greener and safer alternatives to reduce dependence on fossil-based and other unsustainable oils in personal care formulations.
The Estonian biotechnology player just secured €1M (in the form of a grant from the Estonian government-backed Applied Research Programme (RUP), organised by the Estonian Business and Innovation Agency (EIS)) to support research into the development of new and scaling of its existing offer. The grant will support a three-year research and development project focused on microbial fermentation-derived lipids and their derivatives, specifically for use in cosmetic and personal care ingredients.
Founded in 2022 as a spin-off from Tallinn University of Technology, ÄIO uses biomass and precision fermentation to transform industrial side streams into nutrient-rich oils and fats. The process requires 97% less land and 90% less water than conventional palm oil production, according to company data. For the cosmetics sector, ÄIO’s solutions offer an eco-conscious, high-performing, and cost-effective alternative to palm and coconut oil, commonly used in a wide variety of personal care products. Its nourishing properties and additional bioactive benefits make it a natural alternative to petroleum-derived mineral oils, which can be harmful to the skin and cause environmental pollution.
– This grant is validation from the Estonian government that our technology can fundamentally reshape how cosmetics ingredients are produced, says Nemailla Bonturi, Co-founder and CEO at ÄIO. We’re now ready to show we can scale that impact on the international stage, bringing smarter, more sustainable ingredient alternatives to an industry that touches the everyday lives of all of us. We’re excited to start commercialising our innovation and to collaborate with forward-thinking beauty and personal care brands around the world.
– We actively support the development of Estonian innovations that have clear potential to become globally competitive products with high added value and impact on pressing worldwide challenges. Biotechnology and sustainable biomaterials are among our strategic priorities, says Ene Viiard, R&D Expert at the EIS Applied Research Programme (RUP). In ÄIO, we see an exceptional team with the scientific knowledge and disruptive attitude that proves that even from a small country like Estonia, it is possible to produce and scale world-changing innovations.
The cosmetics industry faces tightening legislation, including PFAS restrictions and concerns over microplastic ingredients’ potential health risks and pollution. The grant’s timing also aligns perfectly with other major regulatory shifts, particularly the EU’s deforestation regulation that will significantly impact palm oil sourcing and create even more urgent demand for traceable, sustainable alternatives and “future-proof supply chains.” ÄIO’s yeast-based alternatives aims to provide traceability and consistent quality compared to agricultural ingredients that are subject to climate and political volatility. The versatile ingredients can be used in various cosmetics applications, from soap to moisturizers, serums, and makeup formulations with specialised pigments.
– The cosmetics industry is at a turning point, Magdalena Koziol, Head of Cosmetics Development at ÄIO, states. Beauty brands of all sizes now realise that sustainability isn’t just a nice-to-have, it’s an essential requirement driven by increasing customer demand. Until recently, sustainable solutions have been held back by performance or price-related concerns compared to ingredients like palm or coconut oil. Through research, development, and scientific validation, we’re showing that fermentation-derived ingredients have huge commercial potential.
ÄIO is currently in active discussions with cosmetics manufacturers interested in utilising its ingredients in various product formulations. It has also begun sending samples to cosmetic producers as it prepares for the next phase of commercial development. The company plans to fundraise by the end of Q3 2026 to support its expansion plans.
– We’re seeing unprecedented interest from manufacturers that realise sustainable sourcing is no longer optional, Koziol continues. We’re ready to continue scaling up our efforts and are actively seeking partners to join our mission to create real change in the industry. The question isn’t whether the industry will transition to alternative ingredients, but how quickly.
