California-based gas fermentation company NovoNutrients has entered the Assignment for the Benefit of Creditors (ABC) process, which serves as an alternative to bankruptcy.
The move follows news that Austrian ‘protein from air’ startup Arkeon has filed for insolvency.
In a LinkedIn post Friday, NovoNutrients former CEO David Tze (who transitioned to a senior adviser role in February) explained: “The technology works. We were proving that in our pilot phase. The challenge was capital intensity in a shifting investment climate.”
He added: “NovoNutrients enters its next chapter through an asset sale, after 7+ years transforming industrial CO₂ into protein. What we built could accelerate realizing your carbon capture and industrial biotech ambitions. CO₂ is the key bio-manufacturing input for the future, to make materials, chemicals, and yes, protein.”
The ABC process “opens a rare window to acquire proven gas fermentation technology with broad, multi-sector applications, issued patents, proprietary strains, and commercial-ready IP,” said Tze.
According to Tze, the firm has US patents covering gas fermentation and carbon utilization, proprietary non-GMO microbial strains “with verified performance,” trade secrets (bioreactor, scale-up models, downstream processing) and the Novotein and Novoceuticals brands
Also up for grabs are the firm’s lab and pilot equipment suite with “validated fermentation protocols and years of lab operational data” and tech achieving 73% protein content and high-value carotenoids from waste CO₂.
The deadline for bids is July 31 at 5pm PT. For more details on the assets and the bidding process, interested parties should contact Forrest Reineke at Armanino Advisory LLC.
‘In the right hands, with sufficient capital, the tech can still transform how we think about carbon and protein’
Founded by Brian Sefton and Russell Howard, NovoNutrients is one of a small, but high-profile group of startups attempting to decouple food production from agricultural land via gas fermentation, using gases instead of purified sugars to feed microbes that produce protein.
The firm, which raised an $18 million series A round led by Woodside Energy and CM Venture Capital in July 2024, captures industrial CO₂ emissions and combines them with hydrogen to produce a protein ingredient called Novotein for aquaculture, petfood, and human nutrition markets.
While gas fermentation technology is best-known for making fuel and chemicals (LanzaTech, Phase Biolabs, and Again), it is also being explored by several firms (Calysta, Circe, Solmeyea, Air Protein, Solar Foods, Aerbio, Unibio, Jooules) as a platform for food and feed production. LanzaTech is also moving into food and feed, having honed its tech for ethanol and specialty chemical production.
Using gases instead of sugars to feed microbes can lower input costs, simplify sterilization, allow for longer campaigns (because there is less risk of contamination), and potentially leverage waste or byproduct gases.
It’s not for the faint-hearted, however. Specialized bioreactors optimized for effective gas-liquid mixing and safety measures for handling gases can add to capital costs, and some of the sustainability claims don’t necessarily apply to first-generation plants. Scaling the technology is expensive, and finding affordable, sustainable sources of “green” hydrogen is also challenging.
“This isn’t the outcome we envisioned when we set out to capture megatons of CO₂ and feed the world,” noted Tze. “But the technology’s potential remains unchanged. In the right hands, with sufficient capital, it can still transform how we think about carbon and protein.”
More to follow…
Further reading
Arkeon CEO delivers postmortem on ‘protein from air’ startup: ‘We just simply ran out of time’
Gas fermentation: the future of sustainable protein, or hot air? In conversation with Aerbio
Unibio CEO: ‘We have the most efficient reactor design for gas fermentation’
Can gas fermentation deliver on its green promise for food and feed? In conversation with Calysta