Biotechnology company ÄIO has secured €1m in funding to accelerate the development of ecological alternatives to traditional oils used in cosmetics.
The Estonian company will use the funds to replace unsustainable oils in formulations with yeast-derived alternatives it has been developing.
The company uses a biomass and precision fermentation process to transform industrial side streams – waste materials generated during factory production – 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.
“This grant represents more than funding, it is validation from the Estonian government that our technology can fundamentally reshape how cosmetics ingredients are produced,” said Nemailla Bonturi, co-founder and CEO at ÄIO.
“We are 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.”
The €1m funding comes in the form of a grant from the Estonian government-backed Applied Research Programme (RUP).
It was organised by the Estonian Business and Innovation Agency (EIS).
“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,” added Ene Viiard, R&D Expert at the EIS Applied Research Programme (RUP).
“Biotechnology and sustainable biomaterials are among our strategic priorities.”
The beauty industry has been doubling down on investments in biotechnology and fermentation over the past year.
This saw Estée Lauder Companies (ELC) partner with biotechnology company Serpin Pharma in 2025 to explore longevity skin care innovations.
The pair are working together to research the efficacy of mitigating harmful inflammation and enhancing cell resiliency.
L’Oréal Groupe has also been investing in the space, and backed Chinese biotech start-up Veminsyn in May to help identify new ingredients and speed up the process of getting them to market.
It is not the first time L’Oréal has backed biotech innovations either.
US biotech firm Debut launched its artificial intelligence (AI) ingredient discovery platform this year after gaining backing from the French beauty giant in 2023.
L'Oréal led a €35m funding round in French biotech ingredients company Abolis last year.
It has also backed Geno, a venture to make biotech-based alternatives to ingredients based on palm and fossil fuels.