Terra Oleo: A Breakthrough in Sustainable Lipid Production

Singapore-based startup Terra Oleo has officially launched from stealth mode, securing a remarkable $3.1 million funding round aimed at supporting its innovative yeast-based fermentation platform. This technology is set to revolutionize the production of tailored lipids designed to replace palm oil fractions and cocoa butter across a variety of industries.

Investors and Backing

The funding round received support from a range of notable investors, including ADB Ventures, The Radical Fund, Elev8.vc, Better Bite Ventures, as well as a strategic investor from the palm oil sector, among others.

Founding Team and Goals

Founded in 2023 by industry experts Shen Ming Lee, Boon Uranukul, PhD, and Min Hao Wong, PhD, Terra Oleo has established partnerships for product testing with firms in oleochemicals, food, personal care, and cosmetics. The company has recently been selected to participate in Breakthrough Energy’s 2025 Fellows Program, indicating strong interest and validation within the industry.

Shen Ming Lee highlighted their focus on scaling from lab to pilot production: “We currently co-manufacture in Thailand and Singapore and plan to scale up our first products through a mix of larger-scale co-manufacturing and potentially a joint venture with a manufacturing partner.” She added that many investors tend to shy away from funding large, capital-intensive plants, prompting a strategic collaboration with manufacturing partners who could also be customers.

Market Position and Product Offering

Despite the challenges presented by current market economics, Shen Ming Lee believes that microbial fermentation can successfully target niche high-value applications where customers are willing to pay a premium for specialized fats. “We begin with higher-margin products, where strong demand exists. Over time, we aim to achieve economies of scale that will allow us to decrease costs and expand into larger segments of the oils and fats market,” she explained.

By utilizing lower-cost feedstocks, such as waste streams from starch and biodiesel production, Terra Oleo stands to significantly cut costs. “One of our feedstocks is up to 70% cheaper than dextrose,” Lee elaborated.

Demand Driven by Supply Chain Pressures

Recent pressures on palm oil and cocoa supply chains have escalated costs and created volatility, generating an increasing demand for sustainable alternatives. “Our sense is that demand is predominantly driven by a need for supply security, particularly for cocoa butter,” Lee stated. Many companies are also eager to adopt a ‘palm oil free’ stance for environmental reasons.

Product Development Through Synthetic Biology

Terra Oleo’s foundational approach lies in engineering yeast to meet specific customer requirements. “We focus on matching fatty acid profiles, triglyceride compositions, and even the melting behaviors of fats like cocoa butter and palm oil fractions,” Lee noted. By leveraging synthetic biology, the company can fine-tune yeast to produce lipids that miraculously align with industry needs.

Innovative Fat Composition Strategies

“For some of our clients, the physical properties of fats—such as melting point or crystal structure—are critical,” Lee added. Terra Oleo has developed a proprietary range of yeast strains producing varied fat profiles, maximizing flexibility in addressing customers’ needs through tailored solutions.

Labeling and Market Regulations

When it comes to labeling their products, especially in the food industry, Lee explained that, “Technically, our offerings are bioequivalents of the fats they’re meant to replace.” For non-food industries like cosmetics, labeling will adhere to the main fatty acids, while in food, their product will likely be categorized as a ‘Cocoa Butter Equivalent,’ a recognized term in the food sector for fats mimicking the functionalities of cocoa butter.

The Future of Oils

As Terra Oleo positions itself strategically in the competitive lipids market, industry experts and buyers alike await to see how this innovative approach can reshape the landscape of sustainable oils and fats, addressing both demand and environmental concerns.