Formo Secures €35 Million Venture Debt Loan from European Investment Bank
Berlin-based startup Formo has recently announced the acquisition of a €35 million ($36 million) venture debt loan from The European Investment Bank (EIB). This funding will aid in the scaling of Formo’s fermentation technologies, bringing their total funding to €135 million ($139 million).
The infusion of cash comes on the heels of a successful $61 million series B round that Formo closed last fall. “By working with Formo, the EIB is supporting innovative solutions for sustainable consumption while also backing a growth-stage European startup,” stated EIB VP Nicola Beer.
Venture debt financing, a type of loan tailored for startups and fast-growing companies, offers more flexibility compared to traditional debt options. It does not dilute existing shareholder equity but usually comes with a higher interest rate and shorter repayment terms.
Formo’s Innovative Approach to Cheese Alternatives
Formerly known as LegenDairy Foods, Formo is renowned for its pioneering work in engineering microbes to produce dairy proteins like casein through precision fermentation. However, their initial range of cheeses utilizes a different technology by cultivating naturally occurring Aspergillus Oryzae (koji) as a key ingredient through fermentation. Additional plant-based fats and ingredients are incorporated to craft cheese alternatives such as ‘Frischhain’ and ‘Camembritz’.
Currently, Formo has the capacity to produce triple-digit tons of cheese on a monthly basis and aims to triple this capacity in the coming year. Christian Poppe, head of global public affairs and general manager, APAC, shared that their process involves fermenting koji strains in nutrient-rich solutions to produce koji protein, which is then isolated, dried, and incorporated into their cheese alternatives.
Poppe highlighted the neutral flavor and high functionality of koji, making it ideal for crafting cheese alternatives that closely mimic traditional cheese in texture and taste.
Future Plans for Formo
While koji serves as a valuable ingredient, it does not offer the same stretchability and meltability as traditional casein or whey proteins. Formo is on track to introduce hard cheeses containing animal-free casein this year, expanding their product portfolio.
Formo’s focus remains on launching consumer products featuring casein proteins rather than supplying them as B2B ingredients. Poppe emphasized their commitment to building a strong brand that directly engages consumers.
Manufacturing and Regulatory Considerations
Regarding manufacturing, Poppe stated that building their own facilities is not a current priority. Formo is exploring partnerships to optimize production capabilities. Additionally, the company is actively seeking self-GRAS status for its casein proteins and asserts that koji, with its history of use in food products, does not require special regulatory approval.
