NovoNutrients Enters Assignment for the Benefit of Creditors
California-based gas fermentation company NovoNutrients has initiated the Assignment for the Benefit of Creditors (ABC) process, a move positioned as an alternative to traditional bankruptcy proceedings. This strategic decision comes on the heels of reports that Austrian startup Arkeon, which focused on ‘protein from air’, has filed for insolvency.
In a recent LinkedIn post, former CEO David Tze, who transitioned to a senior adviser role earlier this year, stated, “The technology works. We were proving that in our pilot phase. The challenge was capital intensity in a shifting investment climate.”
Moving Forward Through Asset Sale
Tze further elaborated that NovoNutrients is embarking on its next chapter via an asset sale, marking over seven years dedicated to converting industrial CO₂ into protein. He emphasized, “CO₂ is the key bio-manufacturing input for the future, to make materials, chemicals, and yes, protein.”
The ABC process is expected to provide a unique opportunity to acquire proven gas fermentation technology with extensive applications across multiple industries, along with issued patents, proprietary strains, and commercial-ready intellectual property.
Available Assets and Bidding Information
According to Tze, the company’s significant assets include:
- US patents covering gas fermentation and carbon utilization.
- Non-GMO microbial strains with verified performance.
- Trade secrets related to bioreactor design, scale-up models, and downstream processing.
- Novotein and Novoceuticals brands.
Additionally, the firm’s lab and pilot equipment, which includes validated fermentation protocols and extensive operational data, as well as a technology that achieves 73% protein content and high-value carotenoids from waste CO₂, are also offered for sale. The deadline for bids is set for July 31 at 5 PM PT. Interested parties can reach out to Forrest Reineke at Armanino Advisory LLC for further details.
The Future of Carbon and Protein
Founded by Brian Sefton and Russell Howard, NovoNutrients is part of a select group of startups striving to decouple food production from conventional agricultural practices through gas fermentation. This innovative method involves utilizing gases instead of purified sugars to nourish microbes that produce high-quality protein.
The firm previously raised an $18 million Series A round led by Woodside Energy and CM Venture Capital in July 2024. NovoNutrients captures industrial CO₂ emissions and combines them with hydrogen to create a protein ingredient called Novotein, aimed at aquaculture, pet food, and human nutrition markets.
Challenges and Opportunities
While gas fermentation technology has been predominantly recognized for producing fuels and chemicals—highlighted by companies like LanzaTech and Phase Biolabs—its potential in food and feed production is being explored by various firms. Gas fermentation promises to lower input costs, simplify sterilization processes, and mitigate contamination risks.
However, the venture isn’t without challenges. The requirement for specialized bioreactors and safety measures for gas handling contributes to high capital costs. Moreover, the sustainability claims associated with first-generation plants are often questionable, and scaling the technology to a feasible level remains a significant barrier.
Tze reflected on the current situation, stating, “This isn’t the outcome we envisioned when we set out to capture megatons of CO₂ and feed the world. 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.”
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
