Analysis of Deep tech start-up Solar Foods Oy

A company on the verge of creating Natural Protein Revolution

Solar foods is a deep tech startup venture which invented Solein, a revolutionary single-celled natural protein which is safe for Human Consumption.

Solein is produced in a controlled laboratory environment independent from weather and irrigation facilities. It is free from agricultural limitations and causes very less environmental impact compared to other conventional food production process.

It is quite interesting to investigate the technology behind the Solein production process. The proprietary technology used by solar foods i.e., the natural fermentation process under suitable parameters produces Solein. Solein has a neutral taste like wheat flour, and its constituents include 50% protein, 20–25% carbs, and 5–10% fats.

Potential Impacts of Solein

Improving Human Health

The accessibility of products like Solein can have a considerable impact on improving human health. It can positively impact on lives of 160 million children who are suffering from malnutrition and 795 million people across the world. Protein-energy malnutrition is considered the most common problem in the world. Food products like Solein, which has 50% of protein, can help to tackle the world food crisis.

Solein can positively impact on climate change without causing any environmental burden. Today 18–51% of global greenhouse gas emission driven by livestock rearing and processing. In contrast, It is compelling to see that the bioprocess involved in the production of Solein uses CO2 and Water as crucial constituents. There is a growing concern on water scarcity in developing countries, solutions like Solein, which uses way very less water to produce can be a huge advantage.

Addressing resource constraints and Animal welfare

Solar foods claim that Solein is ten times more efficient at producing yields than traditional protein source foods such as Beef and Soy. Across the globe, 78% of agricultural land is used for livestock, including grazing land and cropland dedicated to the production of food.

Business opportunity

The food industry is worth 1.46 trillion dollars according to 2014 estimates. It involves key players such as food manufacturers, brokers, wholesalers, distributors, and large retail stores which can facilitate food products reach consumers.

Solar foods have Identified multiple application cases for Solein; this shows that the company can

  • Work in collaboration with food manufactures by supplying Solein as an essential food ingredient.
  • Work as a supplier for protein source for plant-based food producers,
  • Work in partnership with laboratory-grown meat producers as a supplier of protein source.

However, To supply Solein to all the partners mentioned above, Solar foods needs to focus on mass production of Solein. The present production process for Solein takes two weeks in a coffee cup-sized bioreactor to produce 1gram of Solein. However, to reach supply goals for at least one of the above partners, solar foods must produce Solein in large quantities.

Challenges facing Solar foods

Time to market

Solar foods use new proprietary technology to produce Solein. It requires long development time. For instance, It takes two weeks to produce 1gram of Solein in a coffee cup -bioreactors, the process is slow. To meet the market demand, they should be able to produce large quantities of Solein in less time. To do that they need to improve their production technology.

Capital Intensive

The development of new technology is a capital intensive process because the production often comprises of expensive infrastructure. Scaling can also be costly as they have to build specialized machinery to support production processes.

Technology risk

The technology developed by Solar foods can often be categorized as low technology readiness because, In controlled lab conditions, the bioreactor can produce 1gram of Solein in two weeks. From initial experiments, we have proof of concept that the new technology works. Further development needed to done to increase the production quantity of Solein. Often seeking technical expertise from external life sciences consultants can speed up the development process.

Growth prospects

The company needs to focus on investing in production technology and machinery to scale its operations and improve the efficiency of its Solein production process.

In addition to that company need to focus on building its network and collaborations with venture capitalists, accelerators/incubators, food manufacturers, and corporate ventures. The collaborations can provide key resources through their interactions by giving access to R&D application labs, Chemical labs, fermentation labs, expertise to navigate through regulatory compliances, distribution networks, industrial, market and technical knowledge.

Competition

It is entirely unclear whether solar foods aim to establish itself as a protein food source by establishing itself as an independent brand or work in collaboration with partners. If the company seeks to go into the market as a separate brand. In such a scenario, they have to face competition with established brands amongst plant-based producers, lab-grown meat producers, Insect protein producers, natural protein food source, and pharmaceutical protein suppliers.

Key revenue drivers

Solar foods key revenue drivers include collaborations with food manufacturers and other partners in the food industry. As food manufacturers innovate and launch new products, Solar foods can make collaborations where they can act as a critical protein source suppliers.

Key profit drivers

Solar foods scaling of supply chain and increase in production efficiencies can contribute significantly to drive profits.

Operating expenses

Solar foods can face high costs on operating and managing the supply chain, Investment in R&D, process improvements, and marketing efforts.

Metrics to be considered for potential investment

  1. # of strategic alliances and external contacts
  2. # Technology development milestones
  3. # Learnings from market and product development process

Disclaimer: The views expressed in this Story are personal, I’m not compensated in anyway to write this story. I’m doing this purely to learn, spread my ideas and views. Feel free to write critiques, comments and suggestions in comment section below.

I’m Amarnath Nagula, I’m an aspiring product designer. I’m passionate about technology, crypto, blockchain, and social impact. Formula 1 and Cricket fanatic