Neela Biotech Raises £2.1M to Make Jet Fuel from Waste

The big picture: Cambridge-based Neela Biotech has raised £2.1 million in pre-seed funding to test whether food, agricultural, and forestry waste can fill the gap in sustainable aviation fuel supply. The round was led by climate investor Elbow Beach.

Why it matters:

• Supply bottleneck: Current sustainable aviation fuel (SAF) production relies heavily on limited waste cooking oil and animal fats, creating a significant supply constraint.
• Mandate pressure: UK SAF mandates require increasing proportions of jet fuel from sustainable sources, a demand that existing HEFA feedstocks alone cannot meet.
• Cost and volatility: SAF remains more expensive than fossil jet fuel, and global events can significantly increase traditional jet fuel prices, highlighting the urgent need for cost-competitive alternatives.

How it works:

• Microbial conversion: Neela Biotech utilizes AI-guided microbes in conjunction with anaerobic digestion, a process already employed by biogas plants, to convert diverse organic waste into jet fuel.
• Capital efficiency: The technology is designed for integration into existing biogas plants, which significantly reduces the capital expenditure typically required for scaling SAF production.
• Energy and income: This approach is less energy-intensive than thermochemical routes and offers a new revenue stream for UK biogas operators facing expiring government subsidies.

The catch: Neela’s approach offers a promising path to capital efficiency by leveraging existing biogas infrastructure, but its technology is still pre-pilot. The company has yet to demonstrate its process at scale or publish cost-per-tonne figures for its fatty acids, which will be critical for achieving cost parity with fossil fuels. The broader climate tech sector, particularly for hardware-heavy startups requiring first-of-a-kind plants, faces a significant Series B funding gap in Europe, posing a challenge even for innovative solutions like Neela’s after its initial pilot success.

Key Facts

• Company: Neela Biotech
• Amount: £2.1M
• Round: Pre-Seed
• Investors: Elbow Beach (lead), Ascension, Cambridge Enterprise, Ventures Together, strategic angel investors
• Founders: Deepanshu Singh, Friederike Nintzel
• Sector: Sustainable Aviation Fuel
• Headquarters: Cambridge, UK