Tallinn-based ÄIO raises EUR 1M to develop more sustainable cosmetics

Tallinn-based biotech company ÄIO, which develops sustainable fats and oils without the use of animals or plants by leveraging innovative fermentation technology, has received €1 million in funding to speed up the creation of safer and more environmentally friendly alternatives to conventional oils used in the cosmetics and chemical industries.

The grant was provided through the Estonian government-supported Applied Research Programme (RUP), managed by the Estonian Business and Innovation Agency (EIS).

“This grant represents more than funding, it’s validation from the Estonian government that our technology can fundamentally reshape how cosmetics ingredients are produced,” says Nemailla Bonturi, Co-founder and CEO at ÄIO. “We’re now ready to show we can scale that impact on the international stage, bringing smarter, more sustainable ingredient alternatives to an industry that touches the everyday lives of all of us. We’re excited to start commercialising our innovation and to collaborate with forward-thinking beauty and personal care brands around the world.”

Founded in 2022 as a spin-off from Tallinn University of Technology, ÄIO leverages biomass and precision fermentation to convert industrial side streams into nutrient-dense oils and fats. According to company data, this process uses 97% less land and 90% less water compared to traditional palm oil production.

For the cosmetics industry, ÄIO offers an eco-friendly, high-performance, and cost-efficient alternative to palm and coconut oils, which are widely used in personal care products. Thanks to its nourishing properties and added bioactive benefits, the company’s solution also serves as a sustainable replacement for petroleum-based mineral oils, which are known to be harmful to both the skin and the environment.

Driven by its mission to replace unsustainable and unethical oils in cosmetic formulations, ÄIO has developed a lipid-rich, yeast-derived alternative that is vegan and supports the principles of clean beauty.

The newly awarded grant will fund a three-year research and development initiative focused on microbial fermentation-derived lipids and their derivatives, specifically targeting cosmetic and personal care applications. The total budget for the project is expected to reach €1.8 million.

“We actively support the development of Estonian innovations that have clear potential to become globally competitive products with high added value and impact on pressing worldwide challenges. Biotechnology and sustainable biomaterials are among our strategic priorities. Competition for RUP support is high, but in ÄIO, we see an exceptional team with the scientific knowledge and disruptive attitude that proves that even from a small country like Estonia, it is possible to produce and scale world-changing innovations." says Ene Viiard, R&D Expert at the EIS Applied Research Programme (RUP).

“The cosmetics industry is at a turning point. Beauty brands of all sizes now realise that sustainability isn’t just a nice-to-have, it’s an essential requirement driven by increasing customer demand,” says Magdalena Koziol, Head of Cosmetics Development at ÄIO. “Until recently, sustainable solutions have been held back by performance or price-related concerns compared to ingredients like palm or coconut oil. Through research, development, and scientific validation, we’re showing that fermentation-derived ingredients have huge commercial potential for a future where both everyday and luxury beauty products don’t come at the cost of our environment or human health.”

ÄIO is actively engaging with cosmetics manufacturers interested in incorporating its ingredients into a range of product formulations. The company has also started sending samples to producers as it moves toward the next stage of commercial development. To support its growth plans, ÄIO intends to launch a fundraising round by the end of Q3 2026.