How Yali Bio plans to revolutionize alternative fats


Biotechnology is science, but Yulin Lu sees it as something deeper.

Yes, it is processes. It is chemistry. It is creation. But he also sees it as a way to push society to a more sustainable method of food production.

That task is at the heart of Lu’s company, Yali Bio — which takes its name from the Chinese word for “noble.” Lu, the co-founder and CEO of Yali Bio, is concentrating on creating an ingredient that has not always been seen as noble, but is increasingly necessary as meat and dairy alternatives become a bigger part of food choices: fats.

Lu, who has worked for biotech companies including plant-based egg titan Eat Just, said the space is limited by available ingredients. And the biggest impediment to making an impressive plant-based product, he said, are the fats currently available. For example, he said, many plant-based meats currently use coconut oil in their products.

“The way it melts in the mouth is different,” he said. “It melts very fast, it melts at lower temperatures compared to animal fats. And then the flavor delivery is also different with these vegetable oils. The flavor attributes are not as complex or what you can associate with tasty meat and dairy products. …That’s why these attributes need to be created by making better quality fats.”

Yali Bio makes fats like those naturally occurring in animal meat and dairy through precision fermentation. The company is still in R&D mode, but is making waves in the plant-based ingredients space. Last month, the company raised $3.9 million in a seed round, which brings its total funding to $5 million. The round was led by Essential Capital, and had participation from Third Kind Venture Capital, S2G Ventures, CRCM Ventures, FTW Ventures and First In Ventures.

Lu said the funds will go toward helping Yali Bio scale up to a volume where more tests can be performed on the fat it produces. The company is also looking to build its own lab space — it’s currently working out of an accelerator — and hire more team members.

Duplicating what’s in nature

With human appreciation of meat and dairy stretching back thousands of years, Lu said it makes sense for Yali Bio to start by making close copies of what’s naturally in these animal-based foods.

“We know how they perform based on the history of use and consumer experience,” Lu said.

In Yali Bio’s precision fermentation process, it places modified organisms in bioreactors, where they create fat molecules when they are fed different sugars. The products of the fermentation are in “high proximity” to what comes from animal products, he said.

Scientists in Yali Bio’s lab.

Courtesy of Yali Bio


Because all of the inputs are plant-based, Lu prefers to say that Yali Bio’s fats are plant-based — though some other companies using precision fermentation in similar ways to create proteins that naturally come from animals call their products “animal-free.”

As a startup, Yali Bio is working to figure out different aspects of fat creation. There are a variety of naturally occurring animal fats in both meat and dairy, and Yali Bio is working to produce several of them. It is also doing some research into the plant-based product sector. Two of the more common challenges Lu has heard from manufacturers involve companies working on whole cuts of beef and plant-based cheese development. He said Yali Bio has talked with some of these companies about what they want and is using that information to develop future fat ingredients.

“Those products are waiting for a better functioning fat — that we can make,” Lu said.

Yali Bio is also working to recreate different forms of fats — ranging from the solid fats in meat to lard to dairy fats. Lu said the company is trying to build these different compositions as well as testing them in different applications.

Fermenting for the future

Yali Bio has yet to identify its potential first commercial product, and Lu was hesitant to offer any sort of development timeline. The company plans to develop additional prototypes in the spring and summer to see what works best. Once it has identified the best option, Yali Bio will be able to set more of a future schedule, he said.

Lu said the market need for precision fermented fats is apparent. Not only will these fats help with the performance of plant-based meat and dairy, but they are also more sustainable than alternatives. Coconut and palm oil farming are common causes of deforestation. Compared with animal products, Yali Bio’s fats also have a much lower carbon footprint. According to statisics from the company, Yali Bio’s fats produce less than 0.5 kilogram of carbon dioxide per serving — compared to 15 kg for beef, 4 kg for pork and 2 kg for butter.

In the next five to 10 years, Lu forsees Yali Bio being able to produce a variety of highly functional and differentiated fats at scale. In turn, he said, this can make a big difference in the types of food that people want to eat. 

“The functional ability of fats, because they can enable these better, more authentic taste of plant-based meat and dairy products, can [make these products] have broader reach to the consumers,” he said.

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