ÄIO Secures €1M to Develop Sustainable Oils for Cosmetics

Founded in 2022 as a spin-off from Tallinn University of Technology, ÄIO uses precision fermentation to transform industrial side streams into nutrient-rich oils.AIOEstonian biotechnology company ÄIO has secured €1 million in funding from the Estonian government-backed Applied Research Program (RUP), organized by the Estonian Business and Innovation Agency (EIS). The funding will support a three-year research and development project focused on creating sustainable, yeast-derived oils and fats for cosmetics and personal care products.

Founded in 2022 as a spin-off from Tallinn University of Technology, ÄIO uses precision fermentation to transform industrial side streams into nutrient-rich oils. The process requires significantly fewer resources than traditional palm oil production, using 97% less land and 90% less water, according to the company.

The funding will help ÄIO develop eco-friendly alternatives to palm, coconut and petroleum-derived oils commonly used in cosmetics. These alternatives align with increasing regulatory pressures, such as the EU's deforestation regulation and tightening restrictions on harmful ingredients like PFAS and microplastics.

From left: ÄIO founders Nemailla Bonturi and Petri-Jaan Lahtvee.AIOÄIO’s solutions aim to provide sustainable, traceable, and high-performing ingredients for a wide range of cosmetics applications, from soaps to high-performance skincare and makeup. The company plans to scale its technology internationally and work with beauty brands to drive sustainable innovation in the industry. The total budget for the project is €1.8M.

"The cosmetics industry is at a turning point," said Magdalena Koziol, head of cosmetics development at ÄIO. "Beauty brands of all sizes now realize that sustainability isn’t just a nice-to-have, it's an essential requirement driven by increasing customer demand. 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."