Neela Biotech secures £2.1 million to scale waste-to-SAF

Cambridge-based biotechnology start-up Neela Biotech has raised £2.1 million in pre-seed funding to scale up its technology for converting food, agricultural and forestry waste into sustainable aviation fuel (SAF).

The funding will support the company’s transition from laboratory research to pilot-scale trials at an existing biogas plant over the next two years. The investment comes as the aviation industry faces rising fuel costs and seeks alternatives to conventional jet fuel.

Neela Biotech uses an artificial intelligence (AI)-guided microbial process to convert diverse waste streams into fatty acids, which can serve as feedstocks for hydroprocessed esters and fatty acids (HEFA)-based SAF production. The technology aims to address the sector’s dependence on waste cooking oil and other fats, whose limited availability constrains the expansion of SAF production.

HEFA accounts for around 95% of current SAF production, according to the company. Although it is the most established and relatively economical production route, the fuel still costs approximately 1.5 times more than conventional jet fuel. Emerging alternatives, such as electricity-based e-SAF, can cost up to 10 times more.

Neela’s approach builds on anaerobic digestion, a process already used in commercial biogas plants across Europe. Integrating its technology with existing infrastructure could reduce capital investment, accelerate deployment and create an additional revenue stream for biogas plant operators. The company also aims to lower energy consumption by using microbial processes instead of energy-intensive thermochemical methods.

The technology could help diversify SAF feedstocks, reduce dependence on fossil fuels and support decentralised fuel production using locally available waste.

The funding round was led by UK climate investor Elbow Beach, which invested £1.5 million. Ascension, Cambridge Enterprise, Ventures Together and strategic angel investors also participated. Neela is part of the IAG innovation programme and has received grant funding from Innovate UK and the Henry Royce Institute.

Jonathan Pollock, CEO of Elbow Beach, said, “Neela’s approach is different as it builds on infrastructure that already exists across Europe, avoiding the capital costs that have held back other SAF players, while its low-energy process gives it a credible route to cost parity with fossil jet fuel. It’s that combination of capital efficiency and genuine potential for commercial deployment that convinced us to lead this round from pre-seed through to pilot.”

Deepanshu Singh, CEO of Neela Biotech, added, “Our Controlled Microbial Upcycling process leverages recent advances in AI-driven synthetic biology to convert diverse waste streams like food and agriculture waste into HEFA-compatible feedstocks. By integrating our technology with existing biogas plants, we can reduce capital requirements, accelerate deployment, and enable distributed, local production.”

Singh said that the £2.1 million funding round, led by Elbow Beach, will help Neela Biotech scale towards its pilot and move closer to making locally produced SAF cost competitive with fossil fuel.

The company aims to use the funding to advance its pilot programme and move towards producing locally sourced SAF at costs competitive with conventional jet fuel.