Neela Biotech raises £2.1m led by Elbow Beach with support from Cambridge Enterprise
This article covers Neela Biotech, a Cambridge biotech startup, which has raised £2.1m in a pre-seed funding round to advance its AI-guided microbial process into a pilot-scale trial at a biogas plant over the next two years. The funding will support converting food, farm and forestry waste into fatty acids for HEFA-based sustainable aviation fuel, targeting biogas plants and the aviation sector.
Neela Biotech, a Cambridge biotech startup, has raised £2.1 million in a pre-seed funding round to move its AI-guided microbial process from the lab into a pilot-scale trial at a biogas plant over the next two years. The funding will support work converting food, farm and forestry waste into fatty acids that can feed established HEFA-based sustainable aviation fuel (SAF) production, a route the company says could help make low-carbon jet fuel cheaper and more widely available.
Why it matters
The aviation sector is searching for scalable, cost-competitive SAF pathways. Today roughly 95% of SAF is produced using HEFA, which depends on limited feedstocks such as waste cooking oil. That constraint caps growth and keeps HEFA-based SAF more expensive than fossil jet fuel. At the same time, 2026’s geopolitical shocks and the closure of the Strait of Hormuz have added pressure to global oil supply and pushed jet fuel prices higher, exposing airlines and consumers to volatility.
Neela’s approach aims to widen the feedstock base by converting diverse waste streams into HEFA-compatible precursors while using existing anaerobic digestion infrastructure. If it can be deployed widely across Europe’s biogas plants, the company argues it could lower capital costs and reduce dependence on imported jet fuel, with potential benefits for energy security and local supply chains.
Inside the product
Neela’s process uses AI-guided synthetic biology to control microbial communities that convert assorted organic waste into fatty acids. Those fatty acids are intended as feedstock for HEFA, the established route to SAF. The technology sits on top of anaerobic digestion, a process already deployed at scale in biogas plants across Europe, which Neela plans to adapt rather than replace.
Key product attributes the company highlights are lower energy intensity compared with thermochemical routes and the ability to accept a broader range of organic residues — food waste, agricultural residues and forestry by-products — rather than scarce oils and fats. The pilot-scale trial planned for a partnered biogas plant over the next two years will test conversion rates, integration with existing digestion operations and the economics at distributed sites.
Who are the investors?
The pre-seed round was led by Elbow Beach, whose £1.5 million commitment makes up the majority of the £2.1 million raised. Other participants include Ascension, Cambridge Enterprise, Ventures Together and a group of strategic angel investors. Neela has also secured non-dilutive support via the IAG innovation programme and grants from Innovate UK and the Henry Royce Institute.
In the announcement, Jonathan Pollock, CEO of Elbow Beach, said:
Aviation's fuel bill is only going one way, and the industry urgently needs alternatives that can scale commercially. Too much SAF technology solves for cleaner fuel without solving for cheaper or more available fuel, largely because it still depends on limited feedstocks like waste cooking oil. 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.
Cambridge Enterprise, the university’s commercialisation arm, is a typical investor in deeptech spinouts, providing early-stage support and connections to academic resources. Ascension and Ventures Together are venture investors known for backing early-stage sustainability and climate-related companies. The mix of specialist climate capital, university-linked finance and angels reflects a common early-stage funding pattern for UK biotech ventures aiming to commercialise platform technologies.
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Founder perspective
In the announcement, Deepanshu Singh, CEO of Neela Biotech, said:
Most SAF today is made from waste oils and fats through HEFA. But the world burns 300 million tons of jet fuel every year, and there is simply nowhere near enough waste oil and fat to meet this demand. When Friederike and I founded Neela Biotech, we set out to make HEFA-SAF cheaper and scalable. 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. The £2.1 million funding round, led by Elbow Beach, will help us scale towards our pilot and move us closer to making locally produced SAF cost competitive with fossil fuel.
Singh framed the pilot as a test of integration with operational biogas plants and of the company’s claims around capital efficiency and low-energy operation. The team’s immediate technical priorities will include verification of fatty acid yields, process stability and downstream compatibility with HEFA conversion steps.
The bigger picture
Neela’s proposition sits at the intersection of synthetic biology, circular waste management and existing renewable gas infrastructure. Using anaerobic digestion plants as deployment sites could lower the barrier to scaling SAF production compared with building new, bespoke facilities. That matters in the UK and Europe where many biogas plants are financially pressured as subsidy regimes end and operators look for new revenue streams.
The funding round signals continued interest from biotech investors in industrial bioeconomy applications that target commodity markets such as aviation fuel. If pilots demonstrate reliable yields and favourable unit economics, distributed production of HEFA-compatible feedstock could become one practical lever to reduce Europe’s reliance on imported jet fuel and to insulate airlines from future price shocks.
Taken together, Neela’s pilot — and the wider set of projects marrying AI, biology and existing infrastructure — will be worth watching as policymakers and the aviation industry seek routes to both decarbonisation and energy resilience across the UK and European markets.
They've invested in Neela Biotech
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