Neela Biotech raises £2.1 million for AI-driven SAF
Neela Biotech, the Cambridge-based biotech startup turning waste into sustainable aviation fuel (SAF), announced Oct. 8 that it has raised £2.1 million (USD$2.78 million) in preseed funding to take its technology from the lab to a pilot-scale trial at a biogas plant over the next two years.
The investment comes as the aviation industry searches for a way to scale sustainable fuel production beyond today’s limited feedstock supply, according to Neela Biotech—a challenge sharpened by this year’s spike in global jet-fuel prices.
Neela Biotech transforms diverse waste streams from food, agriculture and forest residue into SAF through an artificial intelligence (AI)-guided, controlled microbial process.
The process converts these waste streams into fatty acids, a critical precursor for hydroprocessed esters and fatty acids (HEFA)-based SAF production, unlocking an abundant new feedstock in place of “scarce” waste cooking oils, Neela Biotech said.
Around 95 percent of the SAF made today is produced using HEFA, a process that converts waste cooking oil and other fats into fuel.
HEFA-based SAF is the industry’s most established method, but it depends on a limited supply of feedstocks, which Neela Biotech said caps how far it can scale.
HEFA is the cheapest SAF on the market today but still costs about 1.5 times more than standard jet fuel, and newer methods such as eSAF (fuel made using renewable electricity) can cost up to 10 times more.
With the U.K. importing more than half its jet fuel from the Middle East, airlines remain exposed to volatile prices and energy-security risks, with the resulting costs increasingly passed on to consumers through higher ticket prices.
A scalable alternative to SAF
Neela Biotech said it has set out to offer both a scalable and cost-competitive alternative to these existing SAF methods.
Rather than developing a new production process from scratch, Neela said it reengineers an established one.
Its technology is built on anaerobic digestion—the same process already running at scale in biogas plants across Europe.
By deploying into this existing infrastructure, rather than building new facilities, Neela Biotech said it substantially lowers the capital expenditure required to produce SAF at scale.
It also gives U.K. biogas-plant operators a new source of income, supporting a sector where many plants are at risk of closing as government subsidies for biogas run out.
Neela Biotech said its process is also low energy by design, replacing the energy-intensive thermochemical processes used in conventional SAF production with a microbial alternative.
By using alternative waste-derived feedstocks and existing biogas plants, it reduces reliance on fossil fuels and exposure to oil-price volatility and geopolitical instability.
“These risks have become acute in 2026,” the startup stated. “The closure of the Strait of Hormuz has already disrupted roughly a fifth of the world’s oil supply, pushing jet-fuel prices up and compounding vulnerabilities already exposed by Europe’s shift away from Russian energy supplies. This year alone, the global airline industry’s fuel bill is set to rise by $98 billion.”
Taken together, Neela Biotech said these advantages give it a credible path to cost parity with fossil jet fuel at scale—“something neither HEFA nor eSAF has achieved on its own,” the biotech startup stated.
“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,” said Neela Biotech CEO Deepanshu Singh. “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.”
Preseed fundraise to fuel scaling up
The round was led by Elbow Beach, one of the U.K.’s most active specialist climate investors, with a £1.5 million (USD$1.99 million) preseed investment.
The total £2.1 million investment round includes participation from Ascension, Cambridge Enterprise Ventures, Ventures Together and strategic angel investors and will enable Neela Biotech’s scale-up to move into pilot-scale trial.
Neela is also part of the International Airlines Group innovation program and has secured grant funding from Innovate U.K. and the Henry Royce Institute.
“Aviation’s fuel bill is only going one way, and the industry urgently needs alternatives that can scale commercially,” said Jonathan Pollock, the CEO of Elbow Beach. “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 preseed through to pilot.”
Meeting, growing with Cambridge Enterprise
Building on research from the University of Cambridge’s engineering department, co-founders Singh and Friederike Nintzel, the chief technology officer, met through Founders at the University of Cambridge programs and their drive to address the energy-security crisis and the climate impact of aviation led them to the START 3.0 cohort in May, culminating in Investor Day taking place at Google London.
“This raise is the culmination of six months of quiet, relentless execution,” said Winny Sanchita, Founders accelerator manager at the University of Cambridge. “While the round was coming together, Deepanshu kept deepening customer conversations and sharpening the long-term model for where this business is headed. Being an internal thinking partner for the team has been one of the real pleasures of the START cohort. Deepanshu and Rike are both quiet compounders—and if this is what six months builds, I’m genuinely excited to see where the next six take Neela Bio.”
