Arkeon, A Startup Turning CO2 Into Protein, Files for Insolvency

Austrian biotech firm Arkeon, known for its gas fermentation technology to make proteins from air, has filed for insolvency.

Vienna-based gas fermentation firm Arkeon has filed for insolvency, a marker of the investment and financial challenges facing the alternative protein sector.

The startup upcycled carbon into amino acids, helping industries decarbonise while producing valuable proteins that aren’t a threat to the planet.

In a LinkedIn post this week, co-founder and CEO Gregor Tegl confirmed that the firm had formally filed for insolvency. “While this is a difficult moment, I am incredibly grateful for everyone who believed in our vision for sustainable protein production via gas fermentation,” he wrote.

An expensive technology with high investment needs

Gas fermentation involves feeding microbes on gases like carbon dioxide instead of sugars to produce high-value ingredients, such as fuels, proteins, and chemicals.

Arkeon, founded in 2021 by Tegl, Simon Rittmann and Günther Bochmann, lowered the excess levels of CO2 in the atmosphere by capturing the gas from industrial emissions. It converted the gas into food using archaea, microorganisms said to be highly efficient and capable of producing viable and variable proteins.

The microbial fermentation results in the secretion of all 20 proteinogenic amino acids to power what the company described as “carbon-negative, clean-label functional ingredients”.

The process eschews the need for agriculture, land or animals, reduces waste gases, decarbonises heavy industries, and can play a part in tackling food security. That said, the technology, equipment and raw materials aren’t cheap, and the process isn’t easy to scale.

Arkeon opened a pilot plant in Seestadt in July 2023, and has secured more than $13M from investors including Square One Foods, Synthesis Capital, ICL, and ReGen Ventures. But this is a fraction of the capital raised by other companies turning gases into food or feed.

For example, Air Protein (a spinoff of California’s Kiverdi) has attracted $107M to date, Calysta has brought in around $172M, NovoNutrients has secured $27M, and Finland’s Solar Foods has received $79M (with additional government funding for its facilities).

Most of this capital was raised before 2023, when money was cheaper and investors more interested in alternative protein technologies. The sector suffered from a 44% dip in funding in 2023, followed by a further 27% fall last year. Investment in the overall climate tech sector also declined by 38% in 2024, as venture capitalists flocked to artificial intelligence instead.

Alternative protein businesses in a whirlwind

These challenges have hit future food companies hard. Over the last year, seafood burger company Akua, plant-based startup Sunfed Meats, vegan cheesemaker Willicroft, cultivated meat firm SciFi Foods, and animal-free heme maker Motif Foodworks have all ceased operations.

Fermentation player Mycorena, meanwhile, filed for bankruptcy before being rescued by Naplasol, and plant-based ready meal maker Allplants sold off its assets to Grubby and the founders of Deliciously Ella. Mark Cuban-backed vegan pet food startup Wild Earth has also filed for bankruptcy.

Mycelium meat leader Meati, meanwhile, last month filed documents suggesting that it’s set to be sold for $4M weeks after a bank unexpectedly swept most of its cash reserves due to a technical default. The firm has raised $450M to date and was valued at $650M in 2022.

Even giants like Beyond Meat and Oatly have struggled. The former suffered a “disappointing” Q1 where sales slipped by 9%, shortly after it suspended its operations in China (it did receive a $100M loan to help wipe off its debt). The latter shut its Singapore factory in late 2024 after a few years of turbulence.

And last week, the co-founder of French plant-based meat maker Swap stepped down as CEO after the company reportedly posted a turnover of just €1M ($1.1M) in 2024. It is now being helmed by former Mondelēz and Pierre Martinet executive Hervé Salomon, who would need to spearhead its efforts to raise €9M ($10.2M) by year-end, and nearly €30M ($34.1M) by the end of 2026.

All of this to say, it isn’t easy being a future food founder or company in 2025. Still, Arkeon’s Tegl remains optimistic. “Although Arkeon’s journey has come to an end, my belief in the potential of sustainable biotechnologies remains as strong as ever,” he said.

“Every failure teaches us something new, and the lessons we’ve learned about scaling our technology, engaging with stakeholders, and navigating regulatory landscapes will stay with me as I move forward.”