Nutrition From Water Takes Equity Stake in PhycoFerm to Accelerate Microalgae Strain Development
Food tech startup Nutrition From Water has made an equity investment in Portugal’s PhycoFerm, formalising a joint R&D collaboration to accelerate microalgae strain generation.
New Zealand-Portuguese startup Nutrition From Water (NXW) is plunging further into the marine tech world with an investment in PhycoFerm, an Algarve-based biotech company specialising in microalgae strain development.
NXT has taken an equity stake in the latter to create a structured R&D collaboration and accelerate its biological asset strategy across its Generations I and II microalgae strains.
“We are excited about the partnership because it allows us to stay focused on our core strengths while contributing to the transition of microalgae-based ingredients into scalable, commercially viable platforms for next-generation ingredients,” said PhycoFerm COO Benjamin Schmid.
Nutrition From Water to seek superior microalgae strains with PhycoFerm
Founded in 2020 by Alex Worker, Harnish Howard, and Toby Lane, NXW uses unicellular organisms from aquatic environments to make sustainable proteins for B2B clients.
It harnesses multiple microalgae strains to produce Marine Whey (MW), its range of fibre-rich alternatives to dairy proteins, via proprietary heterotrophic fermentation and downstream processing. They cost a third of conventional whey, and have superior functionality to caseinate, enabling adoption across multiple applications, including dairy beverages, baked goods, sauces, and performance nutrition.
NXW currently sells four protein ingredient lines under the MW line. MW50 is a white, flavour-neutral sodium caseinate replacement with 50% protein, while MW70 has 70% protein and is ideal for protein fortification in advanced nutrition.
MWG35 has a golden colour (hence the name) and is a fibre-rich ingredient with 35% protein, best suited for baking applications. And MWB is a line of tailored blends for affordable nutrition use cases with 60% protein.
And earlier this year, NXW launched Marine Fiber 95, a 95% pure beta-glucan derived from microscopic algae. The highly bioactive soluble fibre supports immune activation, heart and metabolic health, and gut balance.
The firm’s approach features an ongoing iteration cycle across strain, process development, scale manufacturing and formulation, with a commercial-first, partnership-forward ethos.
PhycoFerm will contribute its advanced capabilities in strain improvement via classical random mutagenesis, adaptive laboratory evolution, and high-throughput screening, enabling NXW to identify variants with enhanced productivity, robustness, and targeted metabolic traits.
“This partnership reflects the core thesis in our playbook: to build a new category at scale and with a cost advantage, we need the right partners structurally connected across the value chain,” said NXW CEO Federico Duarte. “We see success coming from a coordinated cohort of allies doing what each one of them does best.”
Can microalgae fill the gap left by the whey shortage?
The collaboration deepends NXW/s roots in Algarve, which is home to world-class research infrastructure and a growing concentration of biotechnology expertise.
“The region has the science, the coastline, and now the companies to become a genuine hub for Europe’s blue bioeconomy,” says Hugo Barros, head of the University of Algarve’s entrepreneurship and technology transfer division.
“The partnership between PhycoFerm and NXW Nutrition from Water is exactly the kind of collaboration that reflects this momentum, bringing next-generation strain development to commercial scale in southern Portugal,” he added.
NXW partners with food and nutrition companies, with a focus on consolidated players in the dairy industry, who buy its ingredients as a strategic alternative to diversify their sources of proteins, fibres, and functional ingredients.
Its latest partnership comes amid instability in the whey protein market. Manufacturers are struggling to meet the sustained demand for high-protein food and drink products – in the US, contracts have been sold well into 2026, and some supplies are sold out for the rest of the year.
Whey prices broke records in 2025, and have kept on surging since. Over the last two years, the cost of whey protein concentrate has risen by 108%, and whey protein isolate has nearly doubled in price.
It has put animal-free alternatives that deliver the same functionality and protein digestibility firmly in the spotlight. Companies working with novel plant-based technologies, precision fermentation, or leaf protein extraction stand to win big here – as do microalgae-focused startups like NXW.
“We believe microalgae are the most efficient and nutritionally complete production organisms available to us today. They have the potential to reshape how the world makes protein and functional ingredients,” said Schmid.