Origin Story Interview W/ Philipp Arbter, Colipi

Origin Story Interview W/ Philipp Arbter, Colipi

Brighter Future

 / 

Sep 27, 2023

#BrighterFuture #entrepreneurship #Sustainability #ClimateChangeSolution #originstoryseries #seekthechange #alternativeoils #sustainablesolutions #fermentation #yeast #palmoilalternatives #cocoabutteralternatives #sheabutteralternative #CircularEconomy #CarbonNeutral #BioEconomy

Brighter Future

We’re here with Philipp Arbter, co-founder of Colipi. His company uses yeast and fermentation to produce sustainable alternatives to oils like palm oil and cocoa butter.

Please tell us a little about yourself and the company you co-founded, Colipi.

I am Philipp Arbter, and I co-founded a company called Colipi, which is a spin-off of the Technical University in Hamburg. We specialise in reproducing different types of oils as a sustainable replacement for oils sourced from agricultural resources, such as palm oil, cocoa butter, and shea butter. We are currently developing two fermentation processes, one to produce lipids by yeast and the other to feed bacteria directly with carbon dioxide. We aim to offer a more sustainable alternative to oils from agricultural resources and prevent deforestation.

As for my background, I was born in Northwestern Germany, went to school there, and then moved to Berlin. I initially studied biology for a semester before switching to biochemical engineering. I did my bachelor's thesis in Louisiana, the United States, where I first became interested in the potential of yeast to produce fats. After completing my master's degree in Munich, I pursued a PhD at the Technical University in Hamburg, focusing on merging electrochemical and biological systems.

During my PhD, I remained fascinated by the potential of producing lipids by yeast and published a paper on the topic. Then, in 2020, I applied for a special program to transfer academic research into commercialisation. I was fortunate to have three co-founders: Max Webers, Tyll Utesch, and Jonas Heuer, who joined me in the program. Max is the business guy and CEO of Colipi, Tyll Utesch specialises in developing and solving technological problems, and Jonas focuses on downstream and has expertise in the cosmetic industry.

After initially being turned down for funding, we produced small prototypes of our carbon-neutral oil and received positive feedback from prospective customers. With this proof of concept, we finally secured funding for our company. Since November of last year, we have worked on the project full-time.

Have you had a smooth journey so far?

Even with the little setbacks, everything has been going well. Of course, communicating optimistically is always important, especially from a science background where you see all the potential problems. However, the problems you're working on now are more on the engineering side, and most of them can be solved with time and money. Surprisingly, many companies, even in the cosmetics industry, weren't aware of the technology you're working on.

Where did your motivation for working on climate change come from? Did it develop through your work, or was there a spark earlier in your life?

I developed my interest in geography while I was in high school. Geography is a fascinating science because it provides insights into the different factors that drive the world, including economics and other sciences. Understanding these factors helps us identify the main challenges, and it has become clear that global warming is our main challenge.

I have always wanted to do something that contributes to establishing a circular economy and is sustainable. However, I must admit that this is not a unique desire, as many people want to improve the world. There are many ways to contribute to sustainability, not just through entrepreneurship but also in our private lives. The leverage we have in our private lives may be even greater.

Technology has always fascinated me, driving me to start my company, Colipi. I am particularly interested in using fermenters and microbes in biotech and biochemical engineering. While there is a lot of great research in this field, only a few technologies have made it to the commercialisation and industrial level. In addition to contributing to sustainability, this motivates me, as I want to see this technology reach its full potential and be used to develop more sustainable practices.

Other startups in this field may be motivated by the need to solve the problem of feeding the world sustainably, which is becoming increasingly difficult. First, however, we must consider whether bioproduction is more sustainable than traditional agriculture. For example, while palm oil and other tropical oils have a high carbon footprint and can destroy unique land, producing microbial oil by fermentation is beneficial.

But is it still beneficial when we have local alternatives like sunflower oil? Again, this is a question that needs to be addressed as we make the transition to new technologies and practices.

You seem to enjoy being challenged by technology and the current economic landscape. When did you discover your entrepreneurial side? Did you always know you wanted to have your own business, or did the idea become tangible at a certain point?

I remember when I was studying for my master's degree in Munich with my colleague Max. I focused on engineering and science, while he concentrated on business. Our university strongly encouraged all students to incorporate their companies, so we often discussed various business ideas. However, many of these ideas were already being pursued by other students, and I didn't want to start a company just to make money. Instead, I wanted to create something that could truly make a difference.

After I finished my PhD, I began thinking more seriously about how I could contribute to the transfer of technology from academia to industry. Many chemical companies could have done this, but for various reasons like costs, for example, they hadn't. As an entrepreneur, I saw an opportunity to bring this technology to the market and make a real impact. I knew there would be external factors and influences that I couldn't control, but I was determined to do everything I could to push the technology towards success.

How did you come up with the name Colipi?

That's a great question, especially for English speakers, as we've just realised it may be problematic. When we applied for the program to transfer technology from academia to industry, we needed to choose a name for our product, which produces carbon-neutral lipids. So we combined CO2 and lipids and looked to German for inspiration, where the hummingbird is Colibri. We then used the bird as our logo, and after some brainstorming, we came up with the name Colipi. We removed the “2” from CO2 because it would have been confusing in general use. Unfortunately for English speakers, the bird's name in this context is German, whereas it has a different name in other languages like French or Spanish. In English, it's known as the hummingbird.

Is the animal related to preservation, the ecosystem, or climate change? Is it a representation or just a word?

It's a bit of both. We kept it because it's a small bird with a lot of energy, even though it would waste a lot of energy. It fits well with our desire to preserve tropical forests. However, that wasn't our main motivation. We had the idea, the German word for it, and everything else fell into place.

With whom are you mostly communicating using Colipi?

Although this may change, we only plan to remain a business-to-business-focused company. This is because, when it comes to different oils or lipids, they are typically high in the supply chain, with big chemical companies or specialised companies acting as providers. The end customers are usually cosmetic or food companies that use these products. We operate within this range, but we always work closely with the companies that directly contact the end customers during product development because we provide the oil. However, as I mentioned earlier, how the oil is processed after fermentation, how it is controlled, and precision fermentation are all closely tied to the product in which it will be used. We see an opportunity and an advantage in this because, compared to plant oils, we can play with parameters more and have another option, but it will remain B2B. We speak with many cosmetic, food, and even biofuel companies, covering the entire range of companies that use oils from plant resources. The primary focus for the next few years will be on the cosmetic industry because it has the lowest regulatory barriers and the greatest potential for the oil we produce to enter the market.

That’s very interesting. What do you find to be the most fulfilling aspect of your work?

In a startup environment with only four of us, we all have different roles, but each is responsible for a little bit of everything. The most rewarding part of my work is when I conduct experiments or one of my students conducts an experiment, and we achieve positive results. This indicates that we are progressing towards providing carbon-neutral oils as an alternative to traditional plant oils. Even though progress is made in small steps, every success brings us closer to scaling up and achieving our vision.

Reflecting on the past year, I'm proud of our progress so far. Of course, there have been mistakes, but we've learned from them and continued to work towards our goal. When people express interest in our technology and encourage us to keep going, it provides a sense of fulfilment that motivates us to work even harder. Ultimately, knowing that our work has the potential to make a positive impact on the world is what drives us forward, even during long hours of hard work.

What have been the biggest challenges faced so far with Colipi?

The biggest challenges, of course, were the initial obstacles. Firstly, I was telling a story that had previously failed, and unfortunately, we could not incorporate it before that particular program began. As a result, we could not raise any funds from other investors. As a result, Jonas and I had to work for a long time without any payment. Initially, it was difficult to get things up and to run and receive feedback that made us feel like people didn't believe in us. However, we persisted, and every day we went back into the lab and restarted the process. It was also challenging to receive feedback and not become too angry. It took some time to accept it, work on improvements, and look at the last year to see what went well and what did not. It was important to adapt and sometimes to admit when we had made mistakes and learn from them. I had to reflect on situations and think about what we could have done differently. It takes courage to do this, but it is important for development and improvement.

What would you say were the biggest lessons learned from the past year?

The most significant lesson we learned is that within our team, only four people are responsible for identifying the bottlenecks in our development process. Even though some team members perform well, we must rigorously understand where the bottleneck lies and work to solve it, enabling us to work as effectively as possible. The bottleneck for us is the lack of funds to scale up quickly despite receiving funding. This budget was planned for the project, and we did not expect to scale up so quickly. However, some potential customers are demanding that we do so. We do not have any money for scaling, but we are trying to close our second round at the beginning of next year. This lack of funds is slowing us down as we cannot approach CDMOs, or contract and development manufacturing organisations, to use their equipment and optimise our process. If we had known earlier that feedback would be so immense at the start of our development, we would have collected the money earlier and been six months faster. Thus, the main takeaway is that we should have focused more on getting external funding earlier to scale up more quickly.

Have you had any major “Aha!” moments or epiphanies in your life, not just in your career, that have shaped you as an entrepreneur?

I wouldn't say that I was raised as an entrepreneur, but I always had a strong work ethic. I have three sisters and am one of triplets, and we grew up with our mother. While there wasn't always enough time to be as organised as it would have been with fewer children, we learned to be responsible from a young age. These experiences taught me valuable organisational skills that I still use today as an entrepreneur.

Looking back, I also had the advantage of receiving a good education. Although my parents had certain expectations, they ultimately allowed me to choose my path. I studied biology but didn't have a passion for basic research on flowers or animals. Instead, I saw an opportunity to impact more through industrial biotechnology.

My “Aha!” moment came later when I realised the extent of the influence I could have as an entrepreneur. If I had pursued a PhD and gone to work for a mid or large-scale chemical company, I would have been limited by a slower pace and the demands of shareholders.

Throughout your entrepreneurial journey, or even before that, who or what has inspired you the most as a business person?

This is a challenging question. Although Max, our CEO, could probably give you a long list of his inspirations, I have to be honest and say that I listen to a variety of podcasts that discuss current market situations and invite different founders, but I can't point to one particular person as a role model. It may also be because there are some well-known founders, such as those in the IT industry. Still, it isn't easy to compare them to startup founders in the field of biochemical engineering or bioeconomy, which is still developing. While some founders successfully combine new technologies with sustainability, finding someone who embodies these qualities is still challenging.

If I had to think about it, though, the story of Uğur Şahin does come to mind as very inspirational. He's the CEO of BioNTech. He and his wife achieved production of the BioNTech COVID-19 vaccine within an unbelievably short period of time by making practical and wise decisions— while managing a team of world-class scientists and engineers, on top of that. We cannot perfectly compare our work to the work done by BioNTech, but this is nonetheless a really great example of how basic research was translated into a huge societal and economic success by excellent execution and world-class expertise in science and technology.

What was the biggest compromise or sacrifice you had to make to get where you are today?

When you follow a certain idea, you sometimes must stick to the topic, slowing you down. Others may pursue different degrees or opportunities, like getting a better job or travelling to new places. In my case, the compromise was having to exclude certain scientific motivations and instead focus on developing a process that works at a large scale. This required investing time and money and understanding that pragmatic compromises had to be made to ensure success.

What do you think Colipi’s future looks like?

In the short term, we plan to sell our first oils to the cosmetic industry. These oils will have additional benefits, such as vitamins and antioxidants, which are not yet carbon neutral. In the long term, we aim to produce several tens of kilotons of microbial oil that is carbon neutral, which will help prevent deforestation and create a company culture where people are happy to work. In addition, we want to ensure that the technology is affordable to a broad range of people rather than being just a niche product. Ultimately, we hope to positively impact society by commercialising this technology on a large scale.

We also aim to foster a company culture where employees are happy to come to work. This includes providing great technology, caring for our people, and accommodating suitable work models. We want everyone to wake up in the morning and say, "I work at Colipi, great!" It should be a great place to work.

What future do you hope to create with Colipi?

In the long term, our goal is to have large fermenter capacities, producing tens of kilotons of microbial oil that's carbon neutral. By doing so, we can contribute to stopping deforestation and preventing the destruction of new rainforest. The larger meaning and value for society lie in our ability to commercialise this technology on a large scale and at affordable prices.

Have you considered collaborating with other companies, and if so, who would you choose?

Collaborations and partnerships are essential when considering technology and scaling, especially in our field. There are certain chemical companies that I would love to have closer collaborations with, and it would also be beneficial to communicate more with competitors. There would be room for collaboration if the global oleaginous startups would communicate more with one another. While I have some companies in mind, I prefer not to mention them. However, we were surprised by the positive feedback from the companies that make products for end customers. They were interested in a partnership or collaboration, but our startup is limited by the number of employees we have. We always wish to do more, but our lack of manpower has been the bottleneck.

On the other hand, there was no shortage of offerings for this type of partnership, and some companies want more sustainable products in the market but cannot buy them at higher prices due to the risk of bankruptcy. I am hopeful that collaborations will continue to evolve in this regard. Furthermore, I am happy to maintain connections with academic groups, which can provide great research and technology that can be implemented in our process through licensing fees. This would be another collaboration area that we would be pleased to engage in.

Do you have any advice for young entrepreneurs who are just starting out or even people who are considering starting a business?

Certain requirements should always be met before starting a company. Firstly, having a solid understanding of your chosen topic and being genuinely passionate about it is important. Secondly, you should be prepared to dedicate significant time and effort to your business, even your entire life. Without this level of commitment, success may be difficult to achieve.

If investors reject you or encounter setbacks, it's important not to be discouraged and to continue working on your business. It would help if you tried to maintain contact with these investors and others who can provide valuable feedback, as there may be a second chance for your business. If you truly believe in what you are doing, keep pushing forward and try to understand why something was unsuccessful so that you can learn from your mistakes and make changes to improve your business.

However, it's important to strike a balance and not be too stubborn in your approach. Instead, listen to feedback from others with valuable insights and try to adapt accordingly. This way, you can constantly improve and grow your business while keeping sight of your overall vision and goal. It's like having a feedback loop or a scrum mindset, where you learn from feedback and use it to improve continuously.

How do you personally prepare yourself mentally for setbacks?

Well, first and foremost, you have to accept them without getting angry. The best course of action is to reach out to the people responsible for the setback, try to understand their perspective and engage in discussion with your team. Ask questions such as: Was it okay? What happened? Did we create the right impression?

Mentally, I don't believe in preparing myself because, for instance, rejection can come at anytime when talking to investors. Sometimes it may take a week or even longer. However, you must always be aware that setbacks can happen. This doesn't mean you should give up on the project completely. On the contrary, stopping after one or more rejections may signal you are not on the right path. Instead, focus on other areas of growth and potential success.

If one message could reach everyone in this world, what would it be?

The message could be to encourage everyone to consider the current state of our world and the major challenges we face, such as global warming. Many people are aware of this issue, and they can make a positive impact. Some individuals already make efforts in their private lives by avoiding certain products, not flying, or not eating meat. However, others can contribute to the fight against global warming by utilising their education and qualifications, such as scientists or engineers from Colipi. It's important not to be afraid to try new things, as even if it takes some time, it's worth it to say you tried. The message is for everyone to be aware of the problem and to try their best to reduce carbon dioxide emissions.

Thank you very much for sharing some of your time and story with us. We hope your mission to produce cultivated oil goes further than you ever imagined possible.

If you’d like to learn a little more about Colipi, please see www.colipi.com.

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