Germany: EIB provides €35 million to Formo to expand production of cheese alternatives free from animal products

This article is published in association with United Nations.

• Berlin-based food tech company Formo develops fermentation processes to produce cheese alternatives.
• The €35 million EIB investment is backed by the European Union’s InvestEU guarantee.
• This venture debt loan brings Formo’s total financing to over €135 million.

The European Investment Bank (EIB) is providing a €35 million loan to German food tech company Formo. This EIB quasi-equity venture debt loan will enable Formo to further develop and scale up its fermentation processes for producing alternatives to dairy and egg-based products.

Founded in Berlin in 2019, the startup uses two similar technologies in its processes. The first is micro-fermentation, in which naturally occurring micro-organisms such as Formo’s Koji mushrooms are used to produce tasteless proteins without modifying the micro-organism itself. Koji proteins are excellent for producing cheese without using animal products.

Its pioneering work in precision fermentation has also enabled Formo to develop bioidentical milk proteins, particularly caseins with good melting properties. Traditional fermentation is combined with the latest synthetic biotechnologies to produce caseins efficiently and on an industrial scale. Formo is currently undergoing the approval process for marketing its second-generation (precision fermentation) products in the United States, and is also working towards conducting the relevant new food process in its European home market.

As a first step, Formo has already launched its micro-fermentation product line, with several flavours of the Frischhain product distributed via METRO and REWE supermarkets in Germany and Austria since September 2024. Other cheese alternatives (from Greek feta to white and blue cheese) and an egg substitute for scrambled eggs and baked goods are currently in the scaling process.

The initial target market for the products are consumers concerned about the impact of conventional food production on the environment, animal welfare and health. Formo’s products should eventually be everyone’s first choice, regardless of their specific diets and nutritional philosophies.

“Developing and scaling up the industrial production of fermentation-based foods is a highly innovative approach to meeting the growing demand for protein-rich dairy and egg substitutes that are free from animal products,” said EIB Vice-President Nicola Beer. “By working with Formo, the EIB is supporting innovative solutions for sustainable consumption while also backing a growth-stage European startup.”

“We are very pleased that the EIB is confident of the strength and scalability of our innovation,” said Formo’s founder Raffael Wohlgensinger. “We want to show that innovative European companies can move from smart ideas to scaling up and successfully marketing their technologies. We also know that fermentation processes will make a decisive contribution to the resilience of the European food system. This financing sends a strong signal across Europe and confirms our strategy.”

The EIB loan is supported by the InvestEU programme, which is expected to unlock €372 billion of additional investment in new technologies by 2027. The operation is also in line with the InvestEU objective of promoting research, development and innovation.

This agreement follows the $61 million in Series B funding that Formo secured in September 2024, bringing the company’s total financing to over €135 million. It is therefore in a good financial position for meeting its ambitious growth targets.

Background information

EIB

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.

The EIB Group, which also includes the European Investment Fund (EIF), signed a total of €88 billion in new financing for over 900 projects in 2023. These commitments are expected to mobilise around €320 billion in investment, supporting 400 000 companies and 5.4 million jobs.

Formo is an innovative fermentation startup that is rewriting the future of cheese. Founded in 2019 by Raffael Wohlgensinger and with locations in Berlin and Frankfurt, Formo uses state-of-the-art fermentation technologies to develop cheese alternatives that are free from animal products and can be enjoyed sustainably. Formo’s Koji protein-based cheese alternatives free from animal products have been commercially available in Germany and Austria since September 2024. More information is available at http://www.eatformo.com

The InvestEU programme provides the European Union with long-term funding by leveraging substantial private and public funds in support of a sustainable economy. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition. InvestEU brings EU financial instruments together under one roof, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners who invest in projects using the EU budget guarantee of €26.2 billion. This guarantee increases their risk-bearing capacity, thus mobilising at least €372 billion in additional investment.

EIB venture debt is a quasi-equity investment product suitable for early and growth-stage ventures, combining a long-term loan with an instrument linking the return to the performance of the company. The EIB has made venture debt investments totalling €6 billion since 2015, supporting more than 200 companies and completing over 50 exits. With the backing of InvestEU, the EIB aims to support European ventures and scale-ups in the clean tech, deep tech and life sciences sectors.