At the age of four, Luna Yu saw the snow-capped Jade Dragon Snow Mountain in her mother’s hometown of Yunnan. By the time she was eight years old, the snow was melting on the snowy mountains.
More than a decade later, Luna, who has seen firsthand that climate change is real, founded a startup in Canada called Genecis to try to do something for the environment.
Every year, the average Canadian throws away 170 kilograms of food, most of which ends up in landfills, where, in Luna’s opinion, it could have been turned into “gold”.
In short, Genecis is trying to turn food waste, or food waste, such as banana peels, coffee grounds, rice, vegetables, meat and grease into a plastic called polyhydroxybutyrate (PHA), which degrades in a year in the natural environment, eight months in the marine environment, and 6-8 weeks in the industrial environment, and is biocompatible, and can then be used to make heart valves, medical supplies such as dissolvable sutures, raw materials for 3D printing, and packaging for premium foods and toys.
As a cleantech startup, Genecis was selected for the YC Incubator, a top global incubator, and Luna herself was named to the MaRS Women in Cleantech Six list.
Making a heart valve out of a banana peel
PHAs have been around for several years, but for a long time, the raw materials used to produce them have often been crops such as sugar cane, corn, and canola oil, a practice that on the one hand is costly, three to four times more expensive than typical plastics (such as PET plastic and polypropylene plastic used in water bottles and yogurt containers), and on the other hand, these supposedly renewable agricultural resources are actually the source of one-third of the planet’s greenhouse gas emissions.
Genecis is designed to address both of these problems.
Its technology, which uses bacteria to break down food waste, can reduce the cost of producing PHA by up to 40 percent compared to typical methods and reduce greenhouse gas emissions from food waste. The methane gas produced when food waste is decomposed in an anaerobic environment is 20 times more potent a greenhouse gas than carbon dioxide, and landfills are the source of one-fifth of Canada’s methane.
“At a very young age, my grandparents taught me not to waste food because they are what farmers and producers put a lot of effort into producing,” Luna says. And Genecis’ technology can solve the problem of food waste. According to the United Nations Food and Agriculture Organization, one-third of the world’s food is wasted after production each year, which equates to 1.3 billion tons.
Abdul Khojaly, Genecis’ chief operating officer, told CanAm Finance that before entering the PHA market, they did some research on other players and found that the high production cost of PHAs was the biggest obstacle to their mass adoption, with forty to sixty percent of the cost coming from buying raw materials.
In Genecis’ lab, there is a bioreactor in which two groups of bacteria are cultivated. The first group of bacteria is responsible for digesting and breaking down food waste to produce fatty acids, which are added to the second group as “energy”, while the other group of bacteria “eats These fatty acids are added to the second group as “energy”, while the other group of bacteria “eats” the “fattened” carbon and turns it into cells that produce PHA. Finally, these cells are cracked by some substance such as bleach and PHA is purified. The whole process takes about a week.
There are many companies that want to “turn waste into treasure,” but few have succeeded. Hogarty said that in this field, in addition to the long period of technology development, building a treatment plant from scratch also requires a lot of time and money, and is also full of risks, and Genecis, as a start-up company, chose to cooperate with the existing facilities of large manufacturers to speed up the process of entering the market itself.
Our strategy for scaling up is not the same as other competitors in the industry,” Hogarty told reporters. “We work with existing organic waste managers, and we provide the technology that can be integrated into their facilities very quickly. In other words, Genecis works directly with waste recycling companies to help them upgrade their organic waste processes and licenses their own technology to these companies. This is their revenue model, which is estimated to reach commercial processing volumes in the next three years.
Genecis partnered with Sodexo, a food service management company, and Campbell’s Soup Company to run a pilot project at the latter’s Toronto facility. In six months, 1,430 kilograms of organic waste that would have gone to landfill was converted into plastic, offsetting 1,210 kilograms of CO2 emissions.
Hogarty told reporters that Genecis is still looking for more partners and hopes the latter can scale up to process more than 70,000 tons of food waste per year. After the pilot project, Genecis also worked with packaging printing company TC Transcontinental and medical company Novo Nordisk on the subsequent use of PHA, applying its production of PHA products in packaging printing, insulin injection pens and other areas.
Luna said Genecis has now received $55 million in purchase offers. Hogarty said the company just recorded $1 million in revenue and has $10 million in purchase orders.
After building a solid foundation in the North American market, Genecis intends to move into the larger market of China.
A “sour” entrepreneurial journey
Genecis’ lab is located in the Banting & Best Centre at the University of Toronto, a center built to encourage innovation and entrepreneurship.
Looking up, the yellow paint on the lab’s walls is splattered and falling off, and it smells like a bathroom that needs cleaning – a perfectly harmless mix of food waste and bacteria.
Still, the neighbors of the nearby startup couldn’t help but complain, and things only got better after the ventilation system was upgraded, though Luna and her pals would still slip the neighbors some chocolates now and then to show their appreciation.
The most exciting times were when they donned yellow protective suits and ground the food waste into a slurry, then strained the paste to make it smaller and thinner so that the bacteria could digest it more easily.
Luna came to Canada from China with her parents in 2002. Her mother is a wastewater treatment engineer who works for Environment Canada. In Grade 9, Luna followed her mother to her office and saw her working in a cubicle. Luna found it hard to imagine herself living like that for the rest of her life, and she even began to panic. At that moment, she planted the seed of entrepreneurship in her heart and took the initiative to gain more knowledge about business while she was in university.
Despite earning a master’s degree in environmental engineering from the University of Toronto, Luna has always positioned herself as an entrepreneur rather than a scientist. Before founding Genecis, she worked for a software company and then went on to a startup that converted restaurant food waste into biogas (a gas produced by breaking down organic waste, mainly methane and carbon dioxide, which can be used as an energy substitute). There she met many talented engineers, learned how to convert waste food into other materials, and saw first-hand how big a business it is to “turn food waste into treasure”.
While reading biogas-related research papers, Luna saw a market opportunity: there might be an economical way to produce biodegradable plastics from organic waste.
In contrast, the startup was using organic waste to produce biogas, the latter of which was time-consuming to produce and had a low profit margin – the wrong direction, she realized.
So Luna contacted Hasitha de Alwis, a Canadian immigrant from Sri Lanka and biochemist, who was quickly attracted to her idea because it addressed two issues he was already concerned about: reducing plastic pollution and food waste. When Hasitha first arrived in Canada, he was shocked by the amount of food waste in North America and saw that plastic had become something that was hard to discard.
So the two hit it off and founded Genecis in 2016.
Their first challenge was to find the right bacteria that could break down food waste.
They scoured Toronto’s municipal waste disposal facilities and finally found more than 200 new, undocumented bacteria. Lacking resources at first, they used rice cookers as bioreactors for their experiments.
After countless trials and errors, they finally locked down a mix of bacteria that could magically and quickly convert organic food waste into the biodegradable plastic PHA, which can be used for packaging, coffee capsules, and in 3D printing.
“We actually tried a lot of different biochemicals before targeting PHA, and finally found that PHA had the most market potential,” Luna said.
In fact, finding the bacteria that turns food waste into PHA took Luna and her team a full two years, and they are still optimizing the technology.
From a 3-liter rice cooker, to a 60-liter lab bioreactor, to a 240-liter pilot plant and a 3,000-liter demonstration project, Genecis’ team has gradually expanded from three to 15 members, and funding has come from initial prizes from various startup competitions, or some government-funded projects, to gradually attracting investors including YC Incubator, Celtic Asia Ventures, Liquid2 Ventures, and others.
Daniel Peng, innovation ecology manager of Celtic Asia Ventures, told reporters that when they first contacted Luna, she won the unanimous approval of the team with her maturity and stability beyond her age and her very strong pitching ability. After learning more about the series of achievements Genecis has made under her leadership, such as winning Sustainable Development Technology Canada, entering the YC incubator, and the strategic partnership with Sodexo, they finally made the decision to invest, and Genecis’ growth has since confirmed their initial judgment.
“Toronto is rich in talent in biotechnology, engineering and programming, and we are grateful to be in the midst of it, which makes it not very difficult for us as a startup to attract talent, and we have formed a team through our university network and various recommendations,” Hogarty told reporters.
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