Neela Biotech Raises £2.1 Million Pre-Seed Round to Scale AI-Driven Waste-to-SAF Technology
Why It MattersThe deal reflects growing investor interest in cheaper, biogas-infrastructure-based SAF routes as airlines face rising fuel costs and supply disruption pressure.
Cambridge-based biotech start-up Neela Biotech has raised £2.1 million in pre-seed funding to advance its AI-guided microbial process that converts food, agricultural and forestry waste into sustainable aviation fuel, the company announced on 8 October 2026. The round was led by UK climate-focused seed investor Elbow Beach, which contributed £1.5 million, with additional participation from Ascension, Cambridge Enterprise, Ventures Together and strategic angel investors. The funding will take the technology from laboratory stage to a pilot-scale trial at a biogas plant over the next two years.
Neela's proprietary Controlled Microbial Upcycling process uses anaerobic digestion, already deployed at scale in European biogas plants, to convert waste streams into fatty acids, a precursor for HEFA-based SAF. Around 95% of SAF produced today uses the HEFA method, which currently costs roughly 1.5 times standard jet fuel, while newer e-SAF methods can cost up to ten times more; Neela says its approach offers a path to cost parity with fossil jet fuel at scale. By deploying into existing biogas infrastructure rather than building new facilities, the company aims to cut capital expenditure and energy intensity compared with conventional thermochemical SAF production, while giving UK biogas plant operators a new revenue stream as government subsidies wind down.
The company cited supply pressures facing aviation in 2026, including disruption to roughly one-fifth of global oil supply following the closure of the Strait of Hormuz, and a global airline industry fuel bill rising by an estimated $98 billion this year; the UK currently imports more than half its jet fuel from the Middle East. Neela Biotech is part of the IAG innovation programme and has received grant funding from Innovate UK and the Henry Royce Institute.
Elbow Beach CEO Jonathan Pollock said the firm was convinced to lead the round by the combination of capital efficiency and genuine potential for commercial deployment. Neela Biotech CEO Deepanshu Singh said the raise would help scale towards a pilot and move the company closer to making locally produced SAF cost-competitive with fossil fuel. Neela Biotech was co-founded by Singh and Friederike.
