This Japanese Startup Beat Out NASA to Create Affordable Bio Jet Fuel

There is far more to startups in Japan than SaaS software and IoT hardware companies.

Biotech startups are beginning to make a mark here.

Today we sit down and talk with biotech pioneer Mitsuru Izumo and talk about his ground-breaking work at Euglena. In many ways, the team at Euglena succeeded where even NASA failed. They have developed a process to cultivate this microorganism, also called Euglena, affordably and at industrial scale.

And Mitsuru and his team use using Euglena to create everything from inexpensive nutritional supplements to biological jet-fuel.

Mitsuru tells an amazing story of how he took his startup from inspiration to proof of concept, to IPO, and how the real innovation is just getting started.

I think you’ll really enjoy this one

Show Notes

Why the same organism can produce both food and fuel Why Euglena has been impossible to cultivate at industrial scale The world does not have a hunger problem; it has a nutrition problem How to move forward when no one believes in your vision How small companies can get to scale in Japan Why Japanese startups must IPO sooner than those in the West Why NASA gave up on Euglena, and why they were wrong

Links from the Founder

Learn about Euglena, the company Learn about the Euglena, the organism Follow Euglena on Facebook

[shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript Welcome to Disrupting Japan. Straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero, and thanks for joining me.

Today, we’re going to talk about slime. Well, actually no, not slime exactly we’ll be talking about algae. Well, actually, the biology nerds out there and I think it’s awesome if you are one, will point out that technically, we aren’t actually talking about algae but a unique organism called euglena, that has both animal and plant characteristics.

And we’ll also be talking about a unique company, also called Euglena, that is cultivating this organism at scale and turning it into everything from nutritional supplements to jet fuel.

In fact, in this episode, we drink our opening toast not with our usual Anchor Steam beer but with a glass of euglena. Now, I know what some of you are thinking and yes, university research labs and crowdfunding sites are packed with companies claiming that their pet organism is the key to solving a wide variety of mankind’s problems. But Euglena is not operating in a lab but commercially and at massive scale.

And today, we sit down with the founder and CEO, Mitsuru Izumo, who explains how he overcame initial market skepticism to get financial backing. How he was able to achieve what NASA could not. And how and why he decided to take his company public.

But you know, Mitsuru tells that story much better than I can. So let’s hear from our sponsor and get right to the interview.

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[Interview] Tim: Cheers.

Mitsuru: Yes. For starting. Cheers.

Tim: That’s pretty good. So, I’m sitting here with Mitsuru Izumo, the founder of Euglena. Thanks for sitting down with us today.

Mitsuru: Thank you for coming today.

Tim: I think most of our listeners are not familiar with Euglena, either the company or the organism. First, what is the organism?

Mitsuru: Euglena is a kind of tiny microorganism. You can’t see it directly. You have to see through microscope because the length is only 0.1 mm.

Tim: So that’s about the diameter of human hair?

Mitsuru: Yes. Exactly. Very similar to the human hair. Little bit smaller than the hair. Euglena is green colored microorganisms and euglena have a lot of chlorophyll. Euglena can do photosynthesis by capturing carbon dioxide to produce oxygen and carbohydrate.

Tim: Euglena, it’s a single cell organism. Is it a type of algae or is it its own unique type of organism?

Mitsuru: It’s difficult to answer. Euglena is a kind of algae, green colored and categorized as a plant. What makes euglena unique is that euglena is a kind of algae and at the same time, euglena can move by itself.

Tim: Okay.

Mitsuru: Euglena has both plant and animal characteristics. Euglena have both plant and animal genes. And Euglena can produce both plant and animal nutrition.

Tim: So it’s a difficult organism to classify. But if we think of it as kind of a single celled algae, we won’t be too far off?

Mitsuru: Mm-hmm.

Tim: What’s it good for?

Mitsuru: Euglena can produce plant, dietary fiber, fruits and vegetable vitamins, animal protein, dietary fatty acid. You can see in fish oil, every 59 types of nutrients, euglena can produce at one time.

Tim: So as a food supplement for people or as a standalone food?

Mitsuru: Yes. Standalone food. And it can be cultivated under the sunlight like normal plant. Every plants your see in nature have are very flexible so it’s difficult to be digested. Euglena can move by itself, doesn’t have [flexible] at all therefore the nutrition can be very easily be digested.

Tim: So far, the euglena company has been focused on applications in food and cosmetics primarily, right?

Mitsuru: Right.

Tim: But you’re researching a huge spectrum of applications as well, right?

Mitsuru: Right. So there are so many different strains of euglena, over 100 different types of euglena. There are 100 different types of euglena.

Tim: Okay. So it’s the euglena strains you use for food are completely different from the euglena strains you would use for fuels or for fiber.

Mitsuru: Exactly. So every day, I check and test many kind of euglena. And after the screening process, we cultivate special series of euglena.

Tim: A little while later, I want to dive deep into the specific applications that you’re working on and that other companies are working on around the world for this. But just to give me an idea of the scale, you’ve been in production for several years now. So annually, how much euglena are you producing?

Mitsuru: The last five years production is doubles every year. 2017, we can produce 100 tons of euglena in a year.

Tim: 100 tons per year?

Mitsuru: 100 tons as a dry powder.

Tim: And your major manufacturing facility is in Okinawa?

Mitsuru: In Okinawa. We have a major cultivation factory located in Okinawa, and the most southern part of Japan, Ishigaki Island.

Tim: Why did you choose Ishigaki and Okinawa?

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Mitsuru: Of course, we need a lot of sunlight. Carbon dioxide is everywhere but we need a lot of sunlight.

Tim: Okay. But theoretically, this could be cultivated almost anywhere?

Mitsuru: Yes, theoretically. But since 1980s, a lot of scientists in the United States and in Japan, they were very interested in the cultivation of euglena because euglena has wide range of nutrients. But it was absolutely impossible. Euglena has wide range of nutrients than every kind of bacteria, planktons, they love to eat euglena in nature. So it’s tremendously difficult to cultivate euglena purely and it’s impossible to prevent from biological contamination. They had set up special facility like green dome, you can see in the semiconductor factory to prevent from other biological contamination. But it’s very expensive and the production capacity was extremely limited.

Tim: So what did you do differently? How did you achieve production at scale?

Mitsuru: At the time, only 100 grams euglena can be cultivated in a year. This year, 2017, we cultivate 160 tons of euglena. The turning point is 2005. We invented the new cultivation liquid, preventing biological contamination. We don’t need expensive green dome or facilities.

Tim: Okay. So the broth or liquid allows the euglena to feed, to thrive but doesn’t allow the other bacteria and the other organisms that would eat it to grow there?

Mitsuru: Exactly.

Tim: You’ve been ramping up production almost doubling every year, is the doubling of production due to new technology developments or are you simply increasing the scale of your facilities?

Mitsuru: We simply expand the capacity of the cultivation or other facilities every year.

Tim: Okay. Before we get further into the technology and the applications, I want to back up a little bit and talk about you. Before you were mentioning that the whole inspiration for this project started on a trip you took to Bangladesh in your student days.

Mitsuru: Yes. When I was a student, 18 years old, the first grade in the University of Tokyo, I visited Bangladesh in 1998. Bangladesh was regarded as the poorest country in Southeast Asia. The visit was a very shocking experience for me. In Bangladesh, there were a huge amount of rice curry and rice, rice, rice. So many rice are there but the people couldn’t access fresh vegetables, egg, milk, fish, and meat.

Tim: So the problem wasn’t one of hunger. It was on one of nutrition?

Mitsuru: Yes. The problem was malnutrition. I came back to Japan and I decided to solve the malnutrition program in developing countries.

Tim: Okay. But you took a bit of a detour from there because before founding Euglena, you graduated from Todai. You went to work for Mitsubishi Bank. Why the detour into banking? That seems pretty far away from international aid and nutritional problems.

Mitsuru: It’s very simple. The lack if fund. It’s financial program. I didn’t have any reputation for solving the malnutrition program. Everyone couldn’t believe that euglena can solve the malnutrition program and the mass cultivation of euglena was regarded as impossible.

Tim: This is something I think so many new college grads are struggling with in Japan. Was your decision based on an inability to get funds?