SAN FRANCISCO — Food technology company Yali Bio has raised $3.9 million in seed funding led by Essential Capital.

Founded in 2021, Yali Bio is developing technology to create fats designed to enhance flavor and texture in plant-based meat alternatives. The startup uses synthetic biology, deep learning and genomics tools to produce fats that are more sustainable and functional than coconut oil and other oils commonly used in plant-based formulations, according to the company. Using precision fermentation, Yali Bio is creating plant-based fats that emulate animal fats and are tailored to various applications.

“Yali Bio is one of the first companies tackling the issue of plant-based fats through precision fermentation,” said Edward Shenderovich, managing partner at Essential Capital. “We believe there is a substantial market opportunity for better functioning fats with a smaller environmental footprint, and we are thrilled to be working with Yali Bio to bring their solutions to bear.”

The seed funding will enable Yali Bio to expand its research and development, operations and product and business development capacity. To date, Yali Bio has raised a total of $5 million. Investors participating in the recent round include Third Kind Capital, S2G Ventures, CRCM Ventures, FTW Ventures and First-in Ventures. Stephanie Sher and John Goldsmith participated as angel investors.

“High-quality fats are currently a major weak point when developing plant-based analogs for animal proteins,” said Chuck Templeton, managing partner at S2G Ventures. “We are excited to invest into Yali Bio to improve this crucial component of plant-based products with the goal of enhancing the consumer experience while reducing the impacts of conventional animal husbandry.”