Arzeda Leverages AI to Innovate Protein Design for Natural Sweeteners and Beyond

Artificial Intelligence (AI) is revolutionizing the field of protein design, which involves developing unique proteins with specific characteristics tailored for various applications. This innovative approach holds immense potential, particularly in discovering drug-based therapies to address diseases and in creating sustainable products for homecare, agriculture, and food industries.

One notable player in AI-driven protein design is Arzeda, a company founded in 2009 by researchers from the University of Washington’s Baker Lab. After nearly a decade of self-funding, the founders—Alexandre Zanghellini, Daniela Grabs, Eric Althoff, and David Baker—sought to bring Arzeda’s protein design platform to the market by attracting external venture capital investment.

“It’s challenging to transition from laboratory success to commercial viability in industrial biotech, and many firms have stumbled along the way,” said Zanghellini, the CEO of Arzeda. “Our ability to raise capital in such tough fundraising conditions is a testament to our progress, especially as many competitors face closure.”

Zanghellini explains that Arzeda's technology integrates “biophysics-informed” AI models with generative AI techniques, utilizing large language and diffusion models. The company has developed a proprietary dataset of protein sequences and structures to train these models effectively.

While many biotech firms focus on biomedical applications, Arzeda aims to redesign chemical-intensive products, utilizing alternative and environmentally friendly AI-designed proteins and enzymes. Its initial offering is a natural stevia-based sweetener for a partner brand, with future products including laundry detergents for Unilever and biodegradable materials developed in collaboration with W. L. Gore.

In addition to designing proteins and enzymes, Arzeda also manages their validation and manufacturing. It generates revenue not only from direct sales but also from joint products developed with industry partners.

“We’ve established filters grounded in structural biology and biophysics to optimize designs before they enter experimental phases,” Zanghellini noted. “Every design undergoes experimental validation to eliminate inaccuracies.”

This approach has proven effective, with Zanghellini revealing that the 70-employee company is now generating revenue. Besides Unilever and Gore, Arzeda also serves clients like AAK, a confectionery fats enterprise, and the Department of Defense. Although details about the Defense Department collaboration remain scarce, Zanghellini remarked that it has yielded "very promising results" and generated substantial interest.

Arzeda's growth trajectory facilitated a recent $38 million oversubscribed funding round led by Sofinnova Partners, with contributions from Fall Line Capital, Sucden Ventures, Silver Blue, Gore’s corporate venture team, Continental Grain Company, Bunge Ventures, and Lewis & Clark AgriFood. Zanghellini shared that this round brings Arzeda’s total funding to $83 million, which will advance the production of its natural sweetener and support the commercialization of other enzymes in its portfolio.

“Our investor syndicate includes leading names in industrial and agrifood biotech, providing the expertise, network, and financial backing essential for Arzeda’s growth,” Zanghellini stated. “The combination of this recent equity round and our revenue momentum gives us a strong runway and a clear path toward achieving 'corporate-EBITDA-positive' status.”