New Zealand-Portuguese food technology startup Nutrition From Water (NXW) has announced a significant equity investment in Portugal’s PhycoFerm, a specialized microalgae biotechnology firm. This strategic partnership formalizes a joint research and development (R&D) collaboration aimed at rapidly enhancing the generation and optimization of microalgae strains, a critical component of NXW’s sustainable protein and ingredient portfolio. The move deepens NXW’s commitment to the burgeoning marine technology sector and signals a proactive approach to securing a competitive edge in the evolving global food ingredient market.
Founded in 2020 by Alex Worker, Harnish Howard, and Toby Lane, NXW is at the forefront of utilizing unicellular organisms from aquatic environments to produce sustainable protein solutions for business-to-business (B2B) clients. The company has pioneered the use of multiple microalgae strains in a proprietary heterotrophic fermentation process, coupled with advanced downstream processing, to create "Marine Whey" (MW). This innovative product line offers a sustainable and functional alternative to traditional dairy proteins, boasting a high fiber content and a cost advantage that positions it as a compelling substitute in a wide array of applications. NXW’s Marine Whey ingredients are priced at approximately one-third of conventional whey proteins and exhibit superior functionality compared to caseinates, making them adaptable for use in dairy beverages, baked goods, sauces, and performance nutrition products.
The current Marine Whey product range includes four distinct ingredient lines. MW50 is a neutral-flavored, white sodium caseinate replacement offering 50% protein content. MW70, with its higher 70% protein concentration, is specifically engineered for protein fortification in advanced nutritional formulations. MWG35, characterized by its distinctive golden hue, is a fiber-rich ingredient with 35% protein, ideally suited for baking applications. Completing the lineup is MWB, a series of tailored blends designed for cost-effective nutritional solutions, delivering 60% protein. In addition to its protein offerings, NXW launched Marine Fiber 95 earlier this year, a highly purified beta-glucan derived from microscopic algae. This potent soluble fiber, at 95% purity, is recognized for its significant bioactivity, supporting immune activation, cardiovascular and metabolic health, and promoting gut balance.
The investment in PhycoFerm represents a pivotal step in NXW’s biological asset strategy, particularly concerning its Generation I and II microalgae strains. By integrating PhycoFerm’s specialized expertise, NXW aims to accelerate the development of superior microalgae strains with enhanced productivity, resilience, and targeted metabolic characteristics. PhycoFerm brings to the table advanced capabilities in strain improvement, employing sophisticated techniques such as classical random mutagenesis, adaptive laboratory evolution, and high-throughput screening. These methods are crucial for identifying and cultivating microalgae variants that possess the optimal traits for large-scale commercial production and specific functional requirements.
Benjamin Schmid, Chief Operating Officer (COO) of PhycoFerm, expressed enthusiasm for the partnership, stating, "We are excited about the partnership because it allows us to stay focused on our core strengths while contributing to the transition of microalgae-based ingredients into scalable, commercially viable platforms for next-generation ingredients." This sentiment underscores PhycoFerm’s role as a specialized enabler within the broader food tech ecosystem, leveraging its R&D prowess to support the commercial ambitions of companies like NXW.
Federico Duarte, CEO of NXW, articulated the strategic rationale behind the collaboration, aligning it with the company’s foundational principles: "This partnership reflects the core thesis in our playbook: to build a new category at scale and with a cost advantage, we need the right partners structurally connected across the value chain. We see success coming from a coordinated cohort of allies doing what each one of them does best." This philosophy emphasizes the importance of synergistic relationships and specialized expertise in navigating the complexities of bringing novel food technologies to market.
The collaboration further strengthens NXW’s operational footprint and strategic ties within the Algarve region of Portugal. The Algarve is rapidly emerging as a hub for marine biotechnology, benefiting from world-class research infrastructure and a growing concentration of specialized companies. Hugo Barros, head of the entrepreneurship and technology transfer division at the University of Algarve, highlighted the region’s potential, stating, "The region has the science, the coastline, and now the companies to become a genuine hub for Europe’s blue bioeconomy. The partnership between PhycoFerm and NXW Nutrition from Water is exactly the kind of collaboration that reflects this momentum, bringing next-generation strain development to commercial scale in southern Portugal."
NXW’s business model centers on forging partnerships with established food and nutrition companies, particularly those within the dairy industry. These collaborations allow dairy manufacturers to diversify their protein, fiber, and functional ingredient sourcing by integrating NXW’s microalgae-derived ingredients as a strategic alternative. This approach not only offers innovative product development opportunities but also addresses increasing consumer demand for sustainable and novel protein sources.
The timing of this investment and collaboration is particularly relevant given the current volatility and scarcity in the global whey protein market. Manufacturers worldwide are grappling with unprecedented demand for high-protein food and beverage products, leading to significant supply chain disruptions. In the United States, for instance, whey protein contracts are reportedly being sold well into 2026, with some supplies already sold out for the remainder of the current year. Whey prices experienced record highs in 2025 and have continued their upward trajectory. Over the past two years, the cost of whey protein concentrate has surged by an estimated 108%, while whey protein isolate prices have nearly doubled. This market instability has amplified the spotlight on animal-free alternatives that can match the functionality and protein digestibility of traditional whey.
This environment presents a significant opportunity for companies leveraging alternative protein technologies, including plant-based solutions, precision fermentation, and leaf protein extraction. Microalgae-focused startups like NXW are particularly well-positioned to capitalize on this trend. The efficiency and nutritional completeness of microalgae are increasingly recognized as key advantages. As Benjamin Schmid of PhycoFerm noted, "We believe microalgae are the most efficient and nutritionally complete production organisms available to us today. They have the potential to reshape how the world makes protein and functional ingredients." This belief is not merely aspirational; it is backed by scientific evidence demonstrating the rapid growth rates, minimal land and water requirements, and rich nutritional profiles of various microalgae species. For example, certain strains of Chlorella can produce up to 10 times more protein per hectare than soybeans and significantly more than traditional animal agriculture.
The ongoing iteration cycle at NXW, which encompasses strain development, process optimization, scale manufacturing, and formulation, is driven by a commercial-first, partnership-forward ethos. This systematic approach ensures that advancements in R&D are directly translated into market-ready solutions. The integration of PhycoFerm’s advanced strain engineering capabilities will be instrumental in this process, enabling NXW to further refine its biological assets and unlock new functionalities and efficiencies. The company’s commitment to innovation is evident in its continuous pursuit of novel strains and product applications, aiming to provide versatile and sustainable ingredients that meet the evolving demands of the food industry.
The strategic partnership between NXW and PhycoFerm is poised to accelerate the development and commercialization of next-generation microalgae-based ingredients. By combining NXW’s expertise in fermentation, downstream processing, and market application with PhycoFerm’s advanced strain development capabilities, the collaboration aims to unlock the full potential of microalgae as a sustainable and highly nutritious food ingredient source. This venture not only bolsters NXW’s competitive position but also contributes to the growth of Portugal’s blue bioeconomy and the broader global shift towards more sustainable food systems. The company’s focus on building scalable, cost-effective platforms underscores its ambition to become a leading provider of alternative proteins and functional ingredients derived from the ocean’s untapped potential.
