From Forest Industry Byproduct to High Technology – LignoSphere Closes Pre-Seed Funding Round

PRESS RELEASE

Espoo, 20.5.2026

Kiilto Ventures and Stephen Industries invest in an Aalto University-originated lignin technology company aiming to disrupt the coatings and adhesives market for industry and construction.

Finnish biomaterials company LignoSphere has secured Pre-Seed funding, with Kiilto Ventures and Stephen Industries as lead investors. The investment significantly accelerates the development of LignoSphere's wood-based biomaterial commercial applications and lays the groundwork for scaling industrial production in the near future.

LignoSphere coating on metal surface

Can you finally make money from lignin?

For decades, the forest industry has repeated the saying that you can make anything from lignin except money. That saying is now finally beginning to crack. Lignin is a promising raw material, but its chemical complexity has long stood in the way of end products. LignoSphere's technology solves this challenge by transforming lignin's structure into uniform spheres — more precisely, colloidal lignin particles that, unlike raw lignin, perform excellently as a key component in numerous chemical compounds.

Lignin is an abundant byproduct of the forest industry: the world's pulp mills produce approximately 50 million tonnes of lignin annually, of which over 95% is burned for heat. LignoSphere transforms this underutilized biomass into high-value functional materials, with value creation potentially exceeding ten times that of burned lignin per kilogram.

The company's patented process and applications were developed at Aalto University and Hämeenlinna University of Applied Sciences. The technology enables energy-efficient production of lignin spheres in a closed loop and delivers end products with a significantly lower carbon footprint — at a price that is at least competitive with fossil-based alternatives.

Replacing harmful epoxies – a 100% bio-based alternative

LignoSphere's lignin sphere-based coatings and adhesives offer a sustainable alternative to widely used fossil-based products. LignoSphere-based coating and adhesive materials bond excellently to metal, concrete, and wood, with highly promising performance in adhesion, wear resistance, and corrosion protection. Adhesive applications have been tested to very high shear strengths (over 10 N/mm²), making them a competitive option in engineered wood products such as glulam manufacturing. End users do not need to significantly change their existing processes — the product behaves like conventional epoxies.

Next steps

With this funding, LignoSphere will accelerate its technology development, expand collaboration with industrial partners and customers, and prepare for the construction of an industrial-scale production facility. The company's goal is to position lignin-based materials as a credible mainstream alternative to fossil-based chemicals in the global coatings and adhesives markets.

About the investors

Kiilto Ventures is the venture capital arm of Kiilto. Kiilto is a Finnish family-owned company with over a century of history, developing, manufacturing, and selling chemical industry solutions across four business areas: construction, industrial adhesives and fire protection, professional hygiene, and consumer products. Kiilto operates in nine countries and employs nearly 800 people in total. In 2025, the group's revenue was €217 million.

Stephen Industries is a Finnish family-owned investment company that primarily invests in startup and scaleup companies operating in Finland and across Europe. At the core of the company’s investment strategy are innovative greentech, deeptech, and healthtech companies that contribute to sustainable development and help build a better future. 

Both investors bring deep industry expertise that contributes more than capital to LignoSphere's development: networks, market access, and an understanding of the requirements of the chemical industry.

For more information:

LignoSphere Oy — www.lignosphere.fi

Eero Knuutila, toimitusjohtaja

eero.knuutila@lignosphere.com

Tel. +358 40 839 3899

Kiilto Ventures — www.kiiltoventures.com

Matti Rönkkö, toimitusjohtaja

matti.ronkko@kiilto.com

Stephen Industries Inc Oy— www.stephenindustries.com

Tor-Oskar Karlberg, Investment Director

tor-oskar.karlberg@stephenindustries.com

LignoSphere is a Finnish biomaterials company developing high-value coatings and adhesives from lignin-based nanospheres. The company's patented technology was developed at Aalto University and Hämeenlinna University of Applied Sciences. LignoSphere is headquartered in Espoo, Finland.

The LignoSphere Team

Alexander Henn to win The Young Researchers Challenge 2022 of Marcus Wallenberg Foundation

Doctoral candidate Alexander Henn from Aalto University was awarded as the winner in the Young Researchers Challenge 2022 for his research on lignin. The jury as well as the other participating researchers considered his 3MT presentation to be the best of all 30 candidates.

The annual Marcus Wallenberg Prize is very well known in the field of forest based industries. It aims to promote and support scientific research and sustainable use of the forest resources. To encourage young researchers on this path the foundation also organizes yearly the Young Researchers’ Challenge to stimulate collaboration, inspire research and create networking opportunities. The challenge brings together brilliant scientists in their early career and enables them to reflect on the impact of their research on the industry but also on the socie

Alexander has been studying lignin use in Professor Monika Österberg group at the Department of bioproducts and biosystems. He has a clear vision of the potential of lignin and has been in a central role in developing the LignoSphere technology and lignin based bioproducts. His participation in the challenge was sponsored by the Finnish Forest Products Engineers association.

The International Marcus Wallenberg Prize 2022 was also awarded to research conducted in Finland. This year, the award ceremony was held for the 38th time, and the prize was awarded to Professors Herbert Sixta from the Aalto University and Ilkka Kilpeläinen from the University of Helsinki for their extensive research into the development and use of ionic liquids in the production of sustainable cellulose-based textile fibres.

https://www.mwp.org

Alexander Henns 3MT presentation for The Young Researchers' Challenge 2022:

https://www.youtube.com/watch?v=lb0dBaqq3c0

Bio-based coating from wood

Researchers turn a non-toxic residue into wood coating that resists abrasion, stain, and sunlight.

Due to the global efforts to meet sustainability standards, many countries are currently looking to replace concrete with wood in buildings. France, for example, will require that all new public buildings will be made from at least 50 percent wood or other sustainable materials starting in 2022.

Because wood is prone to degradation when exposed to sunlight and moisture, protective coatings can help bring wood into wider use. Researchers at Aalto University have used lignin, a natural polymer abundant in wood and other plant sources, to create a safe, low-cost and high-performing coating for use in construction. “Our new coating has great potential to protect wood. It’s more water repellent than a lot of commercial coatings because it retains the natural structure of wood and its micro-scaled roughness. Since it’s hydrophobic, the coating is also quite resistant to stains, while lignin’s inherent structure resists colour changes from sunlight. It also does an excellent job of retaining wood’s breathability,” explains Alexander Henn, doctoral candidate at Aalto University, The School of Chemical Engineering.

“Our new coating has great potential to protect wood. It’s more water repellent than a lot of commercial coatings because it retains the natural structure of wood and its micro-scaled roughness”

From waste to value

Lignin is often regarded as a waste product of pulping and biorefinery processes. Each year, about 60-120 million tonnes of lignin is isolated worldwide, of which 98 percent is incinerated for energy recovery. Lignin has several beneficial properties; however, the poor solubility of most lignin types and the mediocre performance of lignin-based products have so far limited its commercial applications. ‘Lignin as a coating material is actually very promising with its many benefits compared to the synthetic and bio-based coatings currently used. It has excellent anti-corrosion, anti-bacterial, anti-icing, and UV-shielding properties. Our future research will concentrate on developing characteristics like elasticity of the coating’, says Monika Österberg, Head of the Department of Bioproducts and Biosystems at Aalto University.

Environment, health and safety

Currently, widely used mechanically protective coatings for materials such as wood, concrete, metals, and composites are petroleum-based, which include substances that are harmful for the environment. Vegetable-oil coatings — like those made from tall, linseed, coconut, soybean, and castor — can be more sustainable alternatives but they often lack durability. As a result, these oils are often combined with synthetic materials to improve their performance.

More sustainable and non-toxic alternatives can help the coating industry meet new safety regulations. For example, the amount of volatile organic compounds (VOCs) has been regulated not only due to their impact on health but also on the ozone layer. Similarly, the European Union (EU) has placed restrictions on some chemicals used by the coating industry, such as bisphenol A and formaldehyde (used in epoxy and polyurethane coatings), and recently classified titanium dioxide — one of the most widely used pigments in paints — as a class II carcinogen.

https://vimeo.com/597287421

Further information:

An article Colloidal Lignin Particles and Epoxies for Bio-Based, Durable, and Multiresistant Nanostructured Coatings published in ACS Applied Materials & Interfaces on 15 July 2021.

Writer Virpi Raski works as a Communication Manager at Aalto University The School of Chemical Engineering.

Published previously: https://www.bioeconomy.fi/meet-the-scientists-of-the-future-bioeconomy-part-6-bio-based-coating-for-wood/