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Cruz Foam’s chitin-based packaging raises $18 million as industries race to go green • londonbusinessblog.com

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The best way to remove plastic from the ecosystem is to make sure they never get there, and Cruz Foam is well on its way to replacing some of the worst out there with its naturally derived and compostable alternative — and the company just landed an $18 million Series A to do it faster.

Cruz Foam makes materials from chitin, which makes up the shells of most crustaceans, such as crabs, shrimps, lobsters and also many land insects. It’s strong, stable, completely biodegradable, and it’s plentiful: there are mountains of this stuff up for grabs outside any fish processing plant.

The company, whose founder, John Felts, whom I met in Alaska at the Accelerator at Sea, was humming along prototyping various ways to convert chitin and a few other natural ingredients into a material called expanded polystyrene foam (EPS; such as Styrofoam). ) can be replaced. ) and other common plastic packaging.

They got their first big break last year when Whirlpool urged them to make a few pieces for their appliance boxes, and now, after proving the idea, Cruz Foam is gearing up to break into half a dozen other industries.

“A lot of what we focus on are those first two areas – packaging replacing polyethylene and polystyrene foam. But demand is growing in other avenues: cold chain, CPG [consumer packaged goods], e-commerce, etc. People asking about construction, or how we can do injection molding. It’s exciting to see so much potential,” said Felts.

The need to prototype and test these capabilities is one of the reasons the company is ramping up such a significant round. They just bought a new extruder (like this foam is essentially printed with specialized equipment) and experimented with all sorts of new form factors, powered by partners and potential partners in many industries.

It helps that a number of laws and trends have steadily pushed companies towards eco-friendly alternatives to plastic or even cardboard.

“If you put the ownership of waste and collection back on the people who produce packaging, you see a broad shift in ESG goals,” he said. “It used to be: ‘Okay, we will be climate neutral by 2030.’ Like, what does that mean? So we see real granularity in what that means now – is it packaging, is it energy consumption, what are the milestones, the two-year, three-year brands? That’s how you know they’re serious.”

Cruz Foam housings for a piece of consumer electronics. Image Credits: Cruz Foam

Suddenly, it seems that everyone from goods manufacturers to people who produce plastic foam is looking for full-stack alternatives, even if there is no cost parity. They see the letters on the wall and the idea of ​​getting caught unprepared when a, say, EPS ban kicks them out of West Coast markets is scary.

Felts said the company is in talks with some of the largest packaging foam manufacturers and working with them on a deal where they will actually make chitin-based materials and share the glory with Cruz Foam.

However, the truth is that neither side has much choice. Manufacturers must prepare for a greener future, and Cruz Foam doesn’t even have a fraction of the machinery needed to meet demand. Felts said they never intended to actually do the production.

“You literally can’t. The purchase of this extruder took 6 months,” he said, and even that was a miracle. “Can you imagine a company if it took two years to get one machine? you to have to use the existing infrastructure.”

A ribbon of foam is extruded. Image Credits: Cruz Foam

Whoever makes it, you’ll probably see more of their products soon. The company showed me some prototypes and new verticals it was working on, although it can’t announce any of its new partners or customers until the contracts or agreements are finalized, or in some cases until the required patents are filed. Suffice it to say, the company goes way beyond just replacing a foam insert here and a molded mold there.

The products Cruz Foam makes are generally compostable in the most widely accepted sense – you could just throw them in your yard and they’ll be gone in a month or two (and maybe even give your plants a boost). But because it’s combined with cardboard and other materials, the company continues to face the challenge of connecting these things to existing municipal waste systems. Is it recyclable according to Sacramento’s definition of the word? What about yard waste – does it technically break the rule there, and does anyone care?

“The government needs to define standards for a new gene of compostable products — you need to make it a good idea for customers,” Felts said. Even if it ends up in the wrong trash, it still degrades gracefully.

The $18 million funding round was led by “global problem-solving organization” Helena, with participation from One Small Planet, Regeneration.VC, At One Ventures and SoundWaves.

The money goes to expanding activities and to R&D.

“Our main focus is on commercial production and monetization until next year,” he said. “We file tons of patents. A lot of growth in the operational footprint of this company; we are moving to a new headquarters, now up to 30 people.”

With Cruz Foam focusing on the creative and sales work and partnering with existing manufacturers to actually make the stuff, 2023 could be the year the company moves from niche to mainstream. Watch your door for the trademark CF (or as I prefer it, interlocking crustacean claws) on or in your delivery.

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