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HomeTechnologyCruz Foam’s shell-based Styrofoam various brings in $3.4M seed with DiCaprio and...

Cruz Foam’s shell-based Styrofoam various brings in $3.4M seed with DiCaprio and Kutcher – TechCrunch

Plastic foam like Styrofoam is a ubiquitous, dangerous, and almost immortal single-use materials that’s lengthy overdue for a very good, inexperienced alternative — and Cruz Foam is right here to produce it. The startup creates a sturdy but backyard-compostable packing foam out of  shrimp shells produced (and discarded) by the seafood business. It just lately prolonged its seed spherical to accommodate the pursuits of Leonardo DiCaprio and Ashton Kutcher, and is scaling as much as meet the calls for of its first main buyer, Whirlpool.

I met Cruz Foam co-founder John Felts throughout the memorable Accelerator at Sea hosted by the Sustainable Ocean Alliance. His pitch made good sense: create a biodegradable various to expanded polystyrene (EPS) foam utilizing a cloth supplied in abundance by nature.

This materials, chitin, makes up the shells of shrimp, crabs, and different crustaceans out and in of the ocean. It’s powerful and versatile however, like several a part of a dwelling creature, decomposes shortly and safely. Better of all, it’s produced in monumental portions by the seafood business — there are actually nearly no makes use of for the stuff, so 1000’s of tons of shells pile up outdoors shrimp processing crops, most of which finally ends up going to landfills. Persons are actually paying another person to take these things.

Named for the town the place it began, Santa Cruz, Cruz Foam’s innovation is a patented course of for this surplus chitin the place shells go in a single finish and out the opposite comes a light-weight, sturdy sheet of froth with lots of the most fascinating features of EPS. It could actually basically be swapped in one-for-one with the widespread petroleum-based packing materials, molded and reduce to virtually any form. (And in case you’re questioning, no, it doesn’t odor like outdated shrimp.)

“You mix chitin with some starches and low grade fibers, it’s all bio-based,” mentioned Felts; the corporate elaborated in an e mail that fungi, hemp, recycled paper and different sources additionally play a job. “When you threw these things in your backyard, it will be gone in lower than a month.” (Or extra; the pace differs relying on moisture and temperature, like common compost.)

A block of Cruz Foam (left) after two days in moist soil; EPS is on the best (and it’ll most likely appear to be that for a couple of hundred years).

Early on, the startup experimented with every kind of formulations, discovering that the froth could possibly be tuned to satisfy numerous necessities for form, rigidity, and so forth. “We haven’t discovered a restrict to what we are able to do with this foam,” mentioned Felts. “Nevertheless it’s not nearly how we are able to produce this cheaply — it’s a few product that may match into the ecosystem, all these current processes, and in addition finish of life. We don’t need to introduce supplies which can be simply gonna be one other drawback.”

The corporate saved the lights on for the interval after I met them with an SBIR award from the NSF, with the Part I and II awards yielding greater than $2 million in non-dilutive cash to work with.

I feared when Felts pitched his firm again on the boat that technical innovation merely wouldn’t be sufficient to get their foot within the door in an business as enormous and conventional as packaging. Luckily the group understood it wanted to seek out niches the place it might appeal to vital company curiosity whereas holding R&D prices down. They quickly came upon everyone seems to be quietly looking out for one thing higher, and current inexperienced alternate options haven’t panned out.

Whereas EPS is, like many plastic merchandise, almost unattainable to beat when it comes to efficiency and business inertia, the tide is popping towards the class because the pervasive air pollution it results in is repeatedly pushed house by researchers. The current revelation that virtually each animal on the planet has microplastics in its bloodstream and organs most likely comes as no shock to anybody in ecology, however it’s one in all a number of now inescapable public realities which have corporations operating to spend money on inexperienced alternate options to their most wasteful habits and provide chain hyperlinks. EPS is poisonous each ecologically and reputationally, however the subsequent neatest thing is thrice the worth; Cruz Foam can slip in with an choice that’s not wildly costlier, however is as inexperienced because it will get.

Cruz Foam R&D director Juan Bravo watches a ribbon of froth be extruded.

From prototypes to multi-million shipments

Whirlpool is a kind of corporations that has traditionally relied on Styrofoam and different plastic packaging merchandise, however in recent times has been making an attempt to reform itself with a pledge to go totally renewable.

The Whirlpool all-renewable packaging with the foot bits by Cruz Foam.

“We as a maker of tens of thousands and thousands of merchandise a yr are in search of to go above and past to remove using non-recyclable and single-use plastics as a result of it’s the proper factor to do,” mentioned Ron Voglewede, Whirlpool’s International Sustainability Director. “Elimination of Styrofoam for big, heavy home equipment could be very troublesome and any failures in a ultimate product leads to a large loss in embedded carbon if broken in transit. We search innovation from all over the place and we all know typically the latest concepts don’t essentially come from the incumbents within the business.”

Whirlpool labored with Cruz Foam to place collectively a substitute for one of many final remaining items of EPS utilized in its equipment packaging, a set of little molded ft that assist immobilize and cushion issues like stoves within the containers they’re shipped in. It’s one of many types that Cruz Foam can simply make (not like, say, molded meals containers — definitely potential however wants particular equipment) and Whirlpool wants thousands and thousands of the issues. Abruptly this shell-based foam went from promising experiment to main transport product.

Felts mentioned they’re in talks with quite a few different corporations to supply related items — the agreements aren’t public, however main producers of TVs, meals and drinks, even automobiles and components are on the road. “It’s been nonstop. We’ve needed to beat folks away,” Felts mentioned.

Local weather-focused stars signal on

Regardless of a couple of false begins in writing about Cruz Foam, I saved involved with them as a result of it felt like they had been perpetually within the “we’re about to” part, with enormous potential quickly to be realized — however COVID and different realities of non-software startup intervened (as an illustration, they want manufacturing house and logistics companions all around the nation — not precisely one of the best time to set that up). However now with the maturity of the method, an business able to pay a premium for inexperienced alternate options, and an actual stay order for thousands and thousands of items, the corporate appears able to explode into prominence.

I’m not the one one to suppose so, as Cruz Foam has already acquired about $5M in capital on prime of the $2M in SBIR grants. The most recent revision of the seed spherical put it at $3.375M, whereas that spherical in late 2021 was valued at $2.5M. The spherical was prolonged as a way to embody movie stars Leonardo DiCaprio and Ashton Kutcher’s (by way of SOUNDWaves) investments; elementary math places the distinction at $875K, however no additional particulars had been disclosed about their stakes. Each will be part of as advisors.

Kutcher has been an lively and concerned investor for a couple of years and has talked about his strategy on stage at TechCrunch Disrupt. DiCaprio is newer on the VC scene however has lengthy been concerned in social and local weather advocacy. I wasn’t in a position to get both of the brand new high-profile traders on the cellphone (one thing about being busy), however they included statements within the press launch.

DiCaprio: “Cruz Foam is taking a serious step in lowering the environmental affect of the provision chain business. The mission to remove single use plastics within the ongoing battle for a cleaner and extra sustainable setting makes me excited to hitch as an investor and advisor and I look ahead to what we’ll obtain collectively.”

Kutcher: “We see enormous potential within the adoption of Cruz Foam’s client packaging because the business strikes away from petroleum-based merchandise and in direction of new biomaterial applied sciences.”

The sooner seed traders included Tom Chi’s At One Ventures (he additionally met Felts in Alaska), the Sustainable Ocean Alliance, the Sony Innovation Fund, and Regeneration.VC. It’s price noting that DiCaprio can also be an investor and advisor with Regeneration.VC however they each invested independently right here, and his place as advisor with Cruz Foam is likewise separate.

Chitin King

Cruz Foam enclosures for a piece of consumer electronics.

Cruz Foam enclosures for a chunk of client electronics.

Cruz Foam’s ambition is to maneuver past EPS alternative and leverage the flexibility of this materials to turn into a serious supplies innovation firm, Felts advised me.

In one in all our conversations, I had urged that the corporate’s future was not merely as a foam maker, as transformative as that could possibly be for a lot of the business, however as a sort of “Chitin King,” spinning shrimp into gold.

“That made me suppose — we began with foam however there’s in our opinion lots of alternative for this materials past that,” he mentioned. “We’ve checked out injection molding, adhesives, and so on… We’d like to be a tech innovation firm that’s spinning off chitin functions. We need to create new applied sciences round new forms of supplies that we are able to deploy into industries, be it automotive, building, client items.”

There’s not more likely to be any scarcity of uncooked materials any time quickly, both. Even when the shrimp reserves began operating low, new insect-based protein and feed corporations have an identical drawback.

“I’ve been contacted by 3, 4, 5 insect corporations which can be like, we have now nothing to do with these rubbish luggage filled with useless bugs,” Felts mentioned. Not a name most individuals would return, however this can be a particular case.

Although the potential is there, a stumbling block is regulation. Not that the federal government doesn’t need this sort of inexperienced innovation to occur, however regulatory buildings round composting and assortment at scale aren’t actually ready for it. There’s yard waste, meals waste, “industrially compostable” objects, secure for landfill, and dozens of different labels and regulatory schemes for dealing with all this completely different waste.

As Felts mentioned, you may throw it in your backyard and it will decompose in a month or two — however not everybody has a backyard, and even when they did, they won’t need decomposing sheets of chitin in it. And if the corporate and materials is to scale, it wants to suit inside one of many waste classes already on the market – and that’s a protracted means of negotiation with metropolis, state, and personal authorities.

“The top of life, recycling, and so on infrastructure is so convoluted; it’s a complete different dialog. What’s required is lots of business standardization in how this stuff are messaged. If folks see like 5 completely different labels they don’t learn them, they only throw it away,” he defined. Not that that’s a tragedy with such eminently compostable supplies, however the brand new inexperienced, round economic system must construct on this stuff from the bottom up. “We simply need folks to know that there are supplies like Cruz Foam on the market — some sort of labeling that claims, compost at house within the inexperienced bin, throw it within the yard waste. It needs to be easy.”

That’s all within the medium time period for an organization simply now getting its legs below it, nonetheless, and making an attempt to meet its first large order in order that it might begin answering the demand of the opposite corporations banging on its door. However Cruz Foam has a long run plan and expects to lift cash once more very quickly, maybe as quickly as summer time, to get began on the following part of its shrimp-to-gold alchemy.



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