Funding: Algenesis secures seed round for bioPU; Asahi Kasei invests in US start-up NFW involved in circular leather alternatives for auto interiors

Funding: Algenesis secures seed round for bioPU

Plant-based material science company Algenesis Corporation has raised US$5 million in a funding round led by First Bight Ventures, with Circulate Capital and others. A pioneer in developing bio-based plastics that are competitive with petroleum-based in both cost and functionality, Algenesis’ patented Soleic technology is said to be the world’s first renewable, fully biodegradable and backyard compostable bioPolyurethane (bioPU) made from plants and algae.

Today, 25 million tonnes of PU are manufactured annually (6% of total plastics) for extensive use across footwear, medical, and textile industries. Due to the material’s composition, PU is hard to recycle and primarily ends up in landfills or as microplastics in the environment. Unlike petroleum-based PU, Algenesis’ says its Soleic bioPU can biodegrade in compost within a matter of months and does not contain harmful PFAS chemical additives found in other plastics. Its production process further leads to up to 50% lower GHG emissions compared to petroleum PU.

Algenesis’ Soleic PU is currently available in soft foam applications, such as midsoles and insoles for footwear. The new funds will be used to expand Soleic product lines into breathable waterproof textiles, and injection moulded products such as phone cases.

The company also plans to expand and strengthen its supply chain by bringing more of its processes in-house, to scale production and commercialisation of these materials that are increasingly in demand by a variety of consumer-facing brands, further cementing their position as a leader in eco-innovation.

First Bight Ventures and Circulate Capital led the seed round; MIH Capital, Diamond Sports Group and RhinoShield also participated. The investment follows a US$5 million grant from the US. Department of Energy to scale up the production of biobased isocyanates from algae oils using a safe and green-flow chemistry process, as the company continues to work towards evolving their product to be 100% biobased.

“We invest in Industrial BioManufacturing and Algenesis is an excellent representation of new companies creating a highly demanded product, such as bioPU, that come from Biology versus Petroleum. This is a win for the industry, sustainability, and the world,” said First Bight Ventures Founder Veronica Wu.

Rob Kaplan, Founder and CEO of Circulate Capital, said: “We are thrilled to add Algenesis to Circulate Capital’s Disrupt portfolio, which targets breakthrough innovations advancing circularity. As global brands commit to driving circularity in their products, we see huge potential for Algenesis to meet this market opportunity with their innovative new materials.”

Based in Houston, Texas, First Bight Ventures is an early-stage fund dedicated to advancing and accelerating synthetic biology companies, while Circulate Capital is an environmental impact investor advancing the circular economy for plastics in high-growth markets – with activities and teams in 10+ countries.

In other news, Asahi Kasei has decided to invest in US-based startup NFW, a producer of non-petroleum-based leather alternative for car interiors. Terms were not disclosed.

As part of Asahi Kasei's medium-term growth strategy and in close cooperation with Sage Automotive Interiors, Inc. (Sage), an Asahi Kasei company and a provider of functional materials for the automotive interior, this strategic partnership enables another major step to support global automotive OEMs in reducing the environmental burden of automobiles, says the Japanese firm.

Based in Peoria, Illinois, NFW was founded in 2015 and has developed the only platform capable of producing precision-engineered, natural (non-petroleum-based) leather, foam, and textiles to replace animal and petrochemical-based materials. Certified by the US Department of Agriculture as having 100% biobased content, Mirum, the company's patented leather alternative, is made from natural rubber, natural fibres, plant oils, natural pigments, and minerals. The material is said to offer durability and quality that can replace traditional animal-based or synthetic leather products without the use of any polyurethane or other coatings.

Sage is engaged in developing, manufacturing, and selling innovative functional materials used in automobile interiors globally. Since its acquisition by Asahi Kasei in 2018, Sage has strengthened its business activities in Europe and China through mergers and acquisitions in parallel to expanding its lineup of growth-potential materials such as suede and synthetic leather. As one of the leading global suppliers in the car seat fabric market, Sage has a strong presence among automakers and suppliers, adds the company.

The cooperation with NFW is the first project within Asahi Kasei’s “Care for Earth” investment framework, announced in April 2023.

Asahi Kasei allocated up to US$100 million for investments worldwide in early-stage startups that aim to solve issues in environmental fields such as hydrogen, energy storage, carbon management, and bio-based chemicals over the 5-year period up to fiscal 2027.


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