In our fight against plastic, biodegradable packaging startups have entered the market to offer sustainable alternatives. Biodegradable packaging closes the circular economy loop with materials that decompose naturally, reducing waste and environmental footprint. At Net Zero Insights, we’ve tracked investment into biodegradable packaging startups since 2015. According to our climate tech data, these six early-stage companies are gaining traction in 2024.
Xampla
Cambridge-based Xampla raised €6.4 million in January 2024 to make plastic pollution a thing of the past, bringing the total investment to $17.6 million. Investors included clean tech VC CIECH Ventures, Amadeus Capital Partners, Horizon Ventures, and others.
Xampla engineers natural biopolymers to replace plastic films, microcapsules, and coatings on common products such as dishwasher tablets and laundry pods. Its technology – a result of 15 years of research at Cambridge University – can be integrated into existing plastic manufacturing processes.
The fresh funding will be used to grow Xampla’s consumer brand Morro, which helps big brands like Gousto move away from single-use plastics with fully compostable and biodegradable packaging. Morro’s materials are completely chemical-free and produced from natural plant-based feedstocks, enabling a ‘perfect end of life’.
Cove
A new player attracting investor attention is California-based Cove – a company on a mission to re-engineer the world’s most polluting products. The company was founded by Alex Totterman in 2018, after discovering the difficulty of removing microplastics from water while working at a nanotechnology company focused on water purification. By using AI tools to create sustainable PHA biomaterials, Cove’s packaging is fully biodegradable and recyclable. Their product lineup includes biodegradable bottles, films, bags, pouches, containers, closures, thermoformed cups, and bespoke packaging solutions. Clove raised a $6.6M round led by Gracias Valor in 2023.
Cellugy
With the global cosmetic market booming, so does the demand for sustainable formulas. Today many personal care products contain carbon-intensive petrochemicals, something environmentally conscious consumers frown upon. Cellugy team of scientists has developed a cellulose-based solution harnessing bacteria and microorganisms to produce high-purity crystalline derived from the bioconversion of sugar. This is particularly attractive for cosmetic brands, since it’s easily scalable, and fits within standard recruitment and infrastructures. The solution matches the performance of traditional formulas but is bio-based and biodegradable. Cellugy’s bio-cellulose can also be used as a high-quality barrier coating in textiles and packaging. Cellugy was founded in Denmark and has raised $11.6M in total, including its most recent $5.3M seed round in May 2024.
Planet Protector
Cold chain logistics are essential for keeping goods like food, medicine, and chemicals chilled during transportation. However, the carbon footprint is high. Planet Protector woolpack protects products during cold chain transportation, reducing the need for transport refrigerants. Its range is made from 100% sheep waste wool and effectively absorbs moisture from the air to maintain stable temperatures. Woolpack outperforms both polystyrene and alternative packaging, making it an attractive alternative. The company was founded in Australia in 2015 and has already replaced over 8,500,000 polystyrene boxes. Planet Protector raised $3M in Dec 2013, bringing total funding from impact investors to $9.52M.
Paptic
Finland-based startup Paptic raised $4.9M in January to top up its $23M Series A round from investors including Emerald Technology Ventures, Sig Innoventures, Ub Figg, and the European Innovation Council.
Paptic’s bio-degradable fiber-based packaging outperforms paper in strength and has a smaller environmental impact than cotton – making it a great plastic alternative for e-commerce.
The round was led by private equity fund UB Forest Industry Green Growth Fund, bringing the total to €27.5M.
With environmental awareness rising and regulations tightening, the biodegradable packaging market is steadily growing. The market was valued at $88.52 billion in 2023 and is projected to reach $137.32 billion by 2032, fueled by consumer demand and corporate sustainability initiatives.
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