Consumers around the world are demanding more sustainable packaging, clothes, energy, food, and just about anything else available on the market today.
Rising awareness around climate change, corporate accountability, and policy support from governmental and international policy bodies all contribute to this movement.
In response, a new wave of companies are working to supply brands with renewable and sustainable materials that help maintain equilibrium between business and the environment and key natural resources.
Most of the players within the industry rely on biotechnology processes to produce these materials and have been enabled by recent R&D driven advances and resultant products and processes.
Several sustainable material companies, including Danimer Scientific, Zymergen, and Allbirds endured production delays and store closures due to the Covid-19 pandemic.
During April and May 2020, around USD 36.7 million in Paycheck Protection Program (PPP) loans were received by sustainable material firms, such as RWDC Industries, Newlight Technologies, MycoWorks, and Ecovative Design, to support payroll and other expenses during the pandemic.
Allbirds and Zymergen also supported healthcare workers and frontline staff by volunteering and donating during the pandemic’s early days.
We break down the sustainable materials industry into materials derived using bio-based and recycled sources. Within bio-based we looked at companies innovating new types of sustainable alternatives to leather, along with innovations in materials used in textile, packaging and industrial applications. The recycled materials segment includes companies that recycle used clothing, plastic waste, and food waste for materials to be used in textile, packaging, and other applications such as household items and building materials. Each segment represents a wide range of products given a broad diversity of materials and processes employed by competing firms. The segments involved in bio-based materials have the largest number of companies, the leather segment leads in terms of funding and the commercialization of products relative to other textile materials.
While the startups profiled in this report engage in a great variety of processes and inputs, there are some overlaps between businesses within the different bio-based material segments and even with the segments of recycled materials.
Within the bio-based leather market, the most highly-funded startups as of July 2021 are Bolt Threads, Modern Meadow, and Ecovative Design. These companies derive a form of vegan leathers from natural materials such as mycelium, algae, yeast, and other plant-based sources. Bolt Threads is also leading the bio-based textiles space in terms of the highest private funding. However, this segment also includes the listed disruptor Spinnova, and Allbirds—which reportedly filed for an initial public offering in June 2021 and is expected to go public by September 2021.
Regarding bio-based packaging materials, Origin Materials, Ecovative Design, and Anellotech are the most highly-funded startups. Origin Materials agreed to merge with a publicly-traded special purpose acquisition company (SPAC) in February 2021, a transaction that resulted in Origin Materials going public at a USD 1.8 billion valuation. This segment focuses on bioplastics and other biodegradable materials for packaging and single-use plastic applications.
The recycled materials segments include companies working to solve the global plastic pollution problem by producing recycled alternatives to plastic, textile materials and other materials with applications in household goods, building materials, and furnishing. Common inputs for companies in this space include clothing waste, plastic waste, and food waste.
Bolt Threads manufactures vegan “spider” silk and mycelium-based materials. Bolt Threads develops isolated silk proteins from proteins inspired by spider silk through a yeast fermentation process. The company’s Microsilk products are sold under its clothing brand, Best Made Co. The company has also developed another biomaterial using mushroom-based mycelium, an alternative leather product branded as Mylo, which is produced on a larger scale.
In September 2021, Bolt Threads announced its plans to produce Mylo on a commercial scale by the end of 2022 and expected to collaborate with mushroom farmers to heighten its mycelium crops.For its Microsilk product, Bolt had a production capacity of 32,000 sq ft per annum as of 2018. Since Microsilk remains significantly more expensive than traditional silk, the founders were seeking ways to scale up.
Key customers and partnerships
For its Microsilk product, Bolt Threads launched its first collaboration in 2017 with fashion designer Stella McCartney and introduced its second prototype in the form of a biodegradable tennis dress.
The leather alternative Mylo has been used in collaborations with Stella McCartney, Seattle-based leather bag manufacturer Chester Wallace, and Canadian athletic apparel retailer Lululemon. In October 2020, The Mylo Consortium was also formed including Adidas, Stella McCartney, Kering, and Lululemon, who collectively have made a seven-figure investment into Bolt Threads to produce Mylo. In return for their investments, these brands would have access to a large supply of the product.
Stella McCartney has been experimenting with Mylo to create clothing prototypes with plans to use the material in upcoming collections. Adidas used Mylo to produce high-performance footwear for the first time in April 2021 by making a vegan version of its “Stan Smith” sneaker design that dates back to 1965 and had plans to expand the use of Mylo material in its other products including handbags, wallets, shoes, jackets. In February 2022, Lululemon launched a Mylo-based yoga bag collection, which included a multipurpose yoga bag and a storage bag for workout gear. Mylo was also used by Danish luxury brand Ganni for the launch of its limited edition Mylo-based wallet range and one-of-a-kind saddle-bags in June 2022. Ganni’s partnership with Bolt Threads included plans to release more Mylo-based products in Q1 2023. With growing demand for its Mylo product, in February 2022, the company partnered with Mycelium Materials Europe (MME) for the commercial production of Mylo.
Funding and financials
The company’s last funding round was a USD 123 million Series D in January 2018 led by Baillie Gifford. The funds were used to commercialize the company’s Microsilk products.
Bio-based textile materials:
Bio-based packaging materials:
Industry incumbents cover a wide range of products and applications from fabrics, to shoes, cosmetics, and industrial uses. Some of these firms have also recognized the importance of having a sustainable partner or business embedded within their value chains.
The majority of these companies have entered the industry via acquisition of smaller companies focused on sustainability to gain more control over their own supply chains. Other major companies such as Adidas, Aquafil, and Foss have managed to develop sustainable material businesses in-house.
No investor data is available