CruzFoam makes $18M as chitin-based packaging industry scrambles to go green • TechCrunch

The best way to get plastics out of the ecosystem is to make sure they don’t get there in the first place, and Cruise Foam is well positioned to replace some of the bad ones with a naturally-derived, biodegradable alternative. The company has just landed an $18M Series A round to get it up and running.

Cruisefoam creates materials derived from chitin, which is the shell of most crustaceans such as crabs, shrimp, lobsters and many land insects. It’s strong, stable, completely biodegradable, and boy is it versatile, there are mountains of this stuff to take out every seafood processing plant.

The company’s founder, John Felts, whom I met at the Marine Accelerator in Alaska, is modeling different ways to turn chitin and a few other natural substances into polystyrene foam (EPS, like Styrofoam) and other materials. Common plastic packaging.

They got their first big break last year when Whirlpool tapped them to make a few pieces for their tool boxes, and now if the concept proves right, Cruise Foam is gearing up to enter half a dozen more industries.

We focus a lot on these two first areas – packaging that replaces polyethylene and polystyrene foam. But interest is growing in other ways: cold chain, CPG [consumer packaged goods], ecommerce, etc. People asking about construction or how we do injection molding. It’s exciting to see so much potential,” Fels said.

The need to capture and test these opportunities is one of the reasons the company raised a round of this size. They just bought a new extruder (such foam is mainly printed using special equipment) and have been testing all kinds of new forms driven by partners and partners in many industries.

A number of laws and trends are helping companies push for more eco-friendly alternatives to plastic and even cardboard.

“You’re seeing a big shift in ESG goals by putting the ownership and collection of waste on the people who produce the packages,” he said. It was, “Okay, we’ll be carbon neutral by 2030.” Like, what does that mean? So now we’re seeing a real grain of what that means — is it packaging, is it energy use, what are the benchmarks, the two-year, three-year benchmarks? That’s how you know they’re serious.”

Cruze Foam is a piece of consumer electronics.

Suddenly, everyone from commodity producers to plastic foam manufacturers seem to be looking for full-stack options, even if there is no cost parity. They see the writing on the wall, and the thought of being caught unprepared when the ban on EPS drives them out of West Coast markets is terrifying.

Felts said the company is in talks with several large packaging foam manufacturers, partnering with them to develop chitin-based materials and sharing the glory with Cruz Foam.

But the reality is that neither party has much of a choice. Manufacturers must prepare for a greener future, and Cruze Foam lacks even a fraction of the machinery needed to meet demand. Felts said they never intended to do the production properly.

“Of course you can’t. It took 6 months to buy this exterior,” he said, and even that was a miracle. Can you imagine expanding your business if it took you two years to get one machine? you they have To use the deployed infrastructure.

A strip of foam will come out.

Whoever makes it, you’ll probably be seeing more of their products soon. The company showed me some prototypes and new fixtures, although it can’t announce any new partners or customers until the contracts or agreements are finalized or sometimes the necessary patents are obtained. Suffice to say, the company is going well beyond simply replacing foam inserts and moldings here.

CruzFoam’s products are generally accepted as biodegradable, you can throw them in your yard and they’ll be gone in a month or two (and they can give your plants a boost). But because it is being combined with cardboard and other materials, the company continues to face challenges in how to integrate these materials into existing municipal waste systems. Can it be recycled according to Sacramento’s definition of the term? What about yard waste – does it technically break the rules there and who cares?

According to Felts, “The government should define the standards for new gen fertilizer products – you have to make it inconvenient for customers. At least if it goes into the wrong tank, it still degrades gracefully.”

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

The money will go towards expansion operations as well as R&D.

“The biggest focus is commercial production and revenue generation until next year,” he said. “We are filing a lot of patents. The footprint of this company is growing a lot; We are now moving about 30 people to a new headquarters.

With CruzFoam focusing on its innovation and sales efforts and working with existing manufacturers to get its products right, 2023 could be the year the company goes mainstream. Look for the trademark CF (or as I prefer to see it, interlocking crustacean claws) on the door or in your delivery.

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