Australian packaging startup Earthodic has raised US$4 million (AUD$6 million) in an oversubscribed seed round, helping it increase production and build commercial partnerships in the American market.
Brisbane-based Earthodic is the creator of Biobarc, a water-resistant coating derived from bio-based materials.
Traditional coatings — think the water-resistant lining on a disposable coffee cup, or the wax coating on a meat tray — can be impossible to recycle, resulting in products that are mostly paper being sent to landfill.
The startup claims products using Biobarc coatings are much easier to recycle, without losing their water-resistant performance.
The investment was led by FTW Ventures, with first-time contributions from Circulate Capital, Queensland Investment Corporation, UniQuest Fund, Significant Capital Ventures, Branch Venture Group, RedStick Ventures, and American angel investors.
Tenacious Ventures, Investible and Closed Loop Partners, which contributed to Earthodic’s $1.85 million pre-seed round in 2023, also participated in the latest raise.
Speaking to SmartCompany, CEO and co-founder Anthony Musumeci said the funding will help Earthodic hire product and sales staff at home and in America.
It is also building a home base at Western Michigan University, a hub for innovation in the packaging sector.
“We’re pretty excited by that, because we’re starting to do quite a bit in terms of the supply chain and manufacturing production in the US,” says Musumeci.
As it stands, Earthodic and its third-party suppliers can produce the coatings in tonne-level batches.
But recent supply chain expansions mean it can now produce between twenty and forty tonnes a day.
The timing of the raise is “great, because it allows us essentially more ammunition and resources to do those activities,” says Musumeci.
The market for recyclable and compostable materials with water-resistant qualities is only expected to grow.
In the United States, single-use plastic directives and extended producer responsibility schemes are holding manufacturers responsible through the entire lifecycle of their products.
These policies are “really starting to accelerate some of their transition to more sustainable packaging, so we’re pretty excited to be kind of expanding operations there,” says Musumeci.
Earthodic says Biobarc-coated boxes are ready to replace wax-coated boxes commonly used to transport fresh produce and meat, which are completely unrecyclable.
Beyond top-down regulation, Musumeci says consumers are also demanding improved sustainability practices from the brands they love.
“That’s putting pressure back on the brands to have internal initiatives or objectives, where they’re transitioning more and more of their products and their impact to ensure it’s not detrimental,” he says.
Biobarc is not currently used in disposable coffee cups; Musumeci says Earthodic is currently focused on more industrial applications, but is working on consumer food and beverage certifications.
The startup claims Biobarc can be used in traditional manufacturing processes, saving packaging brands from expensive production line overhauls.
Some coating processes will require retrofitting or modification, the CEO continues, but “in terms of the industry we’ve been speaking to, they’re certainly very happy that they can just sub out petrochemical-based non-recyclable coatings and start to use ours”.
With plans in place to expand Biobarc production, Earthodic is considering even more use cases.
Lignin, a waste product from the paper manufacturing process and a key component of Biobarc, is brown; Musumeci says the venture is working on coloured variants that could be used in the high-end cosmetics sector.
Clear and white coatings are also on the cards, along with sticky versions capable of replacing the inorganic adhesives commonly used in corrugated cardboard products.
Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on LinkedIn.
Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
Comments