Sustainable startups get major funding boost from investors
American companies are predicting that there will be a shift toward climate-friendly brands over the coming years
As investors look for opportunities to grow their portfolios, many are betting on companies that provide sustainable alternatives to items that are damaging to the environment.
The top 20 startups in the sustainable packaging and materials space that have received the most funding, for example, collectively raked in more than $850 million, according to a recent report from Crunchbase.
Global investment management firm BlackRock recently emphasized its focus on sustainability, based on the assumption that investors will continue to demand more from the companies they put money into. In his annual letter, BlackRock CEO Larry Fink said his clients are looking to reinvest capital based on sustainable strategies.
“Investors are increasingly reckoning with these questions and recognizing that climate risk is investment risk,” Fink wrote. “They are seeking to understand both the physical risks associated with climate change as well as the ways that climate policy will impact prices, costs, and demand across the entire economy.”
Fink goes on to predict a “significant reallocation of capital” based on these values and the assessment of future climate risk.
Microsoft President Brad Smith predicted at the World Economic Forum in Davos, Switzerland, this week that taking on climate issues would become a main priority for American companies over the coming years.
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Meanwhile, it was reported in November that the largest landfill in China – designed to take in 2,500 tons of trash per day – was at capacity, 25 years early. The garbage site received about 10,000 tons of waste per day.
Chinese workers sort out and bury kitchen waste at the Jiangcungou Landfill, which is China's largest refuse landfill, in Xi'an city, northwest China's Shaanxi province, Aug. 21, 2019. (Imaginechina via AP Images)
So for investors with an eye toward the future, here’s a look at the top-funded companies in the sustainable packing and materials sector, as reported by Crunchbase:
Zume
Funding over past three years: $423 million
About the company: Zume is a company that aims to improve the food supply chain – helping companies connect with customers and reducing waste. It is a former pizza startup.
By using data to better connect the food supply chain with demand, Zume claims to create “planet-friendly alternatives to how food is grown, transported, prepared and packaged.” Its packaging is 100 percent compostable – even though it performs and feels like plastic.
Genomatica
Funding over the past three years: $220 million
About the company: Genomatica is a bioengineering company that develops microorganisms that use renewable feedstocks to make chemicals used to make sustainable everyday products. The company works with firms to give them the goods and services they need to produce more sustainable chemicals using its technologies. Some of Genomatica’s partners include Cargill, ExxonMobil and Aquafil.
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Tipa
Funding over the past three years: $46 million
About the company: TIPA creates compostable packaging solutions – with the goal that packaging should have the same “end-of-life as organic matter.”
RWDC Industries
Funding over the past three years: $35 million
About the company: RWDC Industries’ mission is to replace “petroleum-based, single-use plastics with safe, sustainable materials.” The company is based in Singapore and the U.S. It produces a naturally occurring biodegradable polymer that breaks down into carbon dioxide and water.
TemperPack
Funding over the past three years: $33 million
About the company: TemperPack specializes in designing custom solutions for clients in the perishable food and life sciences industries with thermal packaging technologies.