Cruz Foam’s chitin-based packaging brings in $18M as industries scramble to go green • TechCrunch


The best way to remove plastics from the ecosystem is to make sure they don’t get there in the first place, and Cruise foam It’s on its way to replacing some of its worst with its naturally-derived, compostable alternative — and the company just got an $18 million Series A to do it faster.

Cruz Foam produces chitin, which is what makes up the shells of most crustaceans, such as crabs, shrimp, lobsters, and many other land insects as well. It’s sturdy, stable, and completely biodegradable, and it’s plentiful: There are mountains of this stuff to get out of every seafood processing plant.

The company I met founder John Felts In Alaska through the accelerator at seaHe was navigating along various prototypes to convert chitin and some other natural ingredients into a material that could replace Expanded Polystyrene Foam (EPS; such as Styrofoam) and other common plastic packaging.

They got their first big break last year when Whirlpool Corporation used them to make a few pieces for their hardware boxes, and now that they’ve proven the idea, Cruz Foam is poised to break into half a dozen other industries.

“A lot of what we focus on is these first two areas – packaging that replaces polyethylene and polystyrene foam. But demand is growing in other ways: cold chain, CPG [consumer packaged goods]e-commerce, etc. People who ask about construction, or how we can do injection molding. “It’s exciting to see so much potential,” said Welts.

The need to prototype and test these possibilities is one of the reasons the company has been raising such a high-volume tour. They just bought a new extrusion machine (foam like this is mainly printed using specialized equipment) and they’ve been experimenting with all kinds of new form factors, propelled by partners and potential partners in many industries.

It helps that a number of laws and trends have steadily pushed companies towards environmentally friendly alternatives to plastic or even cardboard.

“When you return ownership and collection of waste to the people who produce the packaging, you see a broad change in ESG objectives,” he said. “It was like, ‘Okay, we’re going to be carbon neutral by 2030.’ Like, what does that mean? So we’re seeing real subtlety in what that means now — is it encapsulation, is it energy use, what are the milestones, the two-year, three-year markers Years? That’s how you know they’re serious.”

Cruz Foam enclosures for a piece of consumer electronics. Image credits: Cruise foam

Suddenly, it seems that everyone from manufacturers of goods to people who produce plastic foam are looking for full-stack alternatives, even if there is no cost parity. They see the writing on the wall, and the thought of not being prepared when the EPS ban for example kicks them out of West Coast markets is a scary one.

Welts said the company is in talks with several of the largest manufacturers of packaging foam, and is working with them on a deal that would have them actually make chitin-based materials and share the glory with Cruz Foam.

But the truth here is that neither side has much of a choice. Manufacturers need to prepare for a greener future, and the Cruz Foam doesn’t even have a fraction of the machinery it would need to meet demand. The Felts said they never intended to actually do the manufacturing.

“You literally can’t. It took 6 months to buy this repellent,” he said, and even that was a miracle. “Can you imagine expanding the business if it takes two years to get one machine? You You have to use the existing infrastructure.

Extruded foam strip. Image credits: Cruise foam

Regardless of who makes them, you’ll likely see more of their products soon. The company showed me some of the new prototypes and segments it was working on, although it couldn’t announce any of its new partners or customers until contracts or agreements were finalized, or in some cases until the required patents had been filed. Suffice it to say that the company is beyond just replacing the foam padding here and the molded shape there.

The products that Cruz Foam makes are generally compostable in the widely accepted sense—you can just throw them in your yard and they’ll be gone in a month or two (and they might give your plants a boost). But as it’s mated with cardboard and other materials, the company continues to take on the challenge of how to make these things mesh with existing municipal waste systems. Can it be recycled according to the Sacramento definition of the word? What about yard waste—is it technically breaking the law there, and does anyone care?

“The government needs to set standards for a new generation of compostable products — you have to make it a no-brainer for customers,” said Welts. At least even if it was placed in the wrong container, it would still deteriorate gracefully.

Helena’s $18 million funding round was led by the Global Problem Solving Organization, with participation from One Small Planet, Regeneration.VC, At One Ventures, and SoundWaves.

The money will go to expanding operations, as well as research and development.

“The biggest focus is commercial production and revenue generation, until next year,” he said. “We are filing tons of patents. Much of this company’s operational footprint is increased; we are moving to a new headquarters, which now houses up to 30 people.”

With Cruz Foam focusing on creative work and sales and working with existing manufacturers to actually make things, 2023 could be the year the company moves from one niche to the next. Watch your doorstep to get the brand CF (or as I prefer to see it, the tangled claws of a crustacean) on hand or during delivery.

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