Chemical StartUps Series #22: Ecovia Renewables
Please introduce the value proposition of your company. How will your company disrupt or dramatically change how things are currently done?
Ecovia Renewables Inc. was founded with a goal to reduce the accumulation of waste and toxic substances in our environment by providing customers uncompromising biobased alternatives to petroleum-based polymers. We deploy our proprietary and patented bioprocesses to produce high-performing, multi-functional Ecovia Biopolymer products, termed AzuraBase? and AzuraGel?, for use in personal care, beauty, food, agricultural, and industrial products and formulations. Our fermentation-based process utilizes 100% renewable feedstocks like glucose or glycerol to efficiently produce Ecovia Biopolymer ingredients and materials. Our newest prototype materials can compete with water-soluble or water-absorbent acrylates and acrylamides and outcompete cellulose and starch-based incumbents on performance.
Our unique green chemistry platform enables us to provide customers innovative eco-friendly ingredients and materials that meet evolving consumer expectations and environmental regulations, all while providing exceptional functionality. As ingredients in cosmetic formulations, for instance, Ecovia Biopolymers provide excellent and differentiated sensory and functional benefits compared to biobased alternatives, which can have an undesirable skin-feel. Non-toxic, non-GMO, 100% biobased, and biodegradable (1), our biopolymers enable procurement of highly sought-after eco-certifications. For this reason, we signed a multi-year Joint Development Agreement with Seppic Inc.—an Air Liquide Subsidiary—to co-develop topical cosmetic and dermal pharmaceutical ingredients utilizing our bioprocess. This partnership allows Ecovia to focus on process development while relying on Seppic’s formulation and regulatory expertise, as well as worldwide access to customers.
In addition to beauty care, our crosslinked biopolymer materials closely mimic the performance metrics of synthetic polyacrylate and polyacrylamide superabsorbents. Metrics such as centrifugation retention capacity and absorption speed are important for absorbent hygiene products. Our AzuraGel? biopolymers, for instance, offer improved absorbency under pressure and gel strength compared to incumbent biobased materials (picture a baby sitting on a diaper…you do not want it to leak!). Finally, our production process affords substantial cost reductions compared to conventional routes for producing similar ingredients and materials. From these advantages, we create a compelling value proposition for product manufacturers that are seeking cost-competitive biobased materials with enhanced functionality while providing highly sought-after marketing claims.
Figure 1: Ecovia Biopolymers are 100% biobased and biodegradable alternatives to acrylates and ‘Ready Biodegradable’ according to the OECD 301B protocol.
Who are your customers and how large is the addressable market for your products/services?
As noted above, Ecovia Biopolymers are useful in many applications, from soil additives to superabsorbent fillers for hygiene products. Our product concepts address market niches worth >$1.75 billion annually, spanning pharmaceuticals (excipients, coatings for delivery), research products (resins, raw materials), cosmetics (thickeners, film formers), industrial products (dispersants, flocculants, chelates), food/nutraceutical (for calcium absorption, texturizers, de-bittering agents) agriculture/horticulture (soil amendments, fertilizers, tackifiers), packaging (gel packs), and hygiene (superabsorbents for infant & geriatric, feminine care). Pricing and volumes vary significantly by application. Specialty cosmetic ingredients sell for up to $400/kg at relatively small volumes while eco-friendly diaper fillers, on the other hand, may sell for $6/kg at significant volumes. Biodegradable polymers as a whole are growing at a CAGR of 14.8%. In fact, the Total Available Market for superabsorbent polymers (SAPs) for hygiene is estimated to be $6.1 billion/year (BCC Research Reports. 2017).
How scalable do you believe your company is?
We employ a hybrid business model, generating revenue through both royalties and product sales, depending on industry partner and product application. As a developer of industrial bioprocesses, we may co-develop and out-license a technology package by field of use. This is true for non-core application areas like beauty care and pharmaceuticals, for which we negotiate milestone payments and royalties for commercial use of our process. On the other hand, for core applications like as superabsorbents in hygiene products, Ecovia seeks partnerships with vertically-integrated product manufacturers to supply biopolymers directly to end-users. These partnerships may take the form of a special purpose entity like a joint-venture, complementing Ecovia process technology with large-scale manufacturing capabilities and access to feedstock and customers to maximize adoption.
Can you summarize the journey of your company up to this point?
Ecovia Renewables Inc. was founded in 2014 and employs 9 FTEs as of January 2020. We received a total of $3.6 million in funding throughout our history. We have $2 million in total from non-dilutive Federal and State grant funding from the National Science Foundation, United States Department of Agriculture, and Department of Energy, with matching funds from the State of Michigan. In 2017, we won AkzoNobel’s Imagine Chemistry Competition and were named C&EN Magazine’s “Top Ten Start-ups to Watch”. In 2018, we signed a multi-year Joint Development Agreement (JDA) with France-based Seppic Group, a subsidiary of Air Liquide. Seppic was also the lead investor in our $1.6M Series Seed round, which was rounded out by the Michigan Investment in New Technology Startups (MINTS) fund and an angel investor. In 2019, we were named one of the “Next 50 Companies to Disrupt the World” by Jim Lane’s Biofuels Digest, and broke ground on building an in-house pilot plant to support expanded sampling and scale-up de-risking activities.
What is pivotal for your success going forward?
As we scale, we nourish relationships with three types of customers: 1) vertically-integrated product manufacturers, 2) feedstock providers, and 3) end users. Our goal is to develop these relationships while we conduct product trials with prospective customers. By creating minimum viable products in each market vertical, we gain valuable market insight used to prioritize product development. For instance, we evaluated AzuraGel?’s absorbency metrics in-house using industry-standard benchmarking tests before testing with third parties, eventually incorporating this material into vertically-integrated protypes of Fortune 500 companies. Partnering with an upstream or downstream stakeholder is key to our success in the market, as high infrastructure costs are a significant barrier to entry in this industry.
Can you provide some KPIs that helps understand the size and growth of your company?
Our company is growing in revenue and headcount. In 2019, we saw a 34% increase in joint-development revenue and a 28% increase in employee headcount, with nearly $600k in total revenue for the year. Regarding our commercialization roadmap, we plan to launch cosmetic products next year, industrial and agricultural/food products in 2022, and specialty hygiene and packaging products in 2023. We plan to become cash-even in 2024, when we anticipate $15-20 million in revenue from partnerships, licensing royalties, and product sales
How can strategic partners from the chemical industry or financial investors contribute to your success?
Ecovia Renewables seeks to raise a $6 million Series A round in Q2 2020 to cover costs associated with: 1) demonstrating improvements in scale-independent process metrics, 2) partnering and launching new product families, especially AzuraGel? for superabsorbents, and 3) demonstrating scalability and customer pull at 10,000 L bioreactor production scales, either with a strategic partner or contract manufacturer. We plan to hire research scientists to head our strain development efforts, product application scientists to build our chemistry IP portfolio, and business development and sales personnel for relationship building and initial sales across product niches.
Who is the primary point of contact for investors and strategic partners?
- Name: Jeremy Minty, PhD
- Title: President & CEO
- E-Mail: [email protected]
- Phone: (734) 926-3041
- Website: www.ecoviarenewables.com
- LinkedIn: https://www.dhirubhai.net/in/jeremy-minty-2889415a/
Disclaimer: The sole responsibility for this content is with the company profiled.
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