Exclusive: Green packager Cove nets $6.6M, led by Gracias' Valor
Sustainable packaging startup Cove has closed on a $6.6 million extension of its Series A round to supply its biodegradable packing materials to consumer packaged goods brands, the company tells Axios.
Why it matters: The funding is a bright spot in an otherwise dark time for financing the sustainable food sector.
Details: Cove's round was led by Valor Siren Ventures, a fund with anchor investors Starbucks and Nestlé, which focuses on investing in the food and retail sectors.
- Valor Siren Ventures is part of Valor Equity Partners, a private equity group created by Antonio Gracias, an early Tesla investor and close compatriot of Elon Musk.
- James Murdoch's Lupa Systems and Litani Ventures participated in the round.
Zoom in: Cove spent four years developing a biodegradable water bottle made from its PHA material created in bioreactors by microbes. The bottles are now used as test products for consumer brands.
- Making a biodegradable water bottle from PHA material has a lot of "technical challenges. Tons of companies have tried to do this," said Cove founder and CEO Alex Totterman.
- The company is now focused on working with big consumer brands to develop biodegradable packing and has moved its R&D headquarters to Orange County, California.
- Cove said a recent development is its own machine learning tool that can help produce and grow its biomaterial in the exact customizations that a brand customer would require.
Big picture: Single-use plastics, made from fossil fuel feedstocks, are a major problem for environmental pollution and climate change.
- The United Nations, environmentalists and consumer advocacy groups have declared a war on plastic to attempt to curb the growing mountain of plastic waste in landfills and oceans.
- Consumer brands have been trying to make more of the packaging they use recyclable and compostable, but sustainable packaging largely remains more expensive than cheap traditional plastics.
- The first half of 2023 saw a drop in funding for climate tech startups, and it's been particularly hard for food-related startups.