French cleantech startup Calyxia is on the brink of profitability: The company just raised a $35 million Series B round that will enable it to further scale up industrial production of its sustainable alternative to microparticles and microcapsules, putting it on track to achieve net profitability by 2026. But co-founder and CEO Jamie Walters says the B Corp is just getting started.
The “first” problem Calixia is tackling is staggering in its global scope: Microplastics are contaminating everything around the world, from soils, rivers and beaches to the Arctic's ice caps, and they're even making their way into our bodies and brains.
Furthermore, traditional production methods employed in the materials and chemical industries can cause various environmental problems. Greening industrial manufacturing processes is essential to protect the environment for future generations and reduce the energy used to make things.
Walters said Calixia's mission over the next five to 10 years is to become the global leader in microparticles and microcapsules, after which it hopes the company's technology can transform the industrial chemical industry more broadly.
Founded in 2015, the business grew out of academic research at Harvard University and ESPCI-Paris PSL, with Walters being part of the scientific founding team after completing his PhD in biotechnology and chemical engineering at Cambridge University in the UK and working as a researcher. “In the beginning, I was in the lab with a team of scientists, exploring and discovering the limits of this technology, and dreaming of how far it could go, how it could be commercialised and how it could transform industries,” he told TechCrunch.
“Today, the microcapsule market is worth about $5 billion and is expected to grow to about $10 billion by 2030. Capturing 10% of this market could enable Calixia to generate revenues of $500 million to $1 billion in five to 10 years,” he added. “This would make Calixia the profitable French industry leader, […] Become[s] “We are leading the industry in this field and our vision, which is based on a 10-year plan, is to emerge as a significant and innovative player in advanced sustainable chemistry, beyond purely microparticles and microcapsules.”
What is “advanced sustainable chemistry”? For Calyxia, it comes down to coming up with alternative, environmentally friendly ways to carry out manufacturing processes that replace less clean methods and products.
Calixia's sustainable microparticles and microcapsules offer manufacturers in targeted sectors a way to replace dirty processes with clean ones, producing products using biodegradable alternatives that the company says break down without leaving behind harmful residues.
The company's approach with advanced materials is a little different: Calixia has developed a microencapsulation technology that can be added to other materials to make them more resistant to wear. This, the company says, prevents the generation of microplastics through wear, which is actually the main cause of this scourge (compared to additive processes that add tiny plastic beads to cosmetic products like face scrubs).
In this use case, the material needs to be made more durable to prevent it from breaking down into tiny particles.
The startup's client list currently includes more than 20 “top-tier” industrial blue-chip companies, and while Calixia wouldn't disclose details about its clients, it says they include large household brands looking to promote microplastic-free products to consumers.
Calixia's customers also must comply with new regulations, such as a European Union law coming into force in October 2023 that will limit the use of microplastics in products such as detergents, cosmetics and fertilizers. Walters noted that he expects a similar law to come into force in California, further driving demand for alternatives in the US.
Since we last spoke to the startup when it raised €15 million in Series A in 2021, it has restructured its operations, setting up dedicated units targeting each of the verticals it operates in. One unit focuses on fast-moving consumer goods, another on building agricultural use cases, and the last is its advanced materials division.
The company is also focusing on building its intellectual property portfolio, currently holding 60 patents worldwide. On the production side, it opened its first factory last year and has also raised some funds to build a second factory, also in France. Once the new factory opens, the company's capsule production capacity will increase from the current 500 tons per year to 3,000 tons.
Walters emphasizes that so far, demand across the three business lines has been fairly evenly balanced, but that each market has different dynamics. “Ingredients tends to have a lot of customers and low volumes, whereas agriculture has fewer customers but very high volumes,” he explains. “In consumer, you have cosmetics, which is low volume and high value, and then you have home care, which is very high volume, as is agriculture. Each market has different dynamics and there is some portfolio influence, but in the short, medium and long term, all three are comparable size.”
What about end of product life? Where their technology is used to reduce wear and make products last longer, is Calixia also looking to reduce the environmental impact? Walters agreed that extending the life of products won't help solve the sustainability challenge, but said the Advanced Materials division is working on several other areas that could help.
One of them focuses on making products easier to recycle by separating different layers of material, like peeling the label off a plastic shampoo bottle or separating the layers of plastic. He said the startup is also developing materials that “help materials self-repair or repair themselves,” potentially further pushing back their ultimate end-of-life date.
But he agreed that plastic use still poses sustainability challenges, arguing that “we have to tackle one problem at a time.”
Reducing energy usage
When it comes to reducing energy use in manufacturing, Calixia's Advanced Materials division has particularly novel technologies which Walters suggests will have a major impact on reducing greenhouse gas emissions from the production of coatings, composites, adhesives and resins.
Specifically, the startup's technology modifies the polymerization process used in production, allowing the polymerization to take place at lower than usual temperatures.
“We encapsulate a highly reactive catalyst,” Walters explains. “The protective coating around the catalyst protects it from reactions during processing and storage, and it activates at 100 degrees Celsius.” [versus. 180 degrees C, which is the standard for this type of polymerization] The catalyst is released on command to polymerize the material to make wind turbine parts, electric vehicle components and sporting goods parts.”
As a result, manufacturers of such parts can reduce the temperatures they use to make their products by 80 degrees or more, according to Walters.
“This is extremely beneficial as it reduces costs and improves the economics of production. It allows for a significant reduction in greenhouse gas and carbon dioxide emissions and also enables increased production rates as the catalysts we use are even more reactive than conventional catalysts.”
Calyxia's Series B was led by Lombard Odier Investment Managers' Plastic Circularity Fund and Bpifrance's Large Venture Fund, and the company said it also had “strong support” from existing investors, including Astanor.