Target Information

The Investible Climate Tech Fund enthusiastically announces its investment in Earthodic, an innovative Australian company transforming natural materials with advanced capabilities while preserving their ability to be repulped, recycled, or composted. Earthodic has brought forth a groundbreaking product known as "Paperbarc™", a bio-based, water-resistant coating tailored for pulped and paper products. The company's team, which includes seasoned chemist Albert Tietz, materials specialist Fiona Donaghey, innovation strategist Melissa Mail, and former investment manager Anthony Musumeci, has garnered interest from major packaging organizations that are currently conducting pre-commercial trials of the Paperbarc™ product.

Industry Overview in Australia

The Australian packaging industry is undergoing a substantial transformation driven by environmental concerns and regulatory changes. With expectations that plastic production and incineration will contribute over 850 million tonnes of greenhouse gases in 2023, and with packaging accounting for approximately 36% of plastic production, the pressure is mounting for sustainable alternatives. The Australian government has set ambitious goals through the 2025 National Packaging Targets, aiming for 100% of packaging to be reusable, recyclable or compostable by that year. This target is supported by commitments from significant corporations including Nestle, Walmart, and Unilever, indicating a broader shift towards sustainability.

Despite existing sustainable packaging solutions, many rely on coatings that compromise the recyclability and biodegradability of cardboard materials. Current layers of wax or plastic polymer are frequently employed to create functional barriers to moisture, resulting in materials that are not suitable for recycling or repulping. This challenge has intensified industry calls for a low-cost, natural alternative that can meet the growing demand for sustainable packaging.

Earthodic's innovative Paperbarc™ addresses these critical gaps in the market through its proprietary formulation. Derived from lignin, a key organic compound in wood, this product not only demonstrates water resistance but also aligns with the broader push towards sustainable solutions in packaging. As the demand for effective and eco-friendly coatings intensifies, the potential market opportunity for products like Paperbarc™ becomes increasingly pronounced.

Rationale Behind the Deal

The decision to invest in Earthodic stems from the urgent need for sustainable packaging solutions that do not compromise on functionality. As the global packaging industry strives to reduce its environmental impact, Earthodic's Paperbarc™ offers an innovative and cost-effective alternative to traditional non-recyclable coatings. This product enables packaging manufacturers to align with the growing emphasis on sustainability and meet the regulatory demands for eco-friendly solutions.

Our investment reflects confidence in Earthodic’s unique technology, which has been validated through successful pre-commercial trials and has gained traction with several leading packaging organizations. By partnering with Earthodic, we aim to support the development of a product that could play a significant role in transforming the packaging sector, improving its overall sustainability profile.

Investor Information

The Investible Climate Tech Fund, an influential player in climate-focused investments, co-led Earthodic's oversubscribed AU$1.85 million pre-seed funding round alongside Tenacious Ventures, with additional contributions from investors such as Twynam and Closed Loop Ventures. Our mission is to identify and support innovative companies that address climate challenges, and Earthodic exemplifies this commitment through its groundbreaking work in sustainable packaging.

As the fund continues to champion climate solutions, our partnership with Earthodic heralds a significant step towards improving sustainability practices in one of the world's largest industries. We are eager to leverage our expertise and resources to assist the Earthodic team in scaling their solutions and penetrating the marketplace more deeply.

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The investment in Earthodic signifies a promising opportunity within the sustainable packaging sector. With increasing regulatory pressures and public demand for eco-friendly alternatives, Earthodic's Paperbarc™ not only addresses current market needs but positions itself as a forerunner in the evolution of sustainable practices.

Given the projected market size of US$915 billion for coated paper and paperboard applications, and the flaws of existing alternatives, Earthodic holds a strategically advantageous position. The company's innovative coating technology directly addresses critical sustainability issues while providing an economically viable solution for manufacturers.

Furthermore, the expertise and diverse backgrounds of Earthodic’s leadership team enhance the likelihood of success. Their track record in materials science, sustainability, and commercial development suggests they are well-equipped to navigate the complexities of scaling a new product in a competitive industry. This, combined with increasing interest from major packaging organizations, underscores the potential for rapid growth and widespread adoption.

In conclusion, the investment in Earthodic not only reflects confidence in a transformative product but also aligns with broader sustainability goals across industries. The future looks bright for Paperbarc™, and this investment could indeed yield significant returns in both economic and environmental terms.

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