Finnish technology start-up raises multi-million deal for fossil-free packaging materials

23 May 2024 --- Fiberwood has raised €7.7 million (US$8.3 million) in growth funding from existing investors Metsä Spring, Stephen Industries and public financiers for its fossil-free packaging. The company is preparing to enter a commercial phase with the aim of international growth.

The Finnish materials technology start-up has developed a production process to produce circular, fossil-free insulation and packaging materials from forestry side streams and other natural fibers. 

“Our products offer eco-friendly, recyclable and resource-efficient alternatives to traditional mineral wool-based insulation and cellular plastic-based packaging cushioning. Additionally, we enable the use of sustainable products in entirely new applications,” says Fiberwood’s CEO, Tage Johansson. 

International growth
In 2023, Fiberwood received €3 million (US$3.2 million) in funding for development work. 

Fiberwood developed a production process for fossil-free materials from forestry side streams and other natural fibers.“Compared to fossil-based plastic packaging solutions, depending on the fiber base, Fiberwood’s packaging material can be recycled in cardboard recycling, composted, used as soil improvement material, or even used for planting seedlings and seeds,” Karita Kinnunen-Raudaskoski, Fiberwood’s director of technology and product development, told Packaging Insights.

With the additional funding now secured, the company will begin constructing a test line to finalize its product concept, ensure industrial scalability and accelerate R&D activities. 

The test line will enable the manufacture of fully market-compatible products for customers’ commercial projects, says the company. 

Fossil-free packaging 
Fiberwood has several product development projects underway with strategic customers and is close to finalizing its initial series of commercial agreements.

“The funding round strengthens Fiberwood’s position as a pioneer in materials technology. We’re setting the foundation for a future production line, minimizing risks from the outset. Our investment in process technology distinguishes us, enhances our competitive position and contributes to the development of the Finnish forestry and materials technology know-how,” says Johansson.

The company unlocks the potential of material leftovers by converting them into valuable, recyclable and carbon-sequestering materials for various applications. Breathable and compostable insulation and packaging materials are ecological alternatives to conventional plastic-based packaging cushioning, stresses the start-up.

By Natalie Schwertheim