Paptic raises €27.5M to “conquer” global flexible packaging market with wood-based fiber
23 Jan 2024 --- Finland-based wood-fiber packaging specialist Paptic reportedly raised €27.5 million (US$30 million) in growth financing in 2023, which the company says will help it “conquer” the flexible packaging market globally amid the move away from fossil-based materials.
In the first round of the two-part growth financing, Paptic raised funding of €23 million (US$25 million) and €4.5 million (US$4.9 million) in the second round at the end of the year.
The latest round was led by the UB Forest Industry Green Growth Fund (UB FIGG), joined by Emerald Technology Ventures, SIG InnoVentures and EIC Fund.
“Now that the financial round is officially closed, we are excited to focus on the next stages of our future growth. We have the ambitious goal of reaching €100 million (US$109 million) in revenue in 2026. The new capital raised during the past year puts us in a strong position to invest in our people, sales channels, and product development,” says Tuomas Mustonen, CEO and co-founder of Paptic.
“Our growth is based on our ability to competitively serve international brand owners who are seeking sustainable alternatives to replace plastics in their packaging. Our goal has been to broaden our shareholder base with international investors, and this second closing accomplishes that objective. I am very satisfied with the result.”
Flexible packaging market
The international flexible packaging market size is estimated to be over €200 billion (US$218 billion) annually, with 70% of the materials currently used being plastics, according to Paptic.
Thin plastic films could be replaced with wood fiber-based and recyclable at-scale materials in numerous applications, according to the company. In the upcoming years, Paptic says it will strengthen its presence in Europe and accelerate its growth in Asia.
The company’s contract manufacturing business model enables rapid capacity increase, and the new financing will also speed up the industrial scale-up of Paptic’s foam-based manufacturing technology.
Paptic’s growth strategy is also supported by forecasts showing that the amount of packaging will continue to increase due to economic and population growth. Without new innovative fiber-based solutions, like Paptic, a large part of the growth would come from plastic.
To reduce the use of fossil-based materials in packaging, the use of resource-efficient materials that are both recyclable at scale and made from renewable raw materials is essential, emphasizes the company.
“We are very pleased to have closed this investment in Paptic. We have been closely monitoring the company’s progress and the success the Paptic team has had in new product development and working with leading global brands. This all forms a solid base for ongoing success, and this additional financing will help accelerate its growth”, says David Walker, senior partner at UB FIGG.
“The EIC Fund has established itself as a strong force in EU deep-tech investments. This unique form of financing via EIC — combining grants and equity — is proving itself highly attractive to Europe’s most promising start-ups. We hope that our investment will help Paptic to accomplish their objective of replacing plastics and other conventional materials in packaging, which is also one of the EU Green Deal’s objectives,” says Svetoslava Georgieva, chair of the EIC Fund Board
Edited by Louis Gore-Langton
