Startups bring safer chemistry to market

The Right Chemistry

Startups bring safer chemistry to market

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A new generation of chemical manufacturers is creating a safer marketplace.

Writer's note: Safer Made is evaluating investments in the startup companies that appear in this article and may have a financial interest in one or more of these companies in the future.

Retailers and large brands have gotten the message: Consumers do not want harmful chemicals in the products they buy. People, especially parents, actively seek brands and products that send messages of health and sustainability. A walk down the aisles of any supermarket will reveal many branded products making claims about the presence or absence of certain ingredients as well as the safety and sustainability of their ingredients and processes.

Unfortunately, many chemicals of concern still find their way into products. Without safer chemistry innovation, consumer and NGO pressure alone can result in regrettable substitution, when one chemical of concern is replaced with another harmful chemical, or in greenwashing, when irrelevant or misleading claims such as "chemical-free" are used on packages.

Brands and retailers actively seek safer chemicals. Traditionally, they have relied on their existing supplier relationships to deliver incremental advances in cost and performance. However, developing safer products can require innovative chemistry and product or process redesign that is often beyond what most suppliers are willing to do.

Thus, brands and retailers are turning to inventors, innovators and startup companies for new partnerships to develop safer products. This creates a great opportunity for new safer technologies and products, but additional capital is needed to accelerate the creation and growth of new companies in the sector.

Adrian Horotan and I founded Safer Made to fill this gap in early-stage funding for companies building inherently safer chemistry. Safer Made is an early stage venture capital fund dedicated to investing in technologies that eliminate the use of harmful chemicals in consumer products and manufacturing processes. In the past year, we have seen more than 200 startups that meet our safer chemistry mandate.

The startups we fund must be able to deliver something that the current larger suppliers are unable or unwilling to deliver: They must significantly improve human and environmental health as well as be able to scale and build lasting value.

Startups are willing to go where incumbents aren’t

Startups inherently challenge basic assumptions in the supply chain concerning how things are made. For example, the current supply chain is unlikely to develop water-free chemistry for textile dyeing and chemistry. This is a perfect challenge for startup companies with new technology platforms. We have seen many startups with different approaches to the challenge of water use within the textile sector including new chemistry platforms (Green Theme International), companies using plasma technology (APJet and MTI-X) or super-critical CO2 (Dyecoo). These companies all build their own hardware and produce or source compatible chemistry that can meet their customers' demands.

In each sector there are challenges such as waterless processing that the current supply chain is not adequately addressing. These are ideal challenges for startup companies, especially when there is an opportunity to capture the attention of consumers.

In some cases, the best way to bring a new safer technology to market is by creating a brand. For example, the startup company Mimikai is launching a line of insect repellents based on a bioinspired and biodegradable replacement for DEET. The highly efficacious active ingredient originally was licensed by one of the largest manufacturers of DEET-based products who never brought it to market to avoid cannibalizing their profitable DEET business. By building a company focused exclusively on safer and more sustainable insect repellents, Mimikai will be able to grow and demonstrate consumer demand without any internal conflicts.

Experience, scale and security

By developing specialized production and knowledge of a particular chemistry, incumbent chemical producers and suppliers have optimized their processes and products to provide large quantities of chemicals quickly and at relatively low costs. But, this strength limits the type of innovation and flexibility that they have to change radically the product chemistry.

As startups grow past their initial stages, incumbent suppliers may be acquisition partners who can leverage their experience scaling chemical production to help bring down costs and grow the market share for new technologies.

Brands are conduits of consumer demand

Brands and retailers are on the front lines of driving the demand for safer chemistry. Their expertise is in delivering products people want; in turn, they demand safer chemistry and materials from their suppliers.

The first step is usually demanding more transparency, and brands and retailers have spent considerable resources on figuring out what’s in their products and how are they made. The second step is often to shift to safer ingredients when the solutions are available. In parallel with these management strategies, innovation and new products provide positive narratives that resonate well with consumers.

More brands and retailers are trying to shift their focus to proactive chemical screening and preferred substances that can be used at the design phase to create compelling products. This forward-looking approach is an area where partnering with smaller startups can be very attractive. While it may be hard for a startup to meet the reformulation efforts of a global brand, they are often very well-positioned to create innovative new products or technologies that demonstrate the future of safety and sustainability.

Collaboration is key

The demand for safer and more sustainable consumer products continues to grow, and this is an opportunity to bring better chemistry into the world. Our challenge is to make sure that relevant actors have the information to make the most impactful investment and partnership decisions.

Safer Made spends a lot of time talking to leading brands and retailers in each sector to better understand what challenges they face and where they see opportunities to differentiate. We also talk with large chemical companies and suppliers to get a better idea of what will be coming to market soon. Then, we share information and connect technology providers with brands and manufacturers looking for solutions.

The intersection of consumer products, chemicals and sustainability is a critical intervention point for minimizing the exposure to harmful chemicals. Shifting the global economy to safer products is a huge economic opportunity that has the potential to benefit human health and the natural world.