Xylophane AB, a Sweden-based developer of renewable packaging materials to extend food product shelf-life, has raised MSEK 34 million ($4.3m) in new VC funding. SEC Venture Capital and Capricorn Venture Partners were joined by return backers KTH Chalmers Capital and Innovationsbron.
Xylophane AB, developer of a unique renewable packaging material that extends the shelf life of sensitive food products, has raised 34 MSEK in a special issue of new shares. Two new joint owners, SEB Venture Capital and Capricorn Cleantech fund, have also joined the ownership group. The capital ensures the expansion and operation of the company’s pilot factory. The company also has a new chairman of the board, Mr. Dag Strömqvist, with many years of experience in the chemical and processing industry.
”The issue is further proof of the great confidence that exists in our products and our production engineering – on the part of both investors and customers. In addition to our ongoing co-operations with existing customers, we receive new inquiries each and every week,” says Håkan Grubb, managing director of Xylophane AB.
The capital contribution guarantees the expansion and operation of the pilot factory and company for three years. The pilot factory is expected to be operating by early October 2009, and will enable production of material for pilot projects for potential customers as well as the optimisation of Xylophane’s manufacturing process for future full-scale production.
New, strong owners on the scene
The fully subscribed issue totalled 34 MSEK and targeted existing and selected potential owners. SEB Venture Capital and Capricorn Venture Partners from Belgium, via its Cleantech Fund, became new joint owners. Former owners KTH Chalmers Capital and Innovationsbron together with Hans and Ingrid Wallstén also contributed capital.
“We have followed the company for many years. Our thorough analysis showed that the company has an exciting, highly sought-after product that offers a fascinating new alternative to an industry looking to replace old barrier solutions with modern, environmentally compatible products. The company is entering a new phase and we believe the coming years will be exciting. Prospects are excellent and existing commercial co-operation looks extremely promising. So we’re pleased to have the opportunity to join Xylophane’s group of investors,” says Björn Österlund, Senior Investment Manager at SEB Venture Capital.
Xylophane’s material has elicited great interest within the packaging industry, as well as from end producers within the food and chemical industries. This interest is based on the fact that Xylophane’s material has qualities that offer major environmental advantages and cost savings. The need for cost-efficient barrier material and production techniques has increased in recent years within the packaging industry, due to factors such as the rising price of raw materials currently used in barrier packaging (i.e. oil and aluminium).
Another advantage with Xylophane is that its technology does not demand complicated building alterations for producers with modern manufacturing facilities.
“Biopolymers belong to the group of innovations which have outstanding opportunities for global growth driven by the combination of increasing prices for oil-based plastics, consumer awareness for eco-friendly products and supporting legislation promoting the end-of-life disposal benefits of biodegradable packaging material. Xylophane offers a unique opportunity to tap into this emerging market with enormous growth potential,” says Paul Decraemer, Head of Cleantech Investment Practice at Capricorn.
Acclaimed development since the start
Vinnova has formerly supported the expansion of Xylophane’s business, which has received numerous awards and accolades from its inception. In addition to winning Vinnova and Nutek’s competition “Vinn Nu!”, honours garnered by the company include being named the most interesting growth company for venture capitalists at Stora Connect Väst Day 2006, and being one of six finalists in the 2006 Spin-off of the Year competition.
“We have been involved with Xylophane since 2005 and have seen the company develop from a research project into a company that demands attention within the packaging industry. Sweden’s leading position in the packaging and paper industry offers excellent opportunities to grow Xylophane into a global leader in this area,” says Jakob Svärdström, Managing Partner at KTH Chalmers Capital.
In 2008 Xylophane was named one of Sweden’s 33 hottest technology companies by newspapers “Ny Teknik”(New Technology) and “Affärsvärlden” (Business world). Xylophane has also been included on US ambassador Michael Wood’s list of hot Swedish environmental engineering companies since 2008.
New chairman of the board steps in
In conjunction with the completion of the issue, the appointment of Dag Strömqvist as chairman of the board was confirmed. Mr Strömqvist has many years of experience in key executive positions within the chemical and processing industries, including positions as former managing director for Eka Chemicals AB and former member of Akzo Nobel’s executive management team responsible for the chemicals division.