A biotech company tackling the single-use plastic industry on Tuesday announced that it raised $133 million in a two-stage Series B funding round.
Singapore-based RWDC Industries, which also has operations in Athens, Georgia, has developed a sustainable material solution that can be used as a substitute for plastic across a wide array of everyday products, including straws, coffee cups, fast-food containers and coated paper.
The company uses renewable feedstocks such as discarded cooking oil, rather than traditional fossil fuel-based feedstocks. The material biodegrades within a few weeks in soil, water or marine conditions, and leaves no toxic residue. After RWDC produces the drop-in material, it's sold to customers who then manufacture it into the end product.
The company produces polyhydroxyalkanoates, or PHA, which is made from microbial fermentation of plant-based oils, and is the only biodegradable plastic.
"It's essentially a circular-type material because when PHA is ready for its end of life, it can turn back into the CO2 that plants harvested from the atmosphere initially to make the plant oil," RWDC co-founder Daniel Carraway told CNBC.
The funding comes as consumers, prompted in part by images of wildlife choking to death on plastic, demand cleaner products. Much of the focus has been on single-use items like straws and plastic bags, and some regulators have stepped in to tax or outright ban these products.
"Plastic's ubiquity and quantity (there is far too much of it), durability (takes centuries to degrade), plus waste management systems that are ill-equipped to cope (significant leakage of plastic into the open environment) have combined to create a real environmental challenge," UBS analyst Victoria Kalb wrote in a recent note to clients.
While ambitious recycling goals have been outlined, actually executing on these initiatives is another matter. By some estimates, just 10% of plastic waste in the U.S. is recycled.
"Almost all of the more than 8bn tons of plastic ever produced are still with us, either in use, in landfill, or in the environment. Plastic pollution is now a significant issue," Jefferies analyst Simon Powell said in February.
As companies around the world scramble to make their products greener, RWDC is one of the start-ups working on a potential solution.
The funding round was co-led by Vickers Venture Partners, a venture capital firm focused on early-stage investments. The firm has overseen the growth of companies now worth in excess of $50 billion, and prior investments include Baidu.com.
RWDC will use the funding to build out its production capabilities in Athens, Georgia ahead of the product's commercial launch later this year. Carraway said the company has partnered with a number of global brands, although he would not disclose specific names.
"Our overall objective is to improve peoples' lives and work by making materials available that are naturally produced," Carraway said. "They enable us to have healthier choices in the materials that we can put into these very critical markets."
Carraway declined to comment on the company's valuation following the latest round of funding.
- CNBC's Michael Bloom contributed reporting.
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