Why we invested in Modern Synthesis

In our ongoing mission to support innovations that drive the transition towards an affordable, resilient, and decarbonised world, Extantia is thrilled to announce that we have led Modern Synthesis’ $5.5M funding round, alongside strong partners including Artesian, Collab Fund, and others.

This London-based startup is using material science to transform bacterial nanocellulose (BNC) — a natural product of fermentation — into a new class of responsible textiles and coatings. By pushing the scientific boundaries of what BNC can do, Modern Synthesis is creating a portfolio of biomaterials that can cost-effectively replace leather and plastic-based synthetic materials in fashion, footwear, and automotive applications. This funding round will enable the company to expand production at its pilot facility and meet growing demand from Tier 1 fashion brands.

The problem: Consumers and legislators demand sustainable alternatives to plastic-based raw materials, but existing solutions lack scalability and performance.‍

This is projected to cause an enormous shortfall in low-impact material availability over the coming decades.‍

As highlighted in our “Re-Imagining the Plastics Industry” thesis, plastics account for up to 4.5% of global GHG emissions, yet only 9% are recycled globally. Given plastics’ contribution to global emissions and imminent circularity regulations, it’s clear that there’s a meaningful market opportunity for innovators in both alternative materials and next-generation recycling. Alternative materials startups are tackling both the plastics problem and the animal-based inputs problem. They can reduce the fashion industry’s reliance on leather, which in itself will be a 197 Mt CO2e problem by 2050, as well as displace fossil-fuel based textiles like polyester and synthetic leather (e.g., polyurethane (PU)). Emissions from synthetic polyester are projected to reach 1.4 Gt CO2 by 2030, while CO2e from synthetic leather (e.g., PU) are projected to reach 65 Mt by 2030. End-consumers and legislators are demanding change, creating a market pull from fashion brands and other textile consumers to create sustainable alternatives in the face of mounting climate regulations. The numbers are clear — fashion brands could face a 133 million tonne shortfall of low-impact raw materials by 2030, with up to 8% of EBIT at stake. We are excited to back a company that is ready to address this shortfall.

The winning solution: An advanced biomaterial that can cost-effectively replace leather and plastic-based synthetics through a roll-to-roll production process (and of course, a stellar team)

Enter Modern Synthesis, a biotechnology company pioneering the development of microbially-derived biomaterials. To make their bio-based materials, Modern Synthesis transforms nanocellulose — a natural fermentation-derived fibre — into durable, high quality alternatives to animal leather, ‘vegan’ leather, and plastic-based coated textiles. The company’s scalable, proprietary process leverages advanced material science to build upon the innate strength and versatility of nanocellulose, a naturally derived polymer which is 8 times stronger than steel at a nanofibre level. The resulting materials are free from petrochemicals and toxic ingredients, and offer reduced environmental impact compared to incumbent textiles.

Building on our insights in our Re-Imagining the Plastics Industry thesis, we built conviction that the winning startup in this space will have a combination of the following areas — and Modern Synthesis checks every box:

1. A rockstar team who is technical, and also deeply understands the textile end-customer and aesthetics. Its co-founders, Jen Keane, CEO and experienced designer, and Ben Reeve, CTO and bioengineer/materials expert, are the perfect pair to tackle this problem. Jen is an inspiring leader. Helping set creative direction for new materials innovation at Adidas, she understands the demands of her customers deeply, who need to balance aesthetics and performance KPIs. Upon leaving Adidas, she conceived the idea for Modern Synthesis during her master’s program at Central Saint Martins, where she aimed to reimagine the material design process and eliminate the industry’s reliance on animal and plastic-based inputs. During her program, she collaborated closely with scientists at Imperial College London, including Ben, who identified and sequenced the microbial strain that Modern Synthesis uses today. With a PhD in bioengineering and previous experience as founding CTO at Puraffinity, where he led a technical team to deploy biobased materials across the water industry, Ben is the perfect technology complement to Jen’s design and customer know-how.

2. An alternative material that enables a broad, high-performance product portfolio at scale, whereby high-performance is defined by hitting key material metrics. Relative to the competition, Modern Synthesis has presented us with the most credible alternative material that can be implemented across accessories, footwear, automotive, and more, while enabling high quality performance and unique aesthetics. Modern Synthesis’ patented technology employs a unique combination of biopolymers and green crosslinking chemistries to bacterial nanocellulose (BNC), to create materials with unique aesthetics and quality. BNC, coupled with Modern Synthesis’ proprietary process, also enables high performance across key material metrics (e.g., flex, tensile strength, color fastness, heat stability). — In some cases outperforming commercial standards and competitive materials.

In September 2023, Modern Synthesis also collaborated with Danish fashion brand GANNI on a prototype handbag, shown below, which was the first step as the companies gear up for the commercial launch of GANNI’s iconic Bou Bag in Modern Synthesis’ biomaterial.

3. TEA with a credible cost-down pathway. Their TEA is promising and they have made a smart choice in choosing a beachhead market in the premium/luxury segment, which boasts a large TAM and high-value products that will enable the company to achieve cost parity and scale faster. Modern Synthesis has a clear cost-down pathway to achieve parity with leather and plastic-based synthetics. As the company scales from pilot to contract manufacturing to full-scale production, reductions in unit costs primarily result from roll-to-roll production and efficiency improvements, which leads us right to winning requirement #4.

4. A roll-to-roll production process. Within BNC approaches, the company differentiates itself by demonstrating compatibility with roll-to-roll production methods. In contrast to batch-based production, roll-to-roll processes transform raw materials into finished rolls of fabric, without stopping the flow of production. Compared to batch production, roll-to-roll manufacturing increases efficiency, reduces costs, minimises waste, and improves material quality and consistency. It also enables lower CapEx by allowing the company to leverage contract manufacturing, since they’re able to integrate with existing supply chains. From a cost perspective, it enables higher production volumes at an earlier stage and thus lower cost. We consistently heard from industry players and customers that producing roll-to-roll is key to scaling for alternative materials because — surprise — industry isn’t going to change their process for a green alternative. With this funding round, Modern Synthesis will demonstrate a full roll-to-roll production process to gear up for rapid scaling.

5. A credible pathway to eliminating plastic coatings, leading to winning sustainability credentials. Unlike most competitors and incumbent animal leathers today, Modern Synthesis has demonstrated unprecedented material performance without plastics or polyurethane (PU) . The material is bio-based with a credible path to circularity, including plans to feed end-of-life products back into the supply chain as BNC feedstock or other established cellulose recycling streams. Regulators demand circularity, with the EU and UK implementing extended producer responsibility (EPR) directives for textiles to hold producers accountable for material recycling. This is a key differentiator to competitors, particularly those at higher TRL levels.

Modern Synthesis is EPIC: How the carbon math adds up

Modern Synthesis’ materials have a significant role to play in reducing global GHG emissions. They can displace carbon intensive products — which travel the world on globally dispersed supply chains and are in constant demand as they are partially linked to the growing global population. These factors make the company’s products and technology ideal candidates to decarbonising key sectors including leather, footwear, and automotive.

Accounting for emissions reduction potential within leather and footwear only leads to a combined carbon TAM of 0.92 Gt CO2e per year by 2050. To work out which portion of that becomes the company’s emission reduction potential, we used production and sales forecasts through 2031 and the usual scale up factors according to the EPIC methodology whereby we assume a category-defining company can capture up to 20% market share by 2050. Combining both leather and footwear, we estimate that Modern Synthesis can reduce at least 100 Mt CO2e/year by 2050. We expect Modern Synthesis to generate additional carbon savings (and wider environmental benefits) by replacing plastics in other textiles and beyond. We’re very excited to back Jen and Ben, alongside the rest of the Modern Synthesis team as they scale up their pilot facility at a time when customer demand is clear and growing!

To learn more about alternative materials and next-generation recycling opportunities more broadly, check out our Re-imagining the Plastic Industry article published earlier this month.

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