Sway Raises $5 Million for Seaweed-based Packaging Innovation

Sway, the California start-up replacing plastic packaging with seaweed-based solutions, has sealed a $5 million seed round. It’s a major leap forward for a 2023 winner of the Tom Ford Plastic Innovation Prize in partnership with Lonely Whale. Announced Tuesday, Sway’s new funding accompanies what the company said is a “breakthrough” biopolymer resin designed for plug-and-play compatibility with most current packaging production infrastructure. The Bay Area-based clean-tech firm launched in 2020 with a mission to provide alternatives to packaging made from ocean-polluting plastic. Less than 15 percent of the 180 billion polybags created annually for the apparel, footwear and accessories sector get collected and recycled, according to Fashion for Good, illustrating the daunting impact of single-use plastic packaging. A powerhouse in carbon sequestration, seaweed quarantines up to 20 times more carbon per acre than trees, according to Harvard University research. World Bank data suggests that seaweed farming, a potentially $12 billion market by 2030, is among the growing industries aiding women workers and mitigating poverty in developing nations. Sway’s CEO said the company is focused on ramping up production this year. “We believe everyday materials should help to replenish the planet from sea to soil,” said Julia Marsh, who cofounded the sustainable innovator along with chief operating officer Matt Mayes, formerly of Fair Trade USA and USAID, and Leland Maschmeyer, the first creative chief for yogurt-maker Chobani. “The launch of our thermoplastic seaweed materials, along with an influx of new capital targeted at scaling production, signifies tangible progress toward a more circular future.” Sway claims its new microplastic-free, bio-based Thermoplastic Seaweed Resin, aka TPSea, quickly biodegrades in home composting systems and serves as the basis for Thermoplastic Seaweed Film, which could replace plastic bags, pouches and wrappers in fashion and beyond. Patent-pending TPSea represents an advancement over Sway’s existing pellet technology, whose use of plasticizers to improve flexibility runs afoul of the European Union’s Single-Plastic Derivative. Matilde della Fontana, a senior research associate at Boston-based sustainable innovation advisory firm Lux Research, noted the steep operational costs hampering seaweed-focused packaging start-ups. She pointed to the challenges of not just cultivating and processing macroalgae but also extracting polysaccharides, a key building block, in bio-refineries. “Consequently, emerging players struggle to ensure the necessary volume to meet the demand for plastic-free products at a price that can be competitive with current solutions, limiting the adoption of algae-based materials to applications that can afford a premium or in novelty products,” she told WWD sister publication Sourcing Journal. That’s where Sway’s $5 million injection will help, building on the $2.5 million pre-seed funding the firm raised in 2021. Third Nature Investments led the recent round, which included The Helm, Alante Capital, Bam Ventures, and Superorganism, among other angel and institutional investors. Olivia Fleming, a partner at The Helm, believes the regenerative nature of Sway’s technology feedstock uniquely addresses the needs of the nearly $265 billion flexible packaging market. The funding also “demonstrates the industry’s interest and need for alternative packaging solutions that have the potential to help companies comply with current regulations that ban and tax the use of traditional plastics in packaging,” added Lux Research’s della Fontana. Support from J.Crew and Burton, two early adopters in the Tom Ford Plastic Innovation Accelerator along with Nike and Stella McCartney, won’t hurt either. “Regenerative practices and sustainable packaging are active focus areas for J.Crew Group,” said Doug Forster, chief sourcing officer for J.Crew, which has been remaking its image since emerging from a pandemic-era bankruptcy. He’s keenly aware that balancing impact with function is the biggest challenge facing any new innovation. The group is charging forward on a 2025 goal to sustainably source all of its packaging and eliminate virgin plastic from these items. According to the company’s 2023 ESG report, in 2022, 41 percent of J.Crew Group’s paper and plastic packaging contained 100 percent sustainably sourced materials. “Collaborating with Sway over the last year has proven our visionary alignment and their ability to create products of great quality,” Forster said, noting how Sway’s “steady progression” toward commercial-scale production will support apparel’s broader adoption of next-gen materials. Burton packaging engineer Mitch Rovito said Sway’s new thermoplastic film line supports the outdoor industry’s goal of “living their values” via eco-friendly circular packaging. The start-up ticks the boxes on what the snowboard and snow-gear maker looks for in new packaging partners: seamless supply chain integration and environmentally sound end-of-life disposal. EcoEnclose, a Sway partner and sustainable packaging provider, sees brands in fashion, food and cosmetics clamoring for “restorative” alternatives to mainstream plastic packaging, said CEO Saloni Doshi. “With tangible shifts in customer values, brand sustainability commitments and packaging legislation, it’s clear that innovation leaders like Sway have a keen market ready to adopt their truly unique, thoughtfully produced bio-based materials,” she added. Pointing to surging innovation in the seaweed-as-packaging space, della Fontana fingered competitors like fellow Bay Area resident Loliware and Oslo’s B’Zeos and their efforts developing similar platform technology to commercialize seaweed-based resins. “Although the market is big enough for different players to enter,” she added, “companies able to provide unique material performance and manufacturing capabilities to reduce costs will be more likely to succeed.” She continued, “Ultimately, commercial partnerships with retailers and brand owners following the funding announcement will be critical for Sway to demonstrate the traction and scalability of its solution.”