CleanFiber has the demand and is getting ready to ramp up the supply.
The startup, which moved to Buffalo in 2017 after winning a $500,000 43North contest prize, manufactures building insulation from recycled corrugated cardboard.
The business recently secured a $10 million investment from AXA Im Alts, an investment management company. That’s on top of the $8.5 million in venture capital and $14 million in debt financing raised earlier this year.
“It really positions us strongly for growth,” said CEO Jon Strimling.
Since its founding in 2013, CleanFiber has raised about $40 million in equity investments and $14 million in debt facility.
The most recent $10 million investment will go toward expanding the business production capacity. Strimling estimated that the company’s demand is 10 times higher than what it can ship out.
The company is in the middle of a $15 million capacity expansion project, which includes adding equipment and constructing a 6,000-square-foot addition at its Blasdell facility. The addition will bring its total square footage to about 67,000.
The business has grown its team from 75 in August of this year to over 80 employees.
Short term, Strimling’s goal is to increase production capacity five-fold over the next year. Long term, he plans to keep the business’ headquarters in Buffalo while adding facilities to build a network across the U.S. and internationally.
In a year that’s been tough overall for startups across the country to secure funding, Strimling attributes CleanFiber’s success to the technology its developed and potential opportunities in front of it.
“It’s really a testament to our growth and the demand we’re seeing in the market,” he said.
The company spent about $10 million and nearly two decades in the research and design process to get a fully commercial product that’s cost competitive. The business started shipments in 2020 and they've been ramping up the volume since then.
During the pre-shipping phase, it can be even more difficult to attract investors, though Strimling noted there are investors who want to put money towards solving meaningful social and environmental issues.
“We were able to do that with the strength of our technology, our team and being very clear about the opportunity we were chasing,” he said. “At this point, it’s more of a growth investment opportunity. … We’ve taken the tech risk out of the business, the market risk out, and really now it’s just a scale up, execution play.”
CleanFiber is one of 32 local companies to acknowledge a private, growth-oriented round of funding this year. The list includes Torch Labs ($40 million), Centivo ($30 million), Circuit Clinical ($29 million), Kangarootime ($26 million), SparkCharge ($22 million), CleanFiber ($18.5 million), PostProcess Technologies ($5 million), VeriTX ($4.5 million), HELIXintel ($4 million), Blockfusion ($2.6 million), ShearShare ($2.3 million), Azuna ($3 million), Patient Pattern ($2 million), OneBridge Benefits ($2 million), BetterMynd ($1 million), CoachMePlus ($1 million), Empire Hemp Co. ($1 million), CaHill Tech ($1 million), Buffalo Film Works ($750,000), FavorDrop ($725,000), Wellconnected ($550,000), MemoryFox ($400,000), Ellicottville Greens ($300,000), Swift Rails ($255,000) AireXpert ($125,000), Arbol ($110,000), Lemma Labs ($100,000), Timberhut (undisclosed), Flox (undisclosed), Ognomy (undisclosed) and Vicora/Ampullae (undisclosed).
