Sustainable materials company Paptic announced that it has raised €23 million (USD$25 million) in equity financing, aimed at growing the company’s development of packaging materials and scaling up its ability to serve global customers.

The company also announced that it has received a €10 million capital loan from the Finnish Climate Fund, with proceeds to be used for the development of the industrial scale-up of its foam-based manufacturing technology.

Founded in 2015, Espoo, Finland-based Paptic develops and manufactures wood fibre-based and recyclable materials as a replacement for plastics and other conventional packaging materials.

Plastics currently make up 70% of the world’s flexible packaging market, valued at an estimated €200 billion per year. According to the company, its materials could replace plastic in nearly half of those end uses.

Tuomas Mustonen, CEO and co-founder of Paptic Ltd, said:

“Our rapid progress from a startup to a high-growth company, with Paptic materials in use by over 100 customers globally, has made us an appealing investment opportunity and we are delighted to welcome our new international investors to join us. A cornerstone of our operation is to work in accordance with the principles of circular economy, to this end, we support our customers to replace plastics in various flexible packaging applications.”

According to Paptic, the new funding will be used to help the company expand its market presence, improve customer services, and enhance sustainability efforts, supporting its goal of reaching €100 million in revenue by 2026 and achieving carbon neutrality by 2030. Paptic said that it aims to concentrate on strengthening its European presence, while accelerating growth in Asia and exploring opportunities for expansion in new markets such as North America.

New investors in the company included the European Circular Bioeconomy Fund (ECBF) and water and hygiene solutions company Ecolab.

Guillaume Gras, Investment Director at ECBF, said:

“The versatile applicability of recyclable Paptic materials provides an excellent basis to reduce the use of fossil materials in packaging. Our investment will provide Paptic with the resources to accelerate its international expansion, as well as to serve the growing demand for innovative packaging material.”

Luis Pereira, Senior Vice President, and General Manager of Ecolab’s Nalco Water Paper Division, added:

“We are excited about the opportunity to support circularity through our investment in Paptic and its successful approach to sustainable packaging. Our shared vision of protecting our planet and its vital resources serves as a foundation for this partnership. Our expertise and broad offerings, combined with our global reach, will help expand Paptic’s opportunities for growth.”