In all, $496 million was invested in NextGen textile/fashion material companies in 2023, with the amount of investment in the sector since 2014 crossing $3 billion, according to the State of the Industry Report: Next-Gen Materials 2023.
- However, not a single new venture was launched in 2023, the report from nonprofit Material Innovation Initiative (MII) said.
- In the year gone by, just under $500 million was raised by the NextGen material companies from 30 publicly disclosed deals. This number does not include significant investments in the industry through companies’ internal investments in the development of NextGen materials.
THE CURRENT PLAYERS: The number of companies that develop NextGen materials currently stands at 137, with the majority working on NextGen leather with plant-based input.
- The more notable fundings in 2023 include Newlight’s $245 million Series G round. Other “usual suspects” in this field also raised further rounds in 2023. Natural Fiber Welding raised over $40 million from venture capital; MycoWorks raised a private equity round of $34.4 million; and Ecovative raised a Series E of $13.8 million.
- Of the 137 companies, the majority (88) work on biomimicry of animal leather and exotic skins. Twenty-two (21) work on biomimicry of silk, sixteen (16) on wool, fourteen (14) on down, and ten (10) on fur.
- About 64% of current players in the NextGen materials industry target NextGen leather, leaving other categories such as silk, wool, down, fur, and exotic skins with limited innovation efforts.
- Silk, fur, and exotic skins are attractive for early-stage innovators. High value product targets could enable a faster path to price parity than commodity markets. These categories may be attractive to innovators and investors looking to enter the NextGen materials industry.
STEALTH MODE: The report argued that many of the existing companies may choose to stay in stealth mode until they are ready to launch. It did not cover those companies who remain in stealth mode.
THE MATERIALS: While the majority of these companies (52.9%) use plant-derived materials as a main input, the rest don't: 13.6% use microbe-derived materials, 11.4% use blends, 7.9% use mycelium, 10.0% use recycled material, and 4.3% use cultivated animal cells.
