TIPA is developing compostable, flexible food packaging to replace environmentally damaging plastic packaging.
Millennium Food-Tech LP (TASE: MIFT) has announced that it has invested $4 million in Israeli compostable flexible food packaging company TIPA. Millennium will invest in TIPA according to the SAFE investment model with the investment will be converted to shares at a 20% discount of the share price based on the company's evaluation in the next financing round.
This is the third investment by R&D partnership Millennium Food-Tech, which recently completed two successful public offerings and one IPO of portfolio company SavorEat.
Compostable and recyclable food packaging is potentially a vast market, with the world's largest food companies like Pepsico and Nestle, saying that they will stop using plastic packaging and switch to 100% use of biodegradable or recycled packaging.
Millennium was the first R&D Partnership to hold an offering on the Tel Aviv Stock Exchange (TASE), and one of the few to have held an offering to date.
Since it was founded, TIPA has raised $53 million. In the last financing round conducted by the company 18 months ago, the company raised $27 million with Blue Horizon venture capital fund and the Triodos investment bank, among others. Additional investors in the company include GreenSoil Investments and the Hearst family, owners of the giant US media empire.
TIPA was founded in 2010 by CEO Daphna Nissenbaum and Tal Neuman. The company has 46 employees in Israel, Europe, the US and Australia.
TIPA manufactures a unique compostable packaging solution developed using material innovation. Their breakthrough technology offers a truly sustainable alternative for the flexible packaging market, in contrast to the existing flexible plastic films currently on the market, which are cannot be recycled in most cases. TIPA has developed compostable solutions for food packaging that, when placed in a home and industrial compost facilities, disintegrate and decompose like organic waste. The company currently provides solutions for various markets and different types of foods such as: fresh fruits and vegetables, cereals and legumes, granola, snacks, coffee beans, cakes and candies. The company has also developed packaging solutions for non-food marketing including zipper packages, and polybags for the fashion market etc.
The global market for flexible packaging is worth an estimated $160 billion in 2020 and is forecast to reach $200 billion by 2025 (with an annual rate of growth of 4.5%) - this is combined with a growing trend of using packaging with reduced ecological footprint concerns. Minimizing environmental damage has become critical for players in flexible packaging, as unprecedented pressure is placed on plastic manufacturers to develop biodegradable solutions for products non-recyclable products.
TIPA began to sell the first generation of its products in 2017 and since then - according to Millennium's announcement - it has increased sales every year. "Even in 2020, despite the Covid-19 crisis, the company has succeeded in significantly increasing its sales and its growth." The next generation of the company's products will be launched next year.
Millennium Food-Tech completed two public offerings in the summer in which it raised NIS 42 million. Since the initial public offering (IPO), the company's shares have recorded returns of 40%.