Novoloop, a plastic recycling startup, has signed a deal with a major manufacturer to produce its upcycled thermoplastic polyurethane at a commercial scale. This agreement helps the Menlo Park-based company navigate the challenging period known as the “valley of death,” a phase many climate tech startups face. Hardware-dependent startups are especially vulnerable during this time, which occurs after they have proven their initial technology but before they generate sufficient revenue from product sales.
Under the terms of the deal, Novoloop will supply Huide Science and Technology with a chemical building block used to manufacture thermoplastic polyurethane. Novoloop produces this material, called a polyol, from post-consumer polyethylene waste such as plastic bags, which are among the most difficult materials to recycle. Thermoplastic polyurethanes, or TPU, are a versatile type of plastic used in a wide range of products from running shoes to medical devices.
Novoloop’s co-founder and CEO, Miranda Wang, stated that for this product line, they have essentially achieved a commercial relationship. Currently, Novoloop’s ability to supply polyols is limited. Earlier this year, the startup commissioned a demonstration plant in India capable of producing tens of tons of the material annually.
The capacity of this demonstration plant is enough to produce sufficient TPU for major pilot projects. One such project is with a footwear customer and will be announced in the coming months. Previously, Novoloop supplied its Lifecycled material to Swiss shoe manufacturer On for the tread of its Cloudprime sneaker.
Wang emphasized that deals like the one with Huide are crucial for the company’s progress. She identified the biggest hurdle to profitability as achieving economies of scale. A primary focus for the next year will be closing more customer deals to finance the construction of commercial-scale facilities.
Once the necessary deals and financing are secured, Novoloop expects to have its commercial plant operational by early 2028. The initial version of this plant should be able to supply enough polyols to produce approximately 16,000 tons of TPU each year. Wang said that when the company can produce materials at those volumes, they expect to reach price parity with virgin TPUs.