U.S. - based Gen Phoenix, which specializes in the large-scale production of sustainable recycled leather from waste and leather scraps, closed its latest round of financing last week, raising up to $18 million. The new funding will be used to strengthen and advance the company's current business model, specifically by strengthening relationships with the fashion, transportation, and automotive industries, and by pushing the company beyond its own boundaries to scale its proprietary recycling solutions and create new, next-generation sustainable materials.
The investment round was led by venture capital firm Material Impact, with leading participation from British footwear company Dr. Martens; InMotion Ventures, the investment arm of British automaker Jaguar Land Rover; and U.S. multinational fashion company Tapestry, the parent company of luxury brands Coach, Stuart Weitzman, and Kate Spade.
In response to these investments, Paul Deninger, operating partner of Material Impact, the venture capital firm that led the round, will join Gen Phoenix as chairman of the board. In this position, he will seek to bring his extensive experience in transforming leading companies in their respective fields to the service of the company as Gen Phoenix opens up to this new phase of growth and diversification.
Both Dr. Martens and Tapestry are members of the Leather Working Group, as leather is a vital component of both companies’ garments.
Gen Phoenix to Upscale its Recycled Leather
Sustainability is increasingly becoming a visible part of the consumables process, and UK-based Gen Phoenix processes leather waste from landfills into fibre, which is then braided around a core using high-pressure water jets. The company claims the resulting material is more durable than conventional leather and can be used for clothing, shoes or seating.
Aside from Nike, the company's biggest customers have been in public transportation - airlines such as KLM, EasyJet and Delta, or train operators such as Amtrak or SNCF - but it is now moving into higher-value areas. These include seat covers for automakers such as JLR, which participated in the round through its InMotion Ventures unit.
Leading the Charge Towards New Sustainable and Circular Materials
The he main destination of these new funds will be the different actions that the company will put into practice with the aim of scaling up its current business model within the fashion, motor, and transport sectors, trying to reach new commercial partners. Also, and taking a step further in its commitment to sustainability and circularity, to try to scale and diversify in the innovation of new generation sustainable and circular products, going beyond its current focus on the manufacture of recycled leather.
Starting precisely with this last point, a new strategic area of investment for Gen Phoenix will be to scale up product innovation, seeking to take the company's existing proprietary technologies, which currently have the capacity to produce up to 6 million square meters of material per year from its new facilities, into the manufacture of new generation circular materials. These fibers will be obtained from the use of post-industrial and post-consumer waste, leather waste, and all kinds of raw materials of vegetable origin.
As far as its current customer portfolio is concerned, investments will be directed towards further deepening the relationships it currently has with the mass transport industry, represented in its portfolio by more than 250 customers among airlines, trains, and bus companies, while trying to attract new partners in the automotive interior design space. A sector in which, according to their figures, they have already used up to 4 million seat covers made from Gen Phoenix sustainable recycled leather, which would have saved more than 8,000 tonnes of leather waste.