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%.
Millennium Food-Tech is managed by Chanan Schneider who serves as CEO. Schneider founded and, until recently, managed the Food-Tech incubator in Kiryat Shmona, whose partners included Tempo, Tnuva, and the OurCrowd investment funding platform. Schneider has major experience in the venture capital and high-tech worlds: among other ventures he has managed several startup companies, founded Indamed and was Managing Partner of the Agate venture capital fund. Guy Rosen serves as Chairman. He is Vice Chairman of Tnuva, and represents the kibbutzim in Tnuva, which is Israel's largest food company.
Schneider said: "We believe that the packaging market will undergo a complete transformation and switch from plastic packaging to biodegradable or recyclable packaging, with the assistance of products that TIPA is already selling and which is exactly in the right place to be dominant in this market."
TIPA CEO Daphna Nissenbaum said: "In recent years there has been a growing storm over the heavy price we are paying for use of plastic, stemming from the products sold by the polluting plastic industry, which has been growing exponentially in recent decades and irreversibly damaging the environment."
"Over the years, TIPA has developed sophisticated packaging technology, which imitates the way that nature packages. TIPA's packaging provides identical specifications to conventional plastic required for food packaging, while at the same time is designed with a solution for disposal after it is used - the packaging becomes compost within a few months: a clean, sustainable, and highly valuable resource."
"We are grateful to Millennium for becoming part of TIPA's mission, and its vote of confidence in the company and its ability to transform its vision for organically recyclable packaging into reality."
TIPA - ID
Area of Activity: Developing Compostable flexible packaging for various industries
Offices: Israel, Europe, United States, Australia
Investors: Blue Horizon; Triodos Organic Growth; Horizons (founded by Li Ka-shing's giant Hutchison investment corporation); GreenSoil; and the Hearst family.
Capital Raised to date: $53 million
Published by Globes, Israel business news - en.globes.co.il - on November 30, 2020
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