Plastic recycling startup Novoloop has inked a deal with a major manufacturer to produce its upcycled thermoplastic polyurethane at commercial scale, TechCrunch has exclusively learned.
The agreement helps nudge the Menlo Park-based Novoloop through the “valley of death” that many climate tech startups must slog through.
Startups that depend on hardware are particularly susceptible to stumbling in the valley, the dreaded moment when they’ve proven their initial technology and have not generated sufficient revenues from selling their product.
Under the terms of the deal, Novoloop will supply Huide Science & Technology with a chemical building block used to make thermoplastic polyurethane. Novoloop makes the material, known as a polyol, from post-consumer polyethylene waste like plastic bags, one of the hardest materials to recycle.
Thermoplastic polyurethanes, or TPU, are a type of plastic that’s used in everything from running shoes to medical devices.
“For this product line, we have essentially achieved what would be the commercial relationship,” Novoloop co-founder and CEO Miranda Wang told TechCrunch.
At this point, Novoloop is constrained in its ability to supply polyols, Wang said. Earlier this year in India, the startup commissioned its demonstration plant, which is capable of producing tens of tons of the material per year.
The demonstration plant’s capacity is sufficient to produce enough TPU for “major pilot projects,” Wang said, including one for a footwear customer that will be announced in the coming months. Previously, Novoloop supplied Swiss shoe manufacturer On with its Lifecycled material for the tread of its Cloudprime sneaker.
Deals like the one with Huide will be key for the Novoloop’s progress, Wang said. “The biggest hurdle to profitability is economies of scale,” she said. “A lot of the focus next year will be driving a lot of these customer deals to close so that we can finance the [commercial-scale] facilities.”
Once the deals and financing fall into place, Novoloop expects to have its commercial plant up and running in early 2028, Wang said. The first version should be able to supply enough polyols to produce about 16,000 tons of TPU annually.
“When we can run the materials at those types of volumes, we expect to be able to be at price parity with virgin TPUs,” she said.