In-Depth Interview: Cruz Foam Seed Round & New Board Member
Marco Rolandi, John Felts
Cruz Foam announced two significant developments this week: 1) a seed round for $1.2M, 2) and the addition of Toby Corey to their Board. We asked John Felts / CEO and Marco Rolandi / Co-Founder about jobs, new offices, and much more. We asked Toby Corey what this means for Santa Cruz, the startup community, and the earth.
Note: Cruz Foam is a graduate of the Santa Cruz Works Accelerator 2018 and Startup Challenge / Venture 2018.
SCW: How long did this funding round take, and what were the key challenges you had to overcome?
Felts: Roughly 4-5 months. The key challenge was getting the VC industry to understand the value prop of sustainability. But VCs are seeing a paradigm shift where this is a “must-have” for large brands propelled by consumer demand and preferences, and also new regional regulations that are now impacting manufacturers. It is time to go green and it is becoming a brand asset.
SCW: How will it be used?
Felts: We are moving from the “proof of concept” (POC) phase to validating large scale manufacturing implementations. We relocated to the Wrigley Building for that very reason. We will use this investment for new equipment and the hiring of engineers.
SCW: Who is the ideal Cruz Foam customer?
Felts: Any company with packaged goods requiring high levels of protective packaging. Companies with consumer packaged goods who want to do good for their customers and the planet. This transition is now becoming part of their brand promise and brand assets. We are not just a small start-up with a new technology, we are a company powering industry leaders to be the catalysts for environmental change. Companies are moving from dabbling to scale rapidly.
SCW: How has the community helped your startup?
Rolandi: The support of Startup Challenge, Santa Cruz Works, and the local community has been instrumental. We can’t think of a better place to start a business. We have huge talent from UCSC, from the local community that has an active-culture of diversity and inclusion, plus green and blue environmental merits. It is the perfect business community for us.
SCW: What sparked your interest in Cruz Foam?
Corey: Let me share a little bit of context: I’ve always loved nature and felt a deep spiritual connection to it. After the Silicon Valley “grind,” I joined a non-profit board (wildlifedirect.com) headed up by Dr. Ricahrd Leakey. Dr. Leakey wrote the “The Sixth Extinction” back in 1995 where he opened my eyes to climate change, driven by human behavior. Unfortunately, his theory was correct, and we have been creating a hot mess for current and future generations. I met the Cruz Foam team when they joined the Santa Cruz Works accelerator in 2017. I fell in love immediately with the team and their solution. I was blown away that they invented an earth-friendly, biodegradable alternative to EPS foam and plastics. We connected instantly and I decided to become both an investor and advisor. Increasing my commitment by joining the board was a natural progression.
SCW: What is significant about this seed round?
Corey: The challenge for all early stage startups is securing capital. Lack of funding is one of the top reasons startups fail. Over $150B will be invested in US startups in 2020, of which only 7,000 of 110,000 companies will enjoy a sliver of those funds. In the last 90 days, Santa Cruz companies have been the top recipients of funds...globally. (Looker, Joby Aviation, PayStand, more) VCs are waking up to the big ideas, amazing talent pool, and ground-breaking companies being created in Santa Cruz, CA.
SCW: How will your Board participation impact your Blue Mind and surf time?
Corey: Yes, “Blue Mind,” my favorite book by Dr. Wallace J. Nichols. Cruz Foam makes my surf experience way better knowing there is a company out there solving ocean-big problems. And it won’t negatively impact my surf time because the entire company surfs. It is how we re-energize and build culture outside of the office.
The full press release:
Cruz Foam Closes $1.2M Seed Round, Adds New Board Member
Biodegradable materials manufacturer making waves in the consumer packaging industry
SANTA CRUZ, March 11, 2020 - - Cruz Foam, the biodegradable foam and plastic packaging alternative provider, announced today that it has completed a $1.2 million dollar seed round paving the way for commercial deployment of its patent pending, biodegradable EPS/plastic foam alternative materials. Investors include private financiers, as well as a grant from the National Science Foundation (NSF).
Cruz Foam has added a new board member, cleantech industry veteran, Toby Corey who has 25+ years of experience leading the growth of companies such as Solar City, Tesla, USWeb and Novell.
Cruz Foam has also recently reached key internal milestones in trials with vertical partners, paving the way for commercial deployment at scale. Cruz Foam’s initial focus is on packaging and its applications in the consumer-packaged goods, consumer electronics, shipping, and automotive industries where the company can have the biggest immediate impact.
NSF’s support is particularly noteworthy as the criteria for award includes not only the “Intellectual Merit” but also the “Broader Impacts” criterion encompassing “the potential to benefit society and contribute to the achievement of specific, desired societal outcomes.”
Dozens of cities from populous states such as California, Florida, New York, Maryland, and Maine have moved to ban EPS (and similar petroleum derivative based) materials particularly in food service, shipping, and other consumer-focused areas. In the next few years as these bans go into effect, companies will need to find cost-effective, scalable, and bio-friendly packaging and single-use product alternatives.
“Cruz Foam is excited to bring on our new investors, partners, and board members as we move into the next phase of our company’s growth,” said John Felts, CEO, Cruz Foam. “Our partner trials have gone extremely well, and the feedback we are getting across industries is very strong. These initial funds will enable us to meet our next milestones as we scale with our industry partners.”
“Every year, 8 million metric tons of plastic end up in our oceans and 100 million marine animals die each year due to plastic,” said Toby Corey, board member, Cruz Foam. “Cruz Foam exists to create a more sustainable planet for future generations, I’m all in. The work that John and the team have been doing with industry leaders to scale natural packaging solutions is truly innovative. I look forward to lending my cleantech experience from Solar City and Tesla to the team as they begin the commercial growth phase of the company.”
The company has also recently moved offices to the Wrigley Building on Mission Street in Santa Cruz. The building is home to a variety of start-ups, and is part of the exciting revitalization of the Santa Cruz business scene.
About Cruz Foam
Cruz Foam produces bio-benign foam and eco-friendly EPS-alternative solutions that power key industry leaders to be the catalyst for a cleaner environment. Cruz Foam’s patent-pending products are produced using an all-natural seafood industry waste material that creates a scalable, compostable alternative using the existing supply chain and at a similar cost. Current industry partners include consumer-packaged goods, consumer electronics, shipping, and automotive. For more information visit www.cruzfoam.com.
Press Contact: press@cruzfoam.com
