Biomaterials companies received $392 million in funds in the first three months of 2025 alone, according to Net Zero Insights, signalling that investors are returning to the sector.
Like other clean tech segments, biomaterials saw huge influxes of capital in 2022 followed by a corrective dip in 2023. Funding fell from a record $1.7 billion in 2022 to $583 million in 2024.
Now, funding flows could stabilise. If we see a similar performance over the next three quarters, 2025 could end on a near-record $1.5 billion in total sector investment.
Three companies bagged the lion’s share of Q1 2025’s biomaterials investments: Bloom Biorenewables ($15 million round), Tidal Vision ($140 million), and Pulpex ($80 million).
Who are these companies? And how have they managed to lure back capital after the green investment lull?
Tidal Vision: shell-based clean tech
US biomaterials company Tidal Vision is all about chitosan, the abundant organic material made from a substance found in the shells of crustaceans.
Investors are excited about chitosan for good reason. Chitosan is one of the most versatile sustainable materials, long celebrated by researchers for properties that make it ideal to replace many petroleum chemicals in industrial uses.
Chitosan is also a circular material, a byproduct of living creatures that does not need additional land and resources to create.
Many creatures that build chitin are ones we eat as seafood. The company sources it from discarded crab shells. Naturally, the company’s co-founder and CEO formerly worked as a fishing boat captain in Alaska.
Tidal Vision creates custom-formulated chitosan materials for vastly different industries and applications.
One application area where Tidal Vision is working is wastewater treatment. Some chitosan compounds are highly reactive, meaning that it attracts a range of pollutant particles. The company’s chitosan-based clean tech can treat water polluted with metals, phenols, antibiotics, and pesticides.
One factor bolstering chitosan’s demand potential is that the applications it can be used in are currently dominated by toxic, unsustainable chemicals. Cost-friendly, eco-friendly alternatives are needed to replace many hidden industrial chemicals that pass under the consumer’s radar.
For example, Tidal Vision has a chitosan-based replacement for flame retardant finishes, where high-performing biobased alternatives are still hard to come by. Most options on the market today are based on toxic halogen, phosphorus, and phosphorus-nitrogen. All come with high environmental and health risks.
The chitosan biomaterials industry is still in the early stages of scaling and Tidal Vision looks on track to becoming one of the leading Western producers. The US biotech tech company will use its $140 million Series B funds from early 2025 to expand production capacity. It is currently setting up new facilities in Europe, Texas, and Ohio.
Pulpex
This Scottish renewable packaging firm has a plant-based material that could replace plastic and glass bottles.
Its packaging material comes from wood pulp and the company currently works out of a R&D and pilot facility in Cambridge, England.
According to one Life Cycle Assessment cited by the National Wealth Fund, the Pulpex bottles have between 40-70% lower emissions than 33CL plastic bottles.
Notably, Pulpex gained the backing of two state-owned funds in its February 2025 Series D.
£43.5 million of Puplex’s February £62m Series D investment came from the National Wealth Fund, a private fund owned by the Treasury and which aims to drive growth in the UK economy.
Another £10 came from the Scottish Investment Bank, which is a Scottish state-owned investment and national development bank based in Edinburgh.
Interest in Pulpex from state-adjacent investment funds signal that governments see sustainable biomaterials as an pathway to a more robust economy despite the much-vaunted shift away from ESG in the private sector over the last three years.
The company itself is a collaboration between huge corporate players like Diageo, Unilever, PepsiCo, Estée Lauder and Kraft Heinz to find lower carbon alternatives to glass or plastic packaging.
The Series D capital will go towards building its first commercial bottle production facility near Glasgow, Scotland.
Bloom Biorenewables
Switzerland’s Bloom Biorenewables raised $15 million in April 2025. Like the other two major Q1 investment recipients, Bloom’s product portfolio does not just target one application.
The company specialises in modifying natural biological materials into a substitute for petroleum called lignin. Just like petroleum, this basic chemical holds a huge number of industrial uses. Lignin is a highly abundant substance found in the woody structures of plants, including tree bark. It’s what makes plants stand upright, gives tree bark it’s ‘woody’ feel, and gives vegetables their crunch.
Bloom currently markets three lignin-based materials – DPX, cellulose, and lignin. All three are potential biobased building blocks that can perform different functions in diverse industries and replace fossil-based chemicals.
Its DPX, short for dipropylxylose, is an industrial solvent useful for pharmaceuticals, paints and coatings, plastics and rubber and resins.
Solvents are any substance that can dissolve other chemicals to form mixes, called solutions. For many chemicals, water is a very effective solvent. For others, water is not very effective, which means other kinds of solvents are required.
In pharma, solvents are used for helping along chemical reactions, extraction, and purification of ingredients. In paint, the solvent ‘carries’ the pigment and gives it the right consistency for application.
Industrial solvents today are overwhelmingly made from oil, gas and other fossil sources. Bloom’s lignin solvents are a way of weaning production off of fossil derivatives and bringing down its carbon footprint.
Its lignin-based cellulose, meanwhile, is another industrial allrounder. Cellulose is the most abundant renewable biopolymer on earth and has a vast array of potential uses. Bloom is targeting its cellulose at the cosmetics (as a biobased thickening agent or emulsifier in creamy products) and nutraceutical markets (as a source of insoluble fibre)
Why investors are returning to biomaterials
- European regulation
One reason that investors are returning to biobased cleantech is that European regulations around industrial chemicals are tightening up. This is expected to drive up demand for less toxic and biodegradable alternatives.
For example, the EU is formulating new regulations to restrict so-called forever chemicals. This is a class of around 10, 000 non-biodegradable chemicals used throughout industry and which have been linked to cancer and ecological degradation.
The current effort to clamp down on these toxic chemicals began in January 2023 when Germany, the Netherlands, Denmark, Sweden, and Norway submitted a proposal to the European Chemicals Agency.
The countries called on the EU to restrict the manufacture, use and marketing of all PFAS under its regulation.
Following a scientific and technical consultation period, the EU is in the process of assessing what restrictions it may impose on an industry by industry basis. The European Commission is expected to issue a final opinion this year.
Forever chemicals are used in almost every industry, meaning high demand for substitutes if more regulation comes into force banning certain compounds. Biobased chemicals offer genuine alternatives. Cellulose-based materials, for example, could replace certain forever chemicals used in textiles and packaging.
- Big corporations take the leap
Big names are adopting biomaterials, which can encourage smaller companies to do the same.
For example, Hyosung – the world’s biggest spandex producer – invested $1 billion in a biobased spandex production site last year in Vietnam.
Last November, couture house Dior announced it would be incorporating a biobased polymer by Avantium in its packaging.
When assessing the health of the biomaterials market, the focus tends to fall on the big consumer-facing fashion and beauty brands. However, biobased options are also filtering through to the less visible world of essential commodities.
Biocarbon producer Vow Green Metals signed a supply agreement earlier this year with Outokumpu, the largest producer of stainless steel in Europe and the second largest in the Americas.
- Better technology, clearer vision
Biomaterials saw record capital flows at the peak of the COVID pandemic. On the one hand, this helped to push sustainable technologies into the limelight. Yet now that the dust of market exuberance has settled, investors are left with a more focused pool of tech and talent.
Over the last three years, producers have had the time to refine and refocus their products. The tech around today is simply better and more likely to scale.
Investors have had time to assess the market too, in order to identify technologies that will best maximise returns through high-volume orders from multiple sectors.
What all three of the big biomaterial investments of Q1 2025 share is the versatility of their technologies. The applications for Bloom’s biobased chemicals or Tidal Vision’s custom chitosan materials are not confined to just one industry. This kind of adaptability will appeal to investors as it is likely to maximise demand.
The biomaterial funding uptick shows that in spite of any short-term investment trends, the global shift away from fossil inputs will be an enduring theme in coming years.
