The Richmond, Virginia-based company raised $31.3 million in Series C financing led by Wheatsheaf Group, and included follow-on investments by existing shareholders Revolution Growth, Harbert Growth Partners, SJF Ventures, Arborview Capital, Tao Capital, Third Prime Capital and Greenhouse Capital.
The new funding gives TemperPack total investments of more than $78 million, co-founder and CEO Brian Powers told Crunchbase News. The total also includes a $22.5 million Series B round from January 2019, according to Crunchbase data.
TemperPack was founded in 2015 by Powers, Chief Product Officer James McGoff and Chief Technology Officer Charles Vincent to design and manufacture sustainable thermal insulation for home deliveries.
Its flagship product is the patented ClimaCell thermal liners that provide similar levels of thermal protection as expanded polystyrene foam (EPS)–what we know as Styrofoam®. Unlike EPS, ClimaCell, is plant-based, 100 percent curbside recyclable, and reduces carbon emissions, Powers said.
The company was planning to raise money toward the end of the year, but increased demand enabled TemperPack to do it sooner, Powers said.
“We were growing quickly prior to COVID-19, but that accelerated growth even further,” he added. “We thought momentum would wane, but our customers instead doubled down on not using Styrofoam.”
TemperPack’s ClimaCell product
The new funding will enable TemperPack to buy more equipment to boost manufacturing of ClimaCell, which in turn will increase market share in the food and life sciences markets and position the company for future growth in new regions and applications. In addition to Richmond, the company also has a facility in Las Vegas and plans to expand in Europe, eventually building out a facility there in a few years, Powers said.
In the past 18 months, the company has brought on new customers, such as Illumina and UPS Healthcare, and expanded its life sciences capabilities to ship insulin, diagnostic tests kits and biologic medicines, such as vaccines. As a result of the growth, Powers expects to add about 80 people to its employee base of 220 in the next 12 months.
What investors are saying
This is Revolution Growth’s second investment in TemperPack. The fund, which is part of VC firm Revolution, was also involved in the startup’s Series B last year. Part of the reason the investment came together was due to COVID-19 acting to accelerate trends, Todd Klein, partner at Revolution Growth, said in an interview.
The global pandemic gave TemperPack something to lean into and take advantage of, he said.
“There is a shift in direct-to-consumer, and so much is being delivered online, especially food and medicines, and this is where TemperPack focuses,” he added. “People are getting more discerning to do business with those who are more transparent about how they make products and are willing to invest in a brand that is familiar.”
Meanwhile, Katrin Burt, executive director at Wheatsheaf Group, said in a written statement that TemperPack was poised for long-term growth because it delivers on a product that is comparable to EPS, but is sustainable.
“There is significant opportunity within its core food and life sciences markets in the US and globally, and we expect the ClimaCell technology will allow it to compete in other markets where Styrofoam® is the incumbent material,” she said.
Next up, the company will build out its capacity in both Las Vegas and Richmond to meet the “overwhelming levels of demand in the pipeline,” Powers said.
Powers also wants the company to continue being a thought leader with customers regarding sustainability and plastic waste. The company has already eliminated 10 million pounds of plastic waste from landfills, and plans to continue making a dent, he said.
“There are a wealth of opportunities out there to replace plastics with things that don’t cost much more,” Powers said. “We will continue to grow in the life sciences area, working with a dozen pharmaceutical partners and also see a lot of rising demand from e-commerce food companies.”