Novoloop recycled plastic moves closer to production

Plastic recycling startup Novoloop has signed a deal with a major manufacturer to produce its recycled thermoplastic polyurethane on a commercial scale, TechCrunch has learned exclusively.

The deal helps Menlo Park-based Novoloop navigate the so-called “valley of death” that many climate tech startups must navigate.

Startups that rely on hardware are especially likely to stumble in the valley, the dreaded moment when they’ve proven their initial technology and haven’t generated enough revenue selling their product.

Under the terms of the agreement, Novoloop will supply Huide Science and Technology with a chemical element used to manufacture thermoplastic polyurethane. Novoloop makes this material, known as polyol, from post-consumer polyethylene waste like plastic bags, one of the hardest materials to recycle.

Thermoplastic polyurethanes, or TPUs, are a type of plastic used in everything from running shoes to medical devices.

“For this product line, we basically realized what the business relationship would be,” Miranda Wang, co-founder and CEO of Novoloop, told TechCrunch.

At this point, Novoloop is limited in its ability to supply polyols, Wang said. Earlier this year in India, the startup commissioned its demonstration plant, capable of producing tens of tons of 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 to Novoloop’s progress, Wang said. “The biggest barrier to profitability is economies of scale,” she said. “Next year the focus will be on closing a lot of these customer contracts so we can finance the (commercial-scale) installations.”

Once deals and financing are finalized, Novoloop hopes to have its commercial factory operational by early 2028, Wang said. The first version is expected to be able to supply enough polyols to produce around 16,000 tonnes of TPU per year.

“When we can process materials at these kinds of volumes, we hope we can be at price parity with virgin TPU,” she said.