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Startup of the Month: BioElements (Chile)

PackTech Ventures - Newsletter #1 - November 2022

Credit: BioElements

The Chilean startup BioElements was founded in 2014 by José Ignacio Parada, a lawyer graduated from the Catholic University of Chile, who was initially looking for a solution to avoid the use of plastic bottles. Thanks to a resin called Bio-E8, which was developed by its Research & Development (R&D) team and made available for commercialization in 2016, today BioElements delivers an ecological and sustainable alternative to conventional plastic, making products for daily use that are biodegradable: in 6 months, it can be used for composting; between 16 and 20 months, it is biodegraded in a landfill; and between 15 and 20 months, it is biodegraded in the environment.

Biodegradable Packaging for Delivery. Credit: BioElements/LABS

The company's first products were rigid, such as compostable cutlery and food delivery cups. Currently, its product portfolio includes bio bags (with security seals for e-Commerce), biofilm-based packaging for industry, and mulch for the Agro sector. The company serves more than 35 clients, including Mercado Libre, Adidas, Falabella, Sodimac, and Privália, and is present in 8 countries - the USA, Mexico (which accounted for 30% of the startup's revenue in 2020 and expects to reach 60% in this year), Colombia, Puerto Rico, Chile, Paraguay, El Salvador, and, as of this year, Brazil.

Biodegradable Packaging for Mercado Libre e-Commerce in Chile.

Credit: BioElements/LABS

According to an interview given in 2021 to the LABS portal, BioElements continues to reinvest a good part of its revenue in R&D and seeks to triple its size and reach US$ 100 million in sales, with a revenue forecast for 2022 of US$ 40 million. The startup had an R&D budget of nearly $1.2 million in 2021, and it planned to apply that to developing bio resin for bottles and flexible packaging intended for food-contact products like cheese and ham, for example. This investment in R&D corresponds to 3% of its revenue, double what the Food & Beverage sector traditionally invests in Innovation according to OECD data.

Also in that same interview, José Ignacio Parada stated that BioElements did not need to raise funds in 2021, as the company has positive EBITDA. “We have always had positive cash flow. We've always made money, that's why we're going to invest not only in R&D, but also in the company.” Still, it prospected a Series A* round of investment in 2022. The company has been hiring people for the commercial and operations areas, and product development. Recently, it started a new line of business called NBO (New Business Opportunities), dedicated to the development of products demanded by customers.

*Note: The Series A round of investments traditionally raises up to US$2 million, with the assignment of up to 16.7% of the company's equity interest to the investor (which can be an investment fund), with a capital "burn rate" of up to US$ 150,000 per month, and which maintains the operation for up to 13 months.

Learn more about BioElements by visiting the website:

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