Finnish biotech startup secures €2M Pre-A funding for innovative eco-friendly chemicals from forest sidestreams

Espoo-based startup Montinutra, now rebranded as Boreal Bioproducts, has successfully raised €2 million in pre-A funding. This investment round, led by Metsä Spring and private investors, is set to propel Boreal Bioproducts’ pioneering efforts in the transformation of forest industry sidestreams into sustainable, high-value biochemicals. The company’s mission is to replace traditional fossil-based products in the chemical and cosmetics sectors with eco-friendly alternatives.

Boreal Bioproducts aims to leverage this financial backing to expedite their international expansion, establish an industrial demo production plant, and introduce an array of new, environmentally friendly products. Their innovative approach centers on harnessing underutilized sidestreams, specifically hemicellulose and lignin extracts, to create vegan, non-GMO, and biodegradable solutions. These products boast a significantly lower carbon footprint compared to conventional fossil-based chemicals, making them a sustainable choice for a variety of industries.

The company’s vision is to make substantial contributions to carbon emissions reduction and provide bio-based alternatives for diverse industries. With a focus on the development of biochemicals from forestry sidestreams, such as hemicellulose and lignin extracts, Boreal Bioproducts is well-positioned to make a significant impact in sectors like cosmetics, chemistry, and food.

Founded in 2018, the company is on a mission to replace fossil-based alternatives in the chemical and cosmetics industries with natural, sustainable alternatives. The funding will accelerate their internationalization efforts, advance the construction of an industrial demo production plant, and introduce new products under the Boreal Bioproducts® brand. Their goal is to achieve an annual revenue of 100 million euros by 2035, with the demo plant operational by 2026.

“Forest industry sidestreams – such as sawdust, bark, or plywood processing residues – are currently hugely undervalued as raw materials, and are often burned for heat and energy. Traditionally, the focus has also been on the utilization of cellulose from wood, but the possibility of utilizing the rest of the wood, namely hemicellulose and lignin, which make up over 50% of wood content, has been limited. We enable the broader utilization of hemicellulose and lignin extracts by developing biochemicals out of them. This is how we turn these previously underused sidestreams into mainstream materials and increase the value of the raw material in multiples,” says Jaakko Pajunen, Managing Director of Montinutra.

Boreal Bioproducts, with its innovative and eco-friendly production process based on pressurized hot water extraction, is poised to significantly reduce the carbon footprint in the chemical and cosmetics industries. Their scalable technology, utilizing forest industry sidestreams that don’t compete with food cultivation, ensures a stable and sustainable supply, aligning with global emission reduction targets and supporting the transition to bio-based materials.

“Solutions that use natural resources responsibly and reduce carbon emissions are much needed, not just for reaching global emission reduction targets, but also for helping different industries in their transformations from fossil-based to bio-based materials. Montinutra helps their customers in this and aims to build a new industry in Finland that combines bio-economy, sidestreams, and added value,” says Katariina Kemppainen, SVP, Group R&D at Metsä Group.

Boreal Bioproducts is set to tap into lucrative global markets worth billions by offering versatile ingredients for various applications. Their natural alternatives for the adhesive market, valued at approximately $60 billion annually, aim to provide safer alternatives to formaldehyde-based adhesives. Additionally, their lignin and phenolic products, such as SpruceGlue™, offer eco-friendly replacements. In the cosmetics industry, the company provides multifunctional ingredients, including film formation, natural color, SPF enhancement, dispersants, and co-emulsifiers, contributing to personal care product innovation. The company is currently planning a unique demo plant, set to be operational by 2026 in Vilppula, Finland, to upcycle forest industry sidestreams.

Boreal Bioproducts has also announced a partnership to incorporate their SpruceSugar™ product into personal care items, produced at their current pilot plant in Turku, Finland. With these initiatives, Boreal Bioproducts is poised to make a significant impact on various industries, offering eco-friendly, sustainable alternatives to traditional chemical and cosmetic products.

Click to read more funding news.