Regeneration.vc & how Dan came to work on climate

Regeneration.vc is an early-stage venture fund that specifically invests in founding teams who are reimagining consumer industries by using climate tech circular innovation. The fund operates across three verticals: design, use, and reuse. In the design vertical, Regeneration.vc invests in areas such as inputs, fabrics, dyes, packaging, ag tech, and aquaculture. The use vertical focuses on brands that leverage circular economy innovation, acting as showrooms for material science while also establishing competitive moats and protecting intellectual property. The reuse vertical covers investments in recommerce, reverse logistics, upcycling, and creating a sustainable production supply chain ecosystem.

Dan’s journey into climate investing stems from his background as a brand operator and investor in apparel lifestyle, women’s contemporary, celebrity brands, and food and beverage. Working in these industries allowed him to witness the lack of producer responsibility and the detrimental consequences of the constant cycle of production and consumption without considering the broader impact. This realization prompted him to reevaluate his priorities and allocate his time and capital towards areas that encompassed health, wellness, and the environment.

For Dan, climate investing goes beyond a mere passion or hobby; it has become an integral part of his life. Fortunately, today’s founders, particularly those from Generation Z, are also deeply engaged in addressing the climate challenge. This alignment of values and priorities between Dan and the younger generation further reinforced his decision to focus on climate investing and support the entrepreneurs dedicated to solving the greatest challenge of our time.

Jane’s background & how it led to Nature Coatings

Jane is an expert in dyes and pigments with over 20 years of experience. Her expertise primarily lies in the textile space, and she holds a master’s degree in textiles, which further solidified her knowledge and passion for the field. Her upbringing was also influential, as her mother was a weaver during her formative years, instilling a deep connection and passion for the industry within her.

As a serial entrepreneur, Jane previously owned a dye house in Los Angeles. The focus of her previous business was utilizing existing plant and insect-based dyes that had been in use for thousands of years. These dyes held a romantic allure, with historical significance dating back to King Tut’s tomb and the practices of civilizations like the Mayans and Navajo. However, Jane recognized that these traditional dyes lacked the necessary performance qualities required in today’s world. They faded quickly, were expensive, and consumed significant amounts of water.

Identifying an opportunity, Jane saw the demand for an alternative in the textile industry—a non-petroleum-based solution that was safer for both the environment and consumers. To address this need, she realized that she needed to design something better. This realization served as the impetus for the creation of Nature Coatings, where Jane is working to develop innovative coatings that offer improved performance while aligning with sustainable and eco-friendly principles.

Carbon black & why it’s a problem

Carbon black is the most widely used pigment globally, found in various everyday items such as keyboards, clothing, paint, food packaging, and even car steering wheels. However, the problem lies in how carbon black is produced.

Traditionally, carbon black is created by burning fossil fuels. The combustion process releases a significant amount of carbon dioxide into the atmosphere, contributing to climate change. In fact, the CO2 emissions resulting from fossil fuel combustion far exceed the amount of pigment generated. Moreover, this combustion process also produces harmful substances and carcinogens, including benzene, which poses health risks to individuals exposed to it. There are increasing regulations around these carcinogens, particularly in Europe and through initiatives like Prop 65 in California. However, regardless of regulations, the presence of such toxins in everyday products is a concerning and undesirable reality.

Jane strongly believes that a safer and better alternative to carbon black is necessary. She is determined to address this issue, considering the potential health and environmental impacts associated with its widespread use. By focusing on finding a sustainable and non-toxic replacement for carbon black, Nature Coatings aims to offer a solution that can be utilized in various industries, ensuring a safer and more sustainable future for consumers and the planet.

How BioBlack is made & how it compares to carbon black

Nature Coatings’ flagship product, known as BioBlack, serves as a direct substitute for petroleum-based carbon black. Unlike its petroleum counterpart, BioBlack is derived from wood waste instead of petroleum feedstock. The wood waste used in BioBlack’s production is meticulously traced and sourced from sustainable origins, holding Forest Stewardship Council (FSC) certification. The waste is obtained from various industries such as paper, lumber, and pencil manufacturing, representing utilization of the residual byproducts.

Remarkably, an abundance of approximately 50 million tons of wood waste is generated annually in the United States alone. Currently, companies tend to incinerate this waste and dispose of the resulting ash in landfills. Nature Coatings capitalizes on this readily available and traceable wood waste as a clean and sustainable feedstock for BioBlack. Through a closed-loop manufacturing process, the wood waste is transformed into BioBlack with minimal CO2 emissions. Notably, BioBlack exhibits a net negative carbon footprint.

Equally important is the absence of identified carcinogens in BioBlack. By creating a product that is both environmentally friendly and free from harmful substances, Nature Coatings ensures that BioBlack can be seamlessly integrated as a direct replacement for carbon black. Users can effortlessly substitute traditional carbon black with BioBlack, reaping the benefits of its environmental and health advantages without compromising on functionality.

Dan’s perspective on why Nature Coatings is an attractive business

Having extensively explored the dye industry at Regeneration, Dan recognizes the omnipresence of carbon black and its potential for growth. With projected sales of $23 billion and a predicted annual growth rate of 10% by 2030, the carbon black market is thriving. However, there are supply shortages as a significant portion of carbon black is sourced from Russia and China.

Given the carcinogenic nature of carbon black, Regeneration has been actively seeking a suitable replacement. Throughout their research, they encountered various alternatives, but none met their business criteria. These alternatives had issues with color accuracy, significantly higher pricing, non-marketable inputs, or were even derived from unconventional sources such as human waste. Others focused on recycling existing carbon black, which still retained carcinogenic properties and failed to align with their sustainability goals.

During their exploration, Jane and Nature Coatings entered their ecosystem through an advisor named Christine. As Regeneration conducted due diligence, Nature Coatings started ticking all the boxes. From Jane as a capable founder to the product itself and conversations with customers in dye houses and brands, everything resonated positively. To solidify their confidence, Regeneration even tested Nature Coatings’ product on company sweatshirts and sweatpants during a retreat, resulting in a successful outcome. Ultimately, the alignment of Nature Coatings with Regeneration’s investment criteria led them to invest in the company and place their trust in Jane’s vision.

Resources Mentioned

• Nature Coatings
• Regeneration.vc

Connect with Jane Palmer & Dan Fishman

• Connect with Jane on LinkedIn
• Connect with Dan on LinkedIn

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