Plastics recycling startup Novolup has signed a deal with a major manufacturer to produce upcycled thermoplastic polyurethane at commercial scale, TechCrunch has learned exclusively.
The agreement will help Menlo Park-based Novoloop break through the “valley of death” that many climate change technology startups struggle to navigate.
Startups that rely on hardware are especially prone to stumbling into the trough, the dreaded moment when an initial technology is proven but not enough revenue is generated from product sales.
Under the terms of the agreement, Novolup will supply Heude Science & Technology with chemical building blocks used in the production of thermoplastic polyurethanes. Novolup makes this material, known as polyol, from post-consumer polyethylene waste, such as plastic bags, which is one of the most difficult materials to recycle.
Thermoplastic polyurethane (TPU) is a type of plastic used in everything from running shoes to medical equipment.
“With this product line, we’ve basically achieved what amounts to a commercial relationship,” Novoloop co-founder and CEO Miranda Wang told TechCrunch.
At this time, Novolup is limited in its ability to supply polyols, Wang said. Earlier this year, the company commissioned a demonstration plant in India that can produce dozens of tons of material per year.
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The demonstration plant’s production capacity is sufficient to produce enough TPU for “major pilot projects,” including one for a footwear customer that will be announced in the coming months, Wang said. Previously, Novoloop supplied Swiss shoemaker On with lifecycle materials for the tread of its Cloudprime sneakers.
Deals like the one with Huide will be key to Novoloop’s progress, Wang said. “The biggest hurdle to profitability is economies of scale,” she says. “A lot of our focus next year is going to be closing a lot of deals with these customers so we can fund (commercial-scale) facilities.”
Once the deal and financing are in place, Novolup plans to start operating the commercial plant in early 2028, Wang said. The first version should be able to supply enough polyol to produce around 16,000 tons of TPU per year.
“If we can run the material in these kinds of volumes, we would expect it to be comparable in price to virgin TPU,” she said.
