Spinnova CEO Janne Poranen said the Finnish fiber startup will invest $2.45 million in an in-house yarn spinning facility for research and development this year.
In a Nutshell: Spinnova, whose technology makes textile fiber out of wood or waste from leather, textile or food without harmful chemicals, reported strong revenue gains on continued losses as it invests and scales up its business.
The company, which said investments in 2021 totaled 4.37 million euros ($4.87 million), after investing 3.67 million euros ($4.09 million) in 2020, offered an outlook for 2022. Spinnova said medium-term business targets set in June are to achieve 150,000 tons of production capacity, to be earnings before interest and taxes (EBIT) positive and amass up to 20 brand partners.
“Our brand vision is to be a leading ingredient brand in sustainable textiles and applicable materials–the Gore-Tex of sustainability,” CEO Janne Poranen said in a webcast. “We produce the most sustainable textile materials in the world for the benefit of the environment and humanity.”
The company said an initial public offering financing raised in the summer plays an important part in securing its growth plan. In 2022, the main focus is on completing its Woodspin factory on time, piloting with Respin and continuing brand collaborations to introduce more commercial Spinnova products.
Poranen said that a Woodspin factory joint venture with Suzano will include fiber production, Suzano Finland’s micro-fibrillated cellulose refining, as well as Spinnova’s headquarters.
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Spinnova expects to complete the building of the first Woodspin factory on time and for it to be operational at the end of 2022. Spinnova expects to continue to launch commercial products with its brand partners.
Spinnova said its target market is growing and the demand for sustainable textile materials is strong. Poranen noted that in September, Spinnova announced that The North Face became a brand partner, joining existing brand partners Adidas, the H&M Group, Bergans, Bestseller, Ecco, Icebreaker and Marimekko. The patented Spinnova fiber creates zero waste without side streams or microplastics, and produces minimal CO2 emissions and water use. Spinnova materials are quickly biodegradable and circular.
To expand outside the apparel and footwear sector, in November, Spinnova entered the composites market, introducing alpine skis made with Spinnova material in collaboration with Finnish woodcore ski manufacturer, PUSU Skis.
During 2022, Spinnova’s revenues are expected to grow in comparison to 2021, driven primarily by higher technology sales of the project deliveries to Woodspin and Respin. During 2022, while Spinnova focuses on investing in growth and production scaling, the company is not expected to be profitable.
“The cool part is that we can take the fabric we are producing back to the production process–call it recycling or upcycling–and we are able to spin new Spinnova fiber, without losing any quality,” Poranen said. “And that is the Holy Grail of the textile industry.”
Sales: Revenue in the second half of 2021 ended Dec. 31 grew to 5.66 million euros ($6.31 million) from 168,000 euros ($190,000) in the prior-year period.
For the year, revenue increased to 6.06 million euros ($6.76 million) from 254,000 euros ($280,000) in 2020.
Earnings: In the July to December period, Spinnova recorded an operating loss of 4.08 million euros ($4.55 million) compared to a loss of 3.48 million euros ($3.88 million) a year earlier.
For the year, the company posted a loss of 7.17 million euros ($7.99 million) versus a loss of 5.47 million euros ($6.1 million) in the prior year.
CEO’s Take: “Spinnova reached many big milestones in 2021 as we delivered against our strategy. In the second half, our main scaling priority–the building the first commercial scale factory for the Woodspin joint venture, proceeded according to plan,” Poranen said. “The factory construction in Finland is expected to be ready for technology installations by the end of the summer and the factory to be completed by the end of the year…This is a great step in the joint commitment with Suzano to reach 1 million tons of Spinnova fiber annual production capacity within 10 to 12 years.”
“We also finished building a pilot production line in Finland in December as planned for Respin, our joint venture with ECCO’s leather partner KT Trading,” Poranen added. “Respin has now begun working toward commercializing the disruptively circular Spinnova leather waste fiber…Extending our technology to this waste-based raw material is a great example of the uniqueness of our innovation and technology…To support the commercialization of Spinnova fibers, we have decided to make an estimated 2.2 million-euro ($2.45 million) investment in an in-house yarn spinning facility for research and development purposes. This will streamline Spinnova’s commercial textile development, enhance brand collaborations, and further improve our market entry capabilities.”