Dallas-based alternative investment firm NexPoint Capital has invested $2 million in an early growth funding round of PlantSwitch, a bioplastics manufacturing company that was founded in Dallas before relocating to Sanford, North Carolina.

PlantSwitch has a carbon negative production process that upcycles agricultural waste to produce biodegradable and compostable resins for single-use products. The investment is part of a total $7.7 million raise in this early fundraise round, to which other institutional investors, along with NexPoint, subscribed.

PlantSwitch also recently received a $4.94 million federal grant from the U.S. Department of Agriculture.

“Having institutional backing is a huge step for PlantSwitch,” PlantSwitch co-founder and CEO Dillon Baxter said in a statement. “With this and other investments from our early growth funding round, we’ll be able to continue to scale our business and deliver sustainable and biodegradable bioplastics to our eager future clients. There’s so much that makes PlantSwitch unique, and funding from institutional investors like NexPoint show that they believe in the company as much as we do.”

PlantSwitch aims “to replace all petroleum-based single-use plastic with plants” by manufacturing and distributing its compostable bioplastic resin. PlantSwitch’s manufacturing process uses agricultural waste products such as rice husks, wheat straw, and other cellulose rich byproducts in combination with a polymer to make sustainable bioplastics while upcycling agricultural waste.

PlantSwitch’s bioplastics are ‘cheaper to produce and more compostable’ than alternatives

PlantSwitch Cutlery [Photo: PlantSwitch]

Dallas Innovates told you about PlantSwitch’s process last year.

Along with its carbon-negative production process, PlantSwitch’s bioplastics are cheaper to produce and more compostable than comparable bioplastics, the company said.

PlantSwitch, which was founded in 2020 by SMU graduates Baxter and Maxime Blandin, recently closed on a 52,000-square-foot manufacturing facility in Sanford that will increase its production capacity.

NexPoint said it identified PlantSwitch at this early stage by leveraging its research capabilities and extensive network, and its investment demonstrates NexPoint’s continued commitment to environmentally sustainable investment standards and support of early-stage companies with uncorrelated potential.

The firm’s investment, and this fundraise in general, will help PlantSwitch continue to scale its production capacity, increase its marketing capabilities, and help deliver products to existing and future customers.

PlantSwitch Cutlery [Image: PlantSwitch]

PlantSwitch said it recently entered framework contracts with several nationwide restaurant and grocery store chains that it will begin supplying as early as next month.

As PlantSwitch scales, its founders expect growing its full-time workforce to more than 50 employees by the end of 2024 and anticipate needing additional manufacturing space in the next few years.

“At NexPoint, we are always looking to support companies that do important work, and offer attractive opportunities for growth,” Scott Johnson, managing director & portfolio manager at NexPoint Capital, said in a statement. “PlantSwitch certainly fits that bill and represents an investment that aligns with our values and expertise in Climate Tech businesses.”

Baxter said bioplastics is a growing business sector.

“Some studies forecast bioplastic demand increasing from 4.9 billion pounds in 2022 to almost 13.9 billion pounds in 2027,” Baxter said. “With that kind of demand increase, PlantSwitch’s biggest priority is sustainable growth. We’re confident that our product, our supporters like NexPoint, and our distinguished board can help PlantSwitch scale in a deliberate way that allows us to take advantage of demand conditions.”

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