Every month, during a Coffee Break, we dive into the stories of EIC innovators and get a glimpse of the people behind EIC projects. Today’s guest is Karl Pärtel, co-founder of the cleantech startup RAIKU. Striving for the replacement of high-carbon emission packaging materials with harmless solutions for the environment – Karl will unveil the secret of RAIKU’s 100% natural packaging, alongside some other recent business developments, as the recent partnership with LVMH – Moët Hennessy Louis Vuitton. Finally, keep reading to dive into the Tallinn-based innovator’s vision for the future of the packaging industry.
Starting off from your idea of creating RAIKU, how did this first come to your mind?
RAIKU‘s product idea came from our co-founder Rain Randsberg, who has always been an inventor! From a wider perspective, the idea came from the fact that, since there are mainly very high carbon footprint materials on the market – such as plastics, paper or carton – packaging has severe environmental implications and creates waste which people do not properly or, at all, recycle (only 9% of plastics are being recycled globally).
The concept of RAIKU came from the idea of creating a safe and harmless packaging material that could be 100% natural and compostable. As no chemicals or additives are used in the process, our packaging decomposes wherever it ends up in a matter of weeks, becoming nutrient for the soil. Based on the results of our Life Cycle Analysis assessment (LCA), RAIKU is the lowest carbon footprint packaging material on the market – also highly scalable.
Let’s now focus on RAIKU’s novel material: what is the secret behind its significantly lower carbon footprint, compared to other alternatives in the market?
Using only one raw material – wood – we need so much less resources than competing technologies and, thanks to the spring structure, we are able to give 15-20 times more volume to it. Essentially, we are making popcorn!
In addition to minimal raw material use, the water and energy use have even greater reduction. For example, compared to paper and carton, we need over 10 times less wood, water and energy to produce a similar amount of packaging. This means that the carbon footprint of our novel material is also ca 10 times lower than the one paper and carton packaging have.
Which are RAIKU’s core values and how are these reflected in its final product, delivered to the clients?
RAIKU builds on 3 main pillars: 100% compostability and low CO2 production, luxurious and beautiful looks of its materials – that increase brand value – and excellent shock absorption, also crucial for shipping goods around the world.
We want to provide an affordable packaging material that protects the goods, but also has additional benefits such as aesthetics and sustainability – a new packaging material for the next generation! Different clients value different pillars, but overall the feedback has been – globally – very positive, with hundreds of companies showing interest into our material.
One of your most recent achievements was the partnership with LVMH – Moët Hennessy Louis Vuitton, following your selection for the LVMH Business Accelerator Program. Can you tell us more about your expectations from this collaboration?
With 75 brands under their group and a turnover of € 85 billion, LVMH is the largest luxury goods conglomerate in the world. All of its brands are globally recognised and ship worldwide, which would translate into mass adoption of our packaging.
However, we are also very glad to be in the LVMH Business Accelerator Program for the opportunity to receive valuable mentorship, meet with brands and understand the culture and how business works in this sector: while these 75 brands are under LVMH group, every brand has its own identity, strategy and people – it’s fascinating and we are learning a lot through the programme.
Looking at RAIKU’s innovation journey, which are the major challenges the start-up has encountered? How did the European Innovation Council support help in this regard?
Funding is always critical when starting a hardware company and trying to develop a new technology from scratch, with one of the founders who already has to look into the next funding opportunity – even when a round was just closed.
The EIC Accelerator grant has made a tremendous difference in our case: it was not just about the funding we received – instrumental for finalising our development and setting up factories – but also about the general support received by its team. This included: industry experts, multiple valuable business trips around the world, mentoring and consultancy, market understanding, IP support, connecting with investors and providing a validation stamp proving that our technology is strategic for a better future.
The second major challenge has been technology development itself, putting a team together and working in unison. There are a lot of unknowns, prototypes and testing – technology development takes more time than you think: it could take years, or even decades, in some cases. There are no quick gains when developing novel technologies, it’s a marathon, but there is also a lot of learning involved.
What advice would you give to people who are currently thinking about launching a cleantech startup?
Just go for it. There has never ever been a better time to start a company, thanks to so many support mechanisms, organisations and people out there who can support your journey. From the cleantech point of view, Europe and the world have significant goals to achieve: the climate-related goals set for the decades to come will require all industries to have reduced their CO2 emissions by at least 55% by 2030 and achieve carbon neutrality by 2050.
Billions are flowing into this industry, thanks to the support of governments and the private sector to facilitate the achievement of these goals, making cleantech/hardware development much easier and faster than it was before the Green Deal. Conversely, as new rules are agreed obliging companies to become more accountable for their environmental impact, traditional and polluting industries are already becoming less competitive.
When you think about the future of the packaging industry, what is the picture that comes to your mind?
Let’s take Europe, which is doing relatively well in the world: its goal is a 70% recycling rate of packaging waste by 2030. It still means 30 million tons of packaging waste every year not being recycled – to make a comparison, a Giza pyramid weights around 5 million tons. While we will surely have this problem for decades to come, we are going in the right direction: better recycling systems are coming into use and we can see that ‘garbage’ is starting to be valued as a resource.
What I foresee – based on hints by new European packaging regulation – is that we will have a mix of recyclability and compostability, depending on product life cycle and use. One example is a limit to void space in packaging to minimise the packaging material related to the actual product inside – I really like this new approach! A full Life Cycle Analysis should also be considered to understand the real footprint of the materials and avoid greenwashing.
Finally, I really support novel materials and hope there will be many more start-ups in this sector, because current packaging materials are too resource-intensive. There are multiple options already on the table – from wool to algae to mycelium: they just need proper support in finding their place in the market against already existing and entrenched companies.
You were recently present at GITEX Global 2024, one of the world’s largest technology fairs, as one of the 15 EIC companies selected to exhibit under the EU Pavilion with the EIC International Trade Fairs Programme. Are you planning an expansion in the Middle East? Tell us a bit about your plans!
GITEX was a perfect place to understand whether our solution has a market interest in the region. Our booth was really hectic: we will have multiple material tests in the upcoming weeks, along with investor follow-ups.
As for the upcoming steps, once the market traction has been confirmed, we will start shipping our products to the first clients in the region. Dubai and some other locations in the region have 3 times higher purchasing power than in average in Europe, and they are investing heavily in innovation – it is definitely a market to consider for European companies.
About RAIKU
RAIKU, co-founded by Karl Pärtel and Rain Randsberg, is dedicated to the production of 100% compostable packaging to substitute single-use plastic wrapping. Its novel material is 100% natural and is nutrient for the soil after use. Supported by the EIC Accelerator, RAIKU is pioneering the future of packaging, turning the focus on transparency with respect to carbon footprint and resource intensity.
Learn more about RAIKU by visiting the Horizon Europe database and the company official website.
DISCLAIMER: This information is provided in the interest of knowledge sharing and should not be interpreted as the official view of the European Commission, or any other organisation.