This Entrepreneur Raised $125 Million To Develop And Manufacture Compostable Packaging Solutions For The Food And Fashion Industries

In an era when environmental concerns are more pressing than ever, Daphna Nissenbaum is a shining example of how passion and determination can spark innovative solutions. She is the CEO of TIPA Compostable Packaging, a company dedicated to solving the world’s plastic pollution.

In this in-depth conversation, Daphna talks about developing an idea and raising funding for it despite not having expertise in a segment that isn’t known for attracting investor backing.

She also talks about her success in building a business with a globally distributed team and reshaping how we think about sustainability.

Listen to the full podcast episode and review the transcript here.

Growing Up In Tel Aviv and Learning Discipline in the Army

Daphna’s journey began in the vibrant region of Tel Aviv, where she was raised in a nurturing environment that encouraged curiosity and creativity. From an early age, her affinity for mathematics and computer science set the stage for her future endeavors.

After completing her studies, Daphna gained diverse experiences in computer science, economics, and marketing, mixing them up with entrepreneurship. At 18, like all young people in Israel, Daphna joined the Army.

She had been aiming to go to the computer science space and develop computer software for the Army. Thus, she successfully entered a prestigious but long program.

Daphna was designated to develop specific systems for the Navy, where she learned a lot about the brand, particularly the technological side. This experience instilled in her the practice of being in a disciplined system and building something from nothing, creating ideas out of the box.

Daphna would carry this inspirational educational and spiritual experience into her future business career. After leaving the Army, she worked in the computer science industry for several years, taking different jobs and positions across various countries.

Daphna also went on to earn an MBA. Her first career change was entering the financial markets. She worked as the CEO of a research center on capital markets, particularly risk management in capital markets. She recalls enjoying the experience thoroughly and learning a lot.

However, the desire to create and practice a business lingered in the background. Daphna was keenly inspired by her father, who ran his local business, and her husband, who built two successful companies and later was in the virtual venture capital business.

The Genesis of a Vision

Daphna had been reading about several researchers and their take on how new great ideas are born and what to look for in new ideas. Eventually, she understood that the most significant ideas are all around us, and we just have to open our eyes to identify what can change our lives.

Daphna’s “aha” moment came during a casual conversation with her children about the environmental impact of plastic bottles. This simple discussion sparked a profound reflection on the urgent plastic problem and the lack of any imminent changes in the industry.

During her morning jogs, Daphna contemplated nature’s ingenious way of packaging, where even an apple’s remnants biodegrade into compost. The plastic problem seems to grow dramatically and ends up in the sea, causing immense damage worldwide.

Daphna started to think–Why couldn’t we replicate a more intuitive way to use in our packaging materials? This pivotal moment crystallized into a mission: to develop packaging that mimics nature’s processes—packaging that is not only functional but also sustainable.

The idea was to treat packaging exactly as we treat–say, a banana peel–all organic materials. We need a package that can be thrown into the organic waste bin after consumption instead of a conventional plastic package that lasts forever, whether 400 or 500 years.

It should turn into an organic material within a very short time–simulating nature. However, Daphna was not a plastic engineer or chemist and did not have a background in materials. Undeterred, she started investigating, bringing in her partner to develop solutions.

Navigating the Challenges of Innovation

With a groundbreaking idea in hand but lacking expertise in material science, Daphna faced significant hurdles. Rather than deter her, these challenges fueled her resolve. She recognized that her journey would be a long one and one that needed inventing new packaging materials.

Daphna identified two core factors–firstly, the packaging should protect the food effectively. Secondly–actual recycling hardly ever works in terms of the percentages of plastic produced and discarded. Further, the packaged food industry is not only huge, but it is also segmented.

That’s when Daphna decided to focus on flexible or soft packaging, which is very thin and similar to nature’s packages. This packaging would be used for fresh produce, snacks, granola bars, and more.

Current packaging used a blend of polymers that were nearly impossible to recycle. So, Daphna sought partnerships with scientists and experts, diving deep into the world of biodegradable materials.

The TIPA Business Model

TIPA has essentially invented IP-protected new materials. Further, Daphna also learned how to process the materials throughout the supply chain of conventional plastic.

The objective was to create a solution that could seamlessly integrate into existing plastic manufacturing facilities and processes without requiring new machinery. Today, TIPA films are made in five facilities globally.

TIPA’s focus on flexible packaging was strategic because these materials eliminate a significant challenge of recycling. This approach not only lowered the barrier to entry for producers but also accelerated the adoption of sustainable packaging solutions.

The Fundraising Journey

Raising capital for TIPA was no easy feat, especially as a newcomer to the industry with a software background and no science experience. Daphna’s journey began with early-stage money raised from friends and family who believed in her vision and capabilities.

However, as Daphna sought broader investment, she encountered skepticism. Many investors were focused on more traditional tech sectors, leaving her to navigate a challenging landscape. Despite initial setbacks, TIPA got funding from an Israeli-Canadian fund.

Daphna’s ability to communicate TIPA’s vision resonated with a growing number of investors who recognized the urgent need for sustainable alternatives. Over time, she successfully raised approximately $125M, attracting a diverse range of investors interested in sustainability.

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The funding was crucial in scaling TIPA’s operations and reaching a global audience. The company now has teams in Australia, Europe, and North America, demonstrating rapid growth.

Daphna reveals how timing was crucial to her fundraising success. The investment environment was very good at that time, and TIPA managed to bring significant investors on board. Even so, she went through her share of rejections and time-consuming due diligence before being turned down.

Vision for Tomorrow’s World

As she reflects on the past 12 years of TIPA, Daphna emphasizes the importance of sticking to one’s vision and making decisions based on what is right for the planet and future generations. TIPA is a beacon of hope in a world grappling with climate change and plastic pollution.

Daphna envisions a world where nature can recover and be in a better place. Pushing TIPA’s initiative has been a transition to the consciousness and mindset around climate change. But when it started out, there wasn’t any awareness of the magnitude of the problem.

Although countries like China, the UK, and others started to work against conventional plastic, these efforts took a backstage during COVID-19. Daphna points out that companies don’t want to take the first step in changing packaging since it impacts their bottom line.

But big companies are now working on alternatives to plastic. More than the governments, it’s the people, brands, supermarkets, and retailers who are working to reduce their use of plastic.

Daphna reminds us that the initial global goal was to transform all packaging into recyclable, compostable, or reusable material by 2023. However, this deadline has been pushed to 2030 because people need to find solutions that go beyond recycling, which is just not effective.

As Daphna sees it, demand will increase over the next couple of years, which is a promising start for TIPA. Sustainability is changing the fundamentals of how we live, and it’s our future. We need to invest in ourselves, our lives, and our minds.

In retrospect, Daphna would have acted faster and relied on her gut feeling. She advises founders to believe in themselves and their vision and stick to it regardless of what others say. Although she had advisors and listened to their suggestions, she eventually made her decisions.

Daphna’s decisions have always been driven by what’s right for the company and the vision. “Don’t be too suspicious about your gut’s feelings,” she says.

Lessons Learned and Vision for the Future

Throughout her journey, Daphna learned invaluable lessons about resilience and the power of belief. Today, TIPA stands as proof of Daphna’s vision and dedication.

With a team that spans the globe and a commitment to innovation, the company is well-positioned to lead the way in sustainable packaging solutions.

Daphna envisions a future where packaging materials no longer leave a harmful footprint on our planet. Instead, they return to the earth, enriching it rather than polluting it.

Daphna’s relentless pursuit of sustainable solutions encourages all of us to rethink our consumption habits and consider the impact of our choices. As we move forward, let us embrace her vision of a cleaner, greener world—one compostable package at a time.

Listen to the full podcast episode to know more, including:

• Daphna Nissenbaum’s journey from tech to sustainable packaging was ignited by a conversation with her children about plastic waste.
• TIPA focuses on creating compostable flexible packaging, addressing the challenges of conventional plastic recycling.
• Daphna’s background in computer science and finance equipped her with diverse skills to tackle the complexities of material innovation.
• Raising $125M in funding was a significant achievement, highlighting the growing investor interest in sustainability.
• The path to success included learning to embrace rejection and understanding that perseverance is essential in entrepreneurship.
• Daphna emphasizes the importance of believing in one’s vision and making decisions that prioritize environmental impact.
• TIPA aims to create a future where packaging materials disintegrate and biodegrade, enriching the earth rather than polluting it.

 

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