We spoke to Ian Brown, Director of Chestnut Bio, about how the company is finalising its Seed investment round to fund the commercial scale up of the business in 2024.

Please tell us about your business, Chestnut Bio

Chestnut Bio is the trading name of Chestnut Natural Capital Limited. We are a formulations business based in the North East that works with a wide range of businesses to help them transition from using damaging, oil based plastics to a plant-based, compostable, biodegradable material that’s more environmentally sustainable and non-polluting.

Originally an R&D business focused on how to eliminate single use plastic in the world of forestry, we’ve now expanded to focus on removing fossil plastic use within injection molding, sheet extrusion, and filament extrusion verticals where a bio-based biodegradable alternative material is a preferred option. Some of our commercial deals have included coat hangers, 3D printing reels, cable ties, electrical conductive packaging for circuit boards, and tree guards.

What led you to explore investment funding for your business?

When the company was first established in 2019, we were successful in securing an Innovate UK Smart Grant. A requirement of the grant was to deliver 30% match funding, which was brought into the business by its founders.

In order to grow the business, we’re now looking to raise £1m over the next 12 months to support the scaling of the formulation and testing center in the North East and drive the business through to profitability. Chestnut Bio is approved for the UK government’s Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) to leverage investment funding.

What stage are you at in your investment journey?

Using the positive reputation and profile of the business, which has been bolstered by recent award wins including The Startup Award at the Startup Awards North East (organised by FIRST) and Sustainable Innovation of the Year at the North East Innovation Awards (organised by Innovation SuperNetwork), we’re talking to a wide range of investors to raise the additional funding we needs to grow the business.

How will Chestnut Bio benefit from investors coming on board?

The diversity of thinking offered by investors can support the future growth and success of the business. It doesn't always make for easy meetings with investors, but does make for sound thinking and sound planning.

It's a little bit like job interviews; you know you don't get them all. There's always learning, and if the fit isn't right then that's fine. There are always positives that come from any conversation.

Investors recognise trends, and they can easily spot the things that mark out a successful company.

What does the future hold for Chestnut Bio?

Our aim is to help businesses and regions transition to a bio economy. Our strapline is, ‘Made robustly…not to last’.

10% of all oil in the whole world goes into plastic, and persistent plastic is one of the biggest issues in the world - so it’s a global problem. The base ingredients of Chestnut Bio’s materials come from sugar, meaning it can break down into Biomass, C02 and water. We want to divert sugar from the food industry – which is damaging the health of the people across the world – and instead use it to create a plastic that removes the need for oil.

We want to create materials that are strong, do their job, and can be recycled or reused. And if the products do end up in the environment, they can disappear without causing any damage.

Find out more about investment funding, and other sources of funding available to businesses in the North East, by visiting the Finance and Funding Toolkit.