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Startup Series: Decarbonizing fashion with Rubi
Carbon-negative fabric made from carbon emissions
Today's guest is Neeka Mashouf, Co-founder and CEO of Rubi. Rubi is turning carbon emissions into carbon-negative textiles for the fashion industry. They are working on their first prototype, to provide a carbon-negative zero-water, zero-land alternative to viscose, to decarbonize the fashion industry supply chain.
We have a great discussion in this episode about Neeka's origin story and what it was that led to the founding of the company, which she did with her twin sister, Leila. We also cover the initial problem that they set out to solve, what it is that makes the fashion industry so hard to decarbonize, and where those emissions are coming from. We then get into how they landed on the approach that they did, where they are today, what the steps are to make it from the lab to wide-scale production, and what’s coming next.
Enjoy the show!
Jason Jacobs: Neeka, welcome to the show.
Neeka Mashouf: Thanks so much, Jason. I'm really excited to be here.
Jason Jacobs: I'm excited to have you. You were telling me before the show, your first podcast ever?
Neeka Mashouf: Yes. [laughs]. It's been fun so far, our first few minutes. [laughs].
Jason Jacobs: Amazing. Yeah. Well, I would say it's a tough act to follow, but it... But, uh, since it's the first ever, it'll be the best ever, no matter how it goes. [laughs].
Neeka Mashouf: [laughs]. Yeah. Yes. [laughs].
Jason Jacobs: [laughs]. Well, I was excited for- for this one. Uh, on the surface it, a story that's interesting on- on a number of- of fronts. One, you are a young entrepreneur. You- you started Rubi Labs with your twin sister. It is in an area that is a problem area from an emissions standpoint and in some other ways, as well. And you, have a potential solution that- that sounds pretty innovative and like it could have a big impact if it works. So... It's not an area that I know a lot about, but it's one that I'm really interested to learn more about. And, uh, and therefore, I'm grateful that you made the time to come on and share your story.
Neeka Mashouf: Yes. Amazing. I'm excited to walk through the whole world of Rubi. [laughs]. It's a fun one.
Jason Jacobs: Uh, great. Well, for starters, and- and should I say Rubi or Rubi Labs, by the way?
Neeka Mashouf: Rubi is good.
Jason Jacobs: Okay. Uh, well, what's Rubi?
Neeka Mashouf: Yes. Rubi focuses on decarbonizing supply chains, focused first on fashion. So we turn carbon emissions into carbon-negative materials, using a technology we've developed that's inspired by how trees work? So trees breathe in CO2, and then they turn that CO2 into all their useful components, the molecules. We take a similar approach, where we're able to, um, take CO2 and- and turn it into all the important molecules we use as a society for our most important products. Like cellulose, which we use for textiles. And so that's really our first chapter, is making textiles that are carbon-negative and water- and land-neutral using a completely new production process.
Jason Jacobs: If I think about a company like Twelve, for example, that's converting carbon into valuable, you know, car parts and- and other products like that. Is it similar, but pointed at- at apparel? Or, how should I think about Rubi? Like are- are you a... Are you a carbon-to-value company? Are you a fashion company? Like how- how would you characterize yourself? If... And if the answer is, "You can't put us in a box," that's okay. 'Cause, I mean,-
Neeka Mashouf: [laughs].
Jason Jacobs: ... I feel like that's my answer for a num... For like MCJ, like what are we? Well, you can't put us in a box. We're like some of this, and some of that. We're like a mashup.
Neeka Mashouf: Totally. [laughs]. Well, I- I would definitely say you can't put Rubi in a box. I think we have a really unique vision for the company that we hope to be. But maybe one of the closest things would be a carbon-to-value sort of company, where we're building a platform beyond just fashion, beyond just a first chapter in a certain market, that can turn CO2 into materials in a carbon-negative water and land-neutral way.
And I think the difference between us versus some other carbon-to-value companies, we have a unique technology that's powered by enzymes, which are, you know, nature's most powerful molecules, in my opinion. [laughs]. They're so cool. And they have so many benefits, that we love bridging our technology, that helps us achieve carbon-negativity and really high energy efficiency, low cost and be able to make natural products, which some of these other carbon-to-value technologies can't necessarily do, because of the type of technology they use. So we're focused on making nature-based molecule. So biomolecules that are found in nature, that we use really heavily as a planet today, as a carbon-based planet.
So there's a big potential market there. Enzymes help us get there, because they can make these complex products and molecules in a way that other tech can't. And that's what we're building Rubi, as a tech platform based on. It's a platform that can create really valuable, important products that today are produced in a really unsustainable, devastating way, through this process that can be symbiotic with the planet and planet-positive.
Jason Jacobs: I was going to ask you about the origin story of the company. But before we even go there, I mean, how... How did you go down this path to- to begin with? Uh, did it come from a planet motivation? Or a fashion motivation? Or entrepreneurship motivation, or... Yeah. I guess, what... How did you find yourself? Like share a bit about your personal story, and then we'll get into the origin story for the company.
Neeka Mashouf: Perfect. Yeah. Well, I would say that it's a mix of all those things, and it really feels like a lifetime in the making. I grew up in Northern California, surrounded by a lot of nature. I was really immersed in it at a young age, and my family has a long history. We go back... Uh, my grandparents and my parents back in Iran, before they immigrated here, they had orchards, and farms and [laughs] stuff like that, that I always heard stories about. And I think early on, that got me close to nature.
And then I think there were a few moments in my life early on, where I became really enthralled by science and how nature is just powered by this incredible sort of below the surface power of science. So one of those was my uncle, who is a scientist. When I was like 10 years old, he used to quiz me on science questions. And he asked me, "What are trees made out of, and where do they come from?" And it seems like such a simple question, but it has stuck with me since I've been 10 years old, because of... Just how might... Like it's mind-blowing.
Jason Jacobs: My son turned 10 today, so I know right where your head space was-
Neeka Mashouf: [laughs].
Jason Jacobs: ... at the time.
Neeka Mashouf: Amazing.
Jason Jacobs: [laughs].
Neeka Mashouf: You should ask him this question.
Jason Jacobs: I will. Yeah. When he gets home from school, I will. I will ask him. So, "Where do trees come from?" Tell me the question again. I want to get it right. Where do the trees come from, and how are they made? Is that... Is that it?
Neeka Mashouf: Yeah. Where do trees come from? [laughs]. And at the time, I was like, "Well, you know, water, nutrients in the soil, the sun, I guess." It took me a while to realize that they come from... You know, they're carbon-based, so they come from CO2 in the air. And that absolutely blew my mind, that all these incredible stoic trees that I loved so much at that age, were once air and they grew into these knots of incredible trees that are so complex and so incredible. And I think that was one of the initial sparks of my love of materials and material science, and I continued on that path of- of science and nature.
When I was 15 years old, I published my first scientific paper in artificial photosynthesis, for Lawrence Berkeley National Lab, and it was coming from this like constant inspiration of mine to use technologies that I found interesting and inspiring to unlock abundance and prosperity for people on the planet. And at that age, it was just such an incredible concept to me, to be able to run photosynthesis artificially and provide value and change the way we do things to be more sustainable and planet-positive.
And then I continued on that path for like 10 years. Since then, working in different research labs, science research labs. So things like computational material for energy storage and- and solar, micro wind turbines, sustainable polymers and polymers for tissue engineering and- and some more cool opportunities that I had to work into the research lab throughout high school and college.
And it was just incredible to be on the forefront of so many frontiers at the time, around, you know, the new age of energy and seeing what we could potentially innovate to change the way we do things and completely solve a major global problem or, you know, help people on the planet. So that was always amazing to me.
I ended up going to Berkeley and got a simultaneous degree in, uh, Materials Engineering and Business. It was sort of this continued interest, and using materials, innovation, bringing them to market, solving big problems. I was even on a solar car team, uh, in college, where we built and raced solar-powered cars. I was the driver, which was fun, [laughs], on a Formula One track. [laughs]. It's a good time to see, um, you know, renewal technology being applied actually to the real world and- and seeing how we could optimize the system and- and make it a reality.
Throughout college, I worked on a few different ventures. I always knew that I wanted to build things and be an entrepreneur and start- start, um, a company that could really make an impact. But I graduated college. I was a product manager for a few years. I didn't feel quite ready to just go all in on entrepreneurship yet. So then it took me a few years, but I think COVID was [laughs] really a big moment, where I had time to sort of have an existential crisis and realize that [laughs] I know exactly what my personal mission is. You know, using technology and bringing innovation to market, that can, you know, create prosperity and abundance for people on the planet.
That's something that has always been... Like I knew it was my core passion and what I wanted to do. And so during COVID, I was like, "Why am I not doing that right now? I have so many ideas and so much potential. Like it's just time to go all in." I think... And at the same time, you know, 2020, it was like... It felt like the end of the world. [laughs]. It was like all the... The fires, um, globally at the beginning of the year, and then growing up in California. Every year, there's worse and worse wildfires during the summer. And so it was like, "This is my mission. I can do this. I feel responsible to just go all in."
So that was sort of what led to me starting Rubi. And then maybe the one other thing that I'll say, is that throughout that whole time, the sort of parallel life that I led. Um, was I grew up in the fashion industry. So my uncle, um, Manny Mashouf is the founder and CEO of Bebe Stores, uh, spelled B-E-B-E. You might of like seen it in a mall or something. [laughs].
Jason Jacobs: Of course! Yeah.
Neeka Mashouf: [laughs]. Yeah. It's a big global women's clothing brand. And that really gave me the insight and opportunity to see a business being built. A really outside of the box new concept, which Bebe was at the time, when it was starting, forming. And then also getting exposure to designers, merchants, the whole supply chain, runway shows. It was just such an incredible upbringing for me, that I am so grateful for. And I fell in love with fashion, but then, of course, as a scientist, I knew the environmental impact that is devastating truly. But as a scientist entrepreneur, I knew that we could change it. And it's so ripe for disruption, and so heavily demanded by the industry.
So those are sort of all the things that I lived through, that really... [laughs]. That's why I say, it feels like a lifetime in the making, and why Rubi just really resonates with everything that I've done and- and my personal mission.
Jason Jacobs: So I understand that there are these kind of stepping stones along the way. And then during the pandemic, a switch kind of flipped inside of your head and your head and you're like, "Well, here's my passion, and why aren't I doing that?" And you never know what life's going to throw at you, and there's no time like the present. But- but how did that translate from, "Okay. It's time to do something in this general area," to "Well, it sounds like a pretty"... Well, now, I mean, it's a pretty specific well-articulated idea/product/company and funding, and team. And so how did you get there?
Neeka Mashouf: Well, it really was a journey. So, um, I'm great to be on this My Climate Journey podcast and share that. [laughs]. But first I'll say that, you know, throughout all this time and- and my journey to even starting Rubi, um, I've always kept, uh, an Idea Book. I see myself as an inventor and I'm constantly thinking about things that I want to create and build. So, you know, that was a whole bunch of things. It wasn't necessarily like just Rubi, or very specifically Rubi. But there were concepts that I've been thinking about, uh, especially as synthetic biology around alternative, you know, proteins was, at that time, like becoming more and more of a big- big deal, and more popular.
I'd been thinking about concepts in this space for a while. And then throughout all of my research and materials and understanding that most of our materials are carbon-based, as a carbon-based planet, it was just all these things coming together to sort of click. You know, we have this massive carbon emissions problem. It's devastating and we don't know how to solve it. But the same time our planet is carbon-based and we have an incredible carbon cycle that for the longest time has worked really well. [laughs].
So what... It's more of really an opportunity. How can we unlock those carbon emissions as a new natural resource? From making carbon-negative materials and creating a world where human prosperity and economic growth are planet-positive, which is the vision for Rubi, essentially. [laughs]. I think that was some of... Those were some of the sparks behind Rubi, in terms of the idea. And then I really framed my attention on this carbon problem. How can we utilize CO2 to make carbon-based materials?
And combine some of my science background and some innovations at the time around fermentation and alternative needs, to come up with this idea of, "Okay. Let's use biology that's powered by some material science benefits to be able to turn CO2 into really impactful materials, but in a way that can be cost-effective, and efficient, and, um, ultimately land on a carbon-negative product."
Jason Jacobs: You- you mentioned, uh, before we started recording, that you were pushing on this nights and weekends initially, and then as you started getting more and more traction, it became clearer and clearer that you couldn't not do this. Can you talk a little bit about what you were pushing on nights and weekends, and when the switch flipped from a project to something that you couldn't not pursue as a company?
Neeka Mashouf: Yeah. Of course. And I think this is such a difficult decision, that I've seen with some of my friends too who are starting companies. Like knowing when to go all in is such a huge and scary decsion. So, yeah. I was working full-time as a project manager. I had a really demanding job and so it was [laughs] a really tough period to be doing both at the same time. But what I was doing was doing customer interviews, prototyping the technology in a lab and then also starting to talk to some other experts and investors in the space.
And I ended up outlining, [laughs] as a, as a classic project manager would do, like the certain success criteria, or the metrics that I would use to check off when I should go all in on this. And it was successful on prototype. It had significant customer interest and investor interest. That really signified that it was possible and also that there was a really large market potential. That this could help solve a big problem for people.
And once all those things came true, [laughs], uh, like, okay. [laughs]. With some help from my friends actually, who pushed me. They're like, "You need to go all in and do this." I ended up quitting my job and at that time just going straight going into fundraising for Rubi, which we didn't have any fundraising at the time.
Jason Jacobs: As it relates to the, to the product, when you were in the lab, did you... Was there a lot of different approaches you evaluated before you landed on, uh, the one that you are going to market with or... Talk a little about that process.
Neeka Mashouf: Of course. Yeah. So I think my experience working in computational materials sort of framed my approach in a way that I did a lot of modeling, um, before even getting into the lab. So I compared many different possible technologies and their potential efficiency. What kind of products they could be making. All of that, and really narrowed it down onto our current technology, which sorts of gets the both, the best of both worlds, in terms of fermentation on the one side and seeing like living cells, all the way to something like metal cantholysis on the other side.
Our technology is sort of like best of all of those things, in my opinion. [laughs]. And allows us to make a really valuable product. It- it was some initially modeling and work, but then we landed on the tech. And, um, of course, there was some, uh, experimentation and figuring out how to actually create a successful prototype. It was not easy, but at- at that time, we did have a clear idea of the tech that was going to make this happen.
Jason Jacobs: What was the initial customer set that you were targeting? And what was it that you were displacing?
Neeka Mashouf: Yeah. So we talked to a lot of large fashion brands. You know, for example H&M, Eileen Fisher, people on their sustainability teams and in their supply chain teams. And what we knew and- and really validated from all of these interviews was that these major brands and the majority of major brands in fashion have set aggressive carbon reduction, carbon neutrality or carbon negativity goals even over the next 10 to 30 years, but they don't have any clear path to achieving them.
They don't know what solutions will help them get there and, um... You know, these teams at these brands are working hard to identify those solutions, but carbon emissions are so entwined with the production with apparel that... I mean, right now, you just can't be an apparel company and not have [laughs] crazy emission. And the majority of it comes from textile production. And so we- we were talking to brands and experts in this space.
We really validated this need and problem, where they felt like if they didn't have sustainability goals and actually achieve them, that they would, you know, face significant risk as a business, in terms of consumer engagement and revenue from their consumers all the way to actually, um, being able to product product. Like these companies are some of the largest consumers of things like cotton, um, and other materials globally. And if climate change is happening to an extent where cotton can't grow as reliably, um, or they can't get their material, their business is facing a major threat.
And fashion brands actually know this. [laughs]. And they- they study it, and it's amazing how they understand the risks and are prioritizing finding a solution. So there is a strong demand, but not a lot of solutions out there that could actually take the requirements, uh, and needs of fashion brands to heart in developing a solution. So that's what we really focused on doing, uh, with building a product that could meet all the needs of fashion brands that we know, by growing up in the industry. Uh, you know, quality, scalability, cost, they all need to be there. And then, of course, the sustainability factor that's going to make carbon-negative and be a turnkey sustainable supply chain they can just adopt and really be able to hit their sustainability goals.
So I think it's a pretty often overlooked area of industry, in terms of, you know, climate and sustainability. Fashion is the third most CO2-polluting supply chain on the planet. Um, and this is from, uh, World Economic Forum and BCG Report, uh, last year. You know, when you look at the attention that it's getting from the climate community, it really doesn't reflect [laughs] that. You know, it's much more than any sort of trades, or auto, or transportation emissions and...
There's just so much demand in the industry, so. I've very passionate about this problem. [laughs]. We were seeing a clear demand from brands, and that's why we decided to go, um, all in on it.
Jason Jacobs: Can you talk a bit about the textile production process with Rubi, and the textile production process without Rubi? So that we can get a sense of how the Rubi process is different?
Neeka Mashouf: There's a bunch of different types of textiles you might recognize. You know, cotton, viscose, [orliathal 00:23:43], polyester, et cetera. So some of those are natural materials and some of them are plastic-based materials. We focus on natural materials because we want to make a product that can, you know, live in harmony with the planet and- and not pollute.
So looking into, um, some natural materials as a comparison, cotton and viscose today come from plants. Whether it's cotton plant, or for viscose, it's trees. And basically the process is, the raw material is grown and, you know, uses an insane amount of water, like 300 liters of water per kilogram of cotton, and a lot of water for trees, too. So the raw material is grown. It's harvested. It's processed down, um, mechanically and chemically into the inputs for fiber spinning.
And so let's just narrow in on viscose. That wood pulp from trees is broken down and dissolved into a dissolved cellulose, which is this polymer, uh, that's found in trees. And then after that it is, um, extruded through like a shower head sort of thing, called a spinneret, to make these tiny fibers. Uh, and then you've got this fluffy material that you can then spin into yarns and then weave or knit into textiles and then that becomes, you know, the garments that we all use.
Jason Jacobs: And in the fashion industry, so it's not actually the fashion brands that are doing this. Right? Is it, uh... Is it a supplier to the fashion brands that's actually doing this textile production process?
Neeka Mashouf: Yes. It's... There's this massive global supply chain for the textile industry. So fashion brands typically don't own these, um, manufacturing facilities this early on. So they'll be different manufacturers at this, these stages of production that turn the trees into wood pulp. And then that next facility will turn that wood pulp into dissolved cellulose and then the fiber-spinning, the yarn-spinning, and then knitting and weaving.
And then at that point, the material is transferred to a cotton sew facility of the fashion brands, which they may or may not own. That's when that fabric becomes the end garment that they've dissolved for the season. [laughs].
Jason Jacobs: And so maybe now talk about the Rubi process for, uh, similar materials?
Neeka Mashouf: What Rubi allows us to do is basically directly turn CO2 into the target, uh, molecules needed to make textiles. So we skip all of the plant-growing and harvesting and, um, and processing steps that contribute the majority of the CO2 impact across this end supply chain. Uh, we directly turn CO2 into cellulose, which is a drop-in into the next steps, which are fiber-spinning, yarn-spinning and textile manufacturing. Because we can directly make that, um, molecule from CO2, we not only save a significant amount of carbon that would have been emitted by the traditional manufacturing process.
We also can directly sequester the CO2 and the material and actually end up being net-negative in emissions after considering things like energies, and transportation, and- and other things like that as well. The difference is pretty significant. It allows us to sort of become resource independent. There's no land usage virtually. There's no water usage virtually, and, uh, this carbon impact is negative.
Jason Jacobs: And so, uh, putting aside the- the emissions impact, just strictly from a performance standpoint, how does it perform versus the materials that you're, um, displacing? So I think in this case, uh viscose to- to speak with, to stay consistent with this- this example.
Neeka Mashouf: This is key. We actually make the same exact textiles that fashion brands are already using today, that designers and merchants know and love and consumers are already familiar with. We're not making, uh, a new type of like bio material or whatever, that has a lot of performance risks. And that's... Again, coming from our background in the fashion industry, the problem isn't right now like material property. It's the sustainability of the supply chain.
And so we really wanted to focus on making the same materials that fashion brands are already using but through a different, through reinventing the supply chain to be planet-positive. So there's actually no real like product risk on the other side of performance, or scalability, or eventually cost. [laughs]. Um, it's really just changing the way that it's made. So a drop-in replacement we use the same industrial manufacturing processes, once the cellulose is made to turn it into textile.
Jason Jacobs: And wh... And where do you get the CO2 from?
Neeka Mashouf: We're pretty flexible on the source, in terms of what the tech is actually able to do. We've tested it with direct air, just ambient air, uh, which has been successful all the way up through higher CO2 concentration. So we can really be, uh, choosy, I guess, with what we want to use. But the more efficient option and also the best business model for us, which we've determined is, um, using waste stream CO2 from manufacturing facilities, where we can provide a carbon removal service, as well as use a higher concentration CO2 that's already there that we don't need to compress or- or do anything with to get to higher efficiencies. So.
Jason Jacobs: Are you... Are you partnering for that piece? Or are you actually doing the carbon removal yourselves?
Neeka Mashouf: So our technology is capable to do the carbon removal ourselves. We are working on those partnerships right now with facilities like textile mills, uh, energy facilities. We're doing damage facilities to determine like where our first pilots will be and- and test that out. As of now, in our lab we're, uh, we're using captured CO2 and just concentrated CO2 for our initial testing.
But for the actual product and business model, we plan on, um, capturing the CO2 because what are, it's what our technology is able to do and really helps us integrate better into the ecosystem.
Jason Jacobs: Uh-huh [affirmative]. And when it comes to special sauce... As a company, so is the special sauce more on the material side, or more on the capture side, or both? And is there any other special sauce that I didn't mention?
Neeka Mashouf: Yeah. Well, I think our special sauce is really on this tech that covers carbon capture, uh, all the way to utilization. Um, like I mentioned before, we see it as a platform technology that, um... We're starting first with cellulous is and cellulous material is like textiles. But it is, you know, applicable and scalable to other materials like proteins, lipids. Uh, so you can imagine food, bioplastics, all the other, you know, biological macromolecules.
We're excited for the future of Rubi beyond this first chapter, uh, and it really comes from this platform tech that we're developing, that I think is one of our main secret sauces. And then I also really think that me and my twin sister's background in both science and fashion has helped us really understand this initial problem for this first chapter that we're tackling and- and how we can build a product that is going to be really game-changing and can gain traction and can help support the reset of the growth of the company.
Jason Jacobs: But it sounds like from the initial go to market, the initial go to market is around a handful of materials specifically for fashion. Are you working with the fashion brands or with the, uh, textile manufacturers?
Neeka Mashouf: We're working with both. Our customers are the fashion brands but we partner with manufacturing facilities, building sort of network of manufacturers who can help us get from the cellulous, to fiber, to yarns, uh, for the fashion brands. So we want to be independent in that way, in that we have our own network of manufacturers for simplest processing. But we also work with the manufacturing supply chain for fashion brands. If they have a really specific supply chain where they really want to work with our partners, we're also flexible for that as well.
Jason Jacobs: Are you displacing the, uh, existing suppliers?
Neeka Mashouf: We are not displacing the manufacturing supply chain. Um, we would be displacing potentially the cellulose supply from deforestation or other plant sources. And what that helps save is a lot of the CO2 impact, water and land usage. So we would basically be a replacement for that cellulous pulp that today comes from trees.
Jason Jacobs: And it's with a caveat that I know very little about the fashion industry and the fashion industry supply chain. But it's- it's surprising to me that your customers are the fashion brands and are not the textile manufacturers since it sounds like... It sounds like the textile manufacturers process will continue but there's a subset of that process that you're enabling them to do in a way that's more environmentally friendly without compromising the performance.
And we didn't get into the cost yet, although you alluded to the fact that it might be more expensive, at least initially. But- but why... Help me understand why are your customers the fashion brands and not the textile manufacturers. How does that work?
Neeka Mashouf: Yeah. Of course. So it's an interesting supply chain today. But I think the important difference with our product and why the customer is the fashion brand is because it has a really unique value proposition, in terms of end-to-end traceability. Where we can confirm and own the full handoff throughout the supply chain and validate the carbon negativity. In a sense that it's sort of like this...
We see ourselves as a ingredient brand. So it's more so than just an input cellulose that gets blended in with all other kinds of cellulose. It's really important for brands and for the value that we're developing that it can be validated. That if they're sourcing a textile, that it's 100% Rubi cellulose. So in order to do that, we work with the fashion brands directly. They're our customers and, uh, we use contract manufacturing in order to get to that end product.
Jason Jacobs: So if I'm hearing right... I'm going to say this as a statement, but it's really a question to test my-
Neeka Mashouf: Mm-hmm [affirmative].
Jason Jacobs: ... understanding. But is the fashion supply chain almost like the... The fashion brand is the one that has the product vision and also chooses the ingredients and stuff and then they find a contract manufacturer that can take those ingredients and make the recipe. Almost like a chef, but the chef doesn't select the ingredients. The chef takes the ingredients provided by the client and, uh, and produces the recipe.
Neeka Mashouf: Yes. I love that example. Yeah. I think that's a great analogy, for sure. The fashion brands would create. Maybe they have all of these designs for their upcoming season. They produce tech packs, which specify all the details of like let's say what a garment's would be made of, how it would be made, the sort of like yarn size and what the sourced material is. All of that. And then they work with manufacturers to make it happen. They might have a portfolio of manufacturers that they work with regularly, but they're usually not the ones that they own. They sort of do this, um, contract manufacturing.
Jason Jacobs: When they start using your ingredients instead of whatever ingredients you're displacing, does it necessitate them switching manufacturers and cultivating new relationships? Or can they keep working with whoever they know and trust?
Neeka Mashouf: They can keep working with everyone they know and trust. We can use the same suppliers that they're already using, because it's a drop-in replacement and then we're also making our own relationships, so that we can also have, you know, an independent supply chain just in case the fashion brand is smaller. It doesn't have all the influence that maybe, like a massive brand does and we can help still make product there.
Jason Jacobs: Yeah. I mean, to use another analogy. I don't know why I love these- these analogies. But it reminds me of like a general contractor that maybe has a, an electrician relationship but that electrician doesn't necessarily specialize in- in selling EV chargers. And so if I make an EV and a charger, then maybe I'm also going to have my own stable of electricians so that if a general contractor wants to... You know? If an end customer wants to install an EV charger, make it easy. It's like, "Hey, you can use yours, or you can use mine, but- but"... You know? "We have ones that are great, but- but it's whichever way you're more comfortable."
Neeka Mashouf: Exactly. Yes. Yes. We're really trying to build the most flexible supply chain as possible, to make it easy to adopt for fashion brands.
Jason Jacobs: And where are you in terms of go to market, and customers and things like that? What stage are you in today?
Neeka Mashouf: Yeah. So in terms of tech, we're at the lab stage on focusing on scaling up to our first pilot scale sort of production. What that looks like is increasing the scale of our reactor system and, um, actually being able to produce more significant amounts of cellulose on a more reliable basis per month, by the end of this year.
With customers, we have a wait list of about 22 line fashion brands who are excited to test our sample materials. What we're focused on in the next few months is making these samples. A knit jersey, denim and satin materials that use the Rubi cellulose and can help these fashion brands understand that the performance properties are the same and that it's the material that they want to source to achieve their, um, sustainability commitment. We're at sort of like producing sample stage, scaling up to do some pilots with brands.
And just in this month, the last month, we actually won and we're selected for two accelerators that are run by kind of like this panel of major fashion brands. Uh, one of them is the H&M Global Change Award, which is often called the Nobel Prize of Fashion, which is pretty fun. [laughs].
Jason Jacobs: Nice!
Neeka Mashouf: The award ceremony is in the same hall as the Nobel Prize [laughs] banquet or something, which I'm excited about. So basically H&M is this massive player in the sustainable fashion space that's supporting this award and we were very honored to receive it and continue working with them. And the other one is the Fashion For Good accelerator, which is also run by a panel of incredible brands but, uh, we're excited to work with too. Like Carrion, which is, you know, like Dior and all the luxury brands, Chanel, Target, Bestseller, Levi's and- and more.
We're working pretty heavily with brands to test out our tech in the next few months and then continue scaling up to a few pilots. And then actually get to commercial scale production sooner than you think.
Jason Jacobs: And I think I read, you've raised what? 4-1/2 million to date. Is that right?
Neeka Mashouf: Yeah.
Jason Jacobs: And is that all equity financing?
Neeka Mashouf: Yes. So, um... Well, no. [laughs]. We've raised about 4.2 million in equity. And then an additional 250K from the National Science Foundation.
Jason Jacobs: Uh-huh [affirmative].
Neeka Mashouf: We received a grant from them for our research. Actually even including this, uh, Global Change Award, we also got a 200 Euro Grant as part of that. That's another, um, grant that's not even included. And that's 1.5 actually that we just got.
Jason Jacobs: Great. And- and when you think about staging and phasing, what are you hoping to achieve in the current phase before you think about going out for additional capital? And then what is that next raise look like, in terms of size and source? And also, what kinds of milestones would you try to get done there? To the extent you don't know yet or it's subject to change, that's perfectly okay.
I'm just... I'm just... And also, don't share anything you don't want to share. I'm just trying to get a sense of how a company like this goes to market. I know our listeners like to understand that as well.
Neeka Mashouf: Yeah. Of course. So with this fundraising, the milestones that we're really excited to hit are really focused on commercialization. So this funding will be used to get past the initial pilot stage, with, you know, some concept garments with say a handful of fashion brands to actually achieving like some initial constant recurring revenue sort of production for a handful of fashion brands.
So it's really focused on commercialization and- and really proving out that the tech can be, um, scalable and fit into the products and supply chains of fashion bands. And then, um, you know, we'll start thinking about the next round of fundraising after that. But this round will, uh, will really focus on those commercialization milestones. For the next round, we're still defining what it'll look like, but definitely always prioritize strategic partners who see the vision and- and are part of the ecosystem, and can really help us achieve this massive global vision that we see, even beyond... You know, within fashion, and then beyond, will probably be [laughs] what that next round is- is focused on. But TVD.
Jason Jacobs: So if you go from say lab to pilot scale, would the next round then be about proving that you can deliver similar caliber on a higher volume?
Neeka Mashouf: Yeah.
Jason Jacobs: Like more customers and more, a bigger percentage of- of the, those customers' production footprints?
Neeka Mashouf: Totally. So this round covers sort of like our- our pilot facility, getting to some big line production and customers and revenue. And then the next round would focus on continuing to scale that up and develop our tech. So, you know, a demo or a commercial facility. And then, you know, significant R&D to improve different parts of our tech and then start thinking about potential other materials or, um, spaces that we want to move into. But actually, [laughs], maybe not the last part.
But definitely the next round would be focused on scaling up our commercial production to larger facilities and be able to serve a much more significant piece of the fashion industry with carbon-negative product.
Jason Jacobs: So the first of a kind from a, um, manufacturing end point. Will that get done in this stage, or is that the next stage?
Neeka Mashouf: That's this stage.
Jason Jacobs: And then when it comes to scaling that, I assume there's some role for debt in some capacity?
Neeka Mashouf: I- I hope so. I think it could be a really great vehicle for us, um, especially if we already have some significant compelling revenue from the- the pilot that we're running and consistent contracts that we get from that. I think debt could be a really great way to finance further development and also help not dilute [laughs] the- the company and our employees too much.
Jason Jacobs: And when you think about corollaries or role model companies, I mean, is this a playbook that's been proven in the past, either in this industry or in an adjacent one with a similar criteria? Or are you really blazing new ground?
Neeka Mashouf: Hmm. That's an interesting question. Well, I think in terms of this ingredient brand concept that we're trying to build and create. GOR-TEX is another really great example in the fashion industry, where they really represent, um, materials and performance innovation constantly. And, you know, sometimes when you're looking for ski gear or something, you look for GOR-TEX before you even look for any other brand, uh, which I think is really interesting and- and something we're aiming to have a level of engagement similar to with our customers. I think that's a great example in the fashion industry. There's other ingredient brands like Intel, and like 3M, that I think also represent something important to their customers. And I think Rubi aims to be... Yeah.
Rubi aims to be a brand that can engage customers and represent like revolutionary sustainability and be a really magnetic brand for this new movement that has been happening pretty significantly with Millennials and with Gen Z to demand sustainability and a really significant change in the way that industries work. We want to build a community of customers really that we can help serve with the materials that we're creating and create the vision that, I think these generations have of what our planet should be and we're excited to- to create that.
Jason Jacobs: And when it comes to the customer value proposition, you talked about how great it was that they don't have to compromise on performance. And then you said... You slipped in something interesting, and- and I... It was something to the effect of eventually cost, um, which- which makes me think that, that initially, there's- there's a green premium associated with this.
Can you talk a little bit about how big that premium is initially? And also, what you want to get to and what the key drivers will be to, um, to push down those costs over time and- and, uh, get more competitive and ultimately overtake the, uh, incumbents?
Neeka Mashouf: To start out, as we're at the small scale and scaling up the system, our costs per kilogram are a little bit more expensive than standard viscose and lilacell. And it really comes from we're in our early development stage and there are key things that we know that we can, uh, really focus on to get that cost actually below the market cost for textiles today. And so we have roadmaps in our technical R&D to focus on that this year and next year, and actually become cheaper than- than standard textiles.
I think that's a really unique thing that these new technologies like ours, that change the way that production works and skip so many like crazy manufacturing steps. To just directly product things, can really achieve. You know, become cheaper than the way things today are produced. And what's helpful is that fashion brands, because they are so interested in adopting sustainable technologies, they're actually very willing to partner with new innovations and materials for fashion, accept costs that are higher for material as long as there is a line of sight to price parity, which we can definitely demonstrate.
And so I think that's a great thing that the fashion industry is doing to help support innovations in this space and enable a future that can be planet-positive and... Uh, we've seen that with our customer partners too.
Jason Jacobs: This next question is a bit of a weird one. But basically, if you weren't planet-motivated, it is super hard to build a company, and it's also super hard to build this kind of materials company, climate impact aside. And so you are taking on not only dealing with all of those things, but also making sure that you're doing things in a way that from an emissions' standpoint is better than existing. Which number one, means you need to understand how you're doing it, which in itself hard. And you need to figure out how to monitor and improve it, uh, over time and make sure that, you know, that it stays, you know, at par or below certain thresholds as you go.
How do you handle that competency? Does that come in-house? Is that service providers or consultants? Is that a blind spot? And also, do you worry that needing to parallel path to this whole extra competency makes it harder to get the- the core competencies right, given that, you know, as a startup, you're spread so thin?
Neeka Mashouf: Yeah.
Jason Jacobs: Because we all are. Yeah.
Neeka Mashouf: Totally. Yeah. It's a really interesting question. [laughs]. I mean, I- I would have to say that it's so intertwined to the actual product we're creating, that it can't be a- a second thought or it can't be separate. Um, the whole reason that this demand is here is because fashion and consumers are demanding, you know, a carbon-negative product. And so being able to understand it, monitor it, report on it. I don't like... It almost has to be a core competency.
I would say from my background in climate technologies and just being an engineer, I think that has been really helping at least our internal understanding of the footprint, in terms of CO2, water, and land usage. But definitely, there's so many resources out there, in terms of published LCAs, uh, like cycle assessment. That validate and monitor impacts across the board in different like fashion materials and other things. So internally, we use our [laughs] science background, I guess, and then published data.
But what's also really important is third party LCAs, so we absolutely are working with third party service providers to, uh, do sort of like external LCAs of our system and we validate all of the- the metrics constantly.
Jason Jacobs: And when you say consumers are demanding it, how... I mean, if I just like go to an eCommerce website, or I walk around the mall, or I look at a magazine at the advertisements or catalogs or things like that. I mean, correct me if I'm wrong. But I'm not seeing which brands have carbon-neutral or negative products and- and which ones don't. Or which lines are carbon-negative or- or which ones aren't. So how- how am I, the consumer, even know and what data points that are making brands start to feel the heat on this? Like what are they seeing that- that I'm not seeing?
Neeka Mashouf: Yeah. Today, in products, there's not this sort of carbon footprint that consumers are looking at. But I would say that consumers, especially in younger generations like Millennials and Gen Z, um, have become a lot more well versed in the sustainability of different products and materials in general. And there are a lot of studies, in fashion specifically and across products in general, that look at this changing movement within consumers towards more sustainable goods and towards goods that represent their personal values. Where, um...
Actually, I think it was concluded at an Ellen MacArthur Foundation Report, maybe last year, that the fashion industry faces about a $60 Billion profit reduction if no action is taken on sustainability initiatives. And that all comes from consumer preferences for things that can be sustainable. So all of this, polyester, polyester garments, fast fashion, things that are just are so clearly creating pollution globally and all this like waste is so forefront in a lot of consumers' minds that it's actually more central than you think.
Like fashion really represents identity, I think, uh, which is one of the really interesting things about the industry. And so fashion has been one of those industries that has been in the cross-hairs of the movement of sustainability more so than other industries. Because it- it represents people's identities and so you can see it. And even just the way consumers engage with brands across social media and different fashion reports.
They're seeing the negative impact. They're realizing it. They're not blind to it, and they're demanding action because it's so central to their identity today. Like sustainability, planet, all of that. Global warming is- is an issue that like everyone knows about now. [laughs].
Jason Jacobs: So you mentioned GOR-TEX as a corollary or a brand that you admire. And I also... You didn't mention it, but I can't help but think about like Intel Inside, for example. Where the Intel chip is inside a laptop made by someone else, but the Intel Inside sticker or, you know, a little square on the, on the side of the laptop gives consumer confidence that- that it's going to be fast and strong, or... Yeah. So- so in your view, when the consumer sees the little GOR-TEX on the side of a brand, or did back in the day.
If it isn't as relevant now, I don't know. Um, how in your mind, did it... Like why did they... Like so what associations were drawn with them? And when they see the little Rubi on the side of a, of a fashion, you know, piece of apparel, for example, what associations do you want them to have with- with the Rubi brand?
Neeka Mashouf: It's been really, uh, interesting to study GOR-TEX and other ingredient brands like Intel. So what I've sort of realized, is when a consumer sees a GOR-TEX logo or they're looking for that logo, it's because it represents performance and innovation. So they know that by choosing a GOR-TEX... Uh, and I keep bringing up ski example, because I see a lot. [laughs]. Like a GOR-TEX glove or something. I know it's going to be high performance, probably one of the best ones I can get. I don't need to worry about my hands getting cold or anything like that or...
Jason Jacobs: It's like... Po- Polarized sunglasses is another one.
Neeka Mashouf: Yeah. [laughs].
Jason Jacobs: Polarized. Right? It's like... [laughs].
Neeka Mashouf: Totally. It's like, "Nice. [laughs]. My eyes will be protected." Yeah. It just represents like, I know the performance quality is going to have... GOR-TEX is constantly innovating, so it's a brand that, um, you know, throughout years, I can consistently keep choosing. Because they're really good at this stuff [laughs], for example.
Um, and then what we aim to be as an ingredient brand for Rubi is, um, when you see... Actually, not even when you see like a garment made with Rubi. We want our consumers to look for garments made with Rubi, and like choose based on that. But it's not even like a- a sort of decision. It's like, "Obviously, I'm going to find the, uh, Rubi article, because it's the same performance but it's dramatically planet-positive and in line with my values." And we don't want it to be this whole like thing where like we push, uh, sort of pessimistic climate stuff onto consumers.
Like, "You better choose this, otherwise you're a bad person," or something. It's more of like we want to make this an easy choice that we can all be part of the positive change. All of your clothes, all of the brands you love, we can make it with Rubi textile and- and you can be part of reversing climate change.
Jason Jacobs: Or organic fruit. Maybe that's another example. Right? It's organic. It's- it's better for me. It's- it's... You know, it's made... It's made locally, or... Yeah. Yeah.
Neeka Mashouf: Totally. Yeah. Rubi, we hope it represents radical sustainability. It represents honesty, um, and authenticity, in terms of what we're building and- and building something symbiotic with the planet. When they see it, they know it's something that's going to have a positive impact on the planet.
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