Mar 08, 2024
by Karl Smith
Investment In Next-Gen Materials Reaches Over $3 Billion USD
by Karl Smith
Mar 08, 2024

Between the end of 2022 and the end of 2023 investment in next-gen materials surpassed $500 million USD, up to $504 million from $457 million USD – a long way from the billion-dollar days of 2021, but a positive trajectory nonetheless and one which puts the total amount at $3 billion USD since 2014.

It’s an interesting number – or an interesting growth pattern, anyway – coming off the back of an extremely difficult year for the next-generation materials space. (A year that saw the beginning of the end for Swedish innovator Renewcell, trouble at one-time unicorn BOLT, and issues across the board with supply, demand, scale and uptake.) That investment was up regardless shows a commitment to progress and a genuine belief that solutions to our material problems can be both progressive and profitable – that change can be made and that change can pay dividends.

2023 continues the upward trend of new startups entering the space, with a total of 144 next-gen innovators now working toward change. That being said, an increase of only 7 – up from 137 – may point to some degree of hesitation.

Perhaps, with 88 of those companies working on leather alternatives, it’s a fear of saturation. There is surely a limit, after all, to how many such materials need to be in production at any given time? Or perhaps it’s a “wait and see” moment for material innovators, surveying an uneven landscape, deciding whether it’s worth it. Although, at this point, we’d argue that there’s really no time to “wait and see,” and, equally, that if you’re holding on to an idea that could make positive change for the planet, that idea is definitely “worth it.”

Where those risks are being taken, however, is particularly interesting.

Yes, there remains the usual concentration of innovators in countries like the United States, the United Kingdom, and in various locations across mainland Europe – such as the Netherlands, Germany, Italy, and France; countries where scientific research and fashion are famously given heavier weighting when it comes to funding and to kudos – but there is also a growing contingent of operators in Central and South America.

Mexico, for example, has two next-gen outfits, while Brazil leads the way with three, and Chile, Argentina, Peru, Costa Rica, all have at least one each. And while, even combined, this doesn’t yet come close the 41 companies operating in the US, it does offer an interesting glimpse of the future; a next-next-generation, so to speak, which – combined with emerging innovators in Indonesia, India, the Philippines and Puerto Rico – has the potential to upset the current hegemony and which may well, should turmoil continue, be the key to reigniting a semi-stalled industry.

All this data, which comes from the Material Innovation Initiative’s latest state-of-the-industry report, makes a fairly compelling case for the next-gen industry’s continued growth – particularly welcome at a time when the space is in desperate need of good news – pointing to diversification as the key to that growth.

This is true not only in terms of where these businesses are anchored geographically, but also in terms of which niches they occupy; leather alternatives may still occupy the most material innovation real estate, but other alt-materials such as silk and fur are starting to gain traction too.

More than this, however, it’s the variation in input that presents the most reason for optimism.

With 53% of all next-gen materials now plant-derived, view alongside the 14% created from microbes, the 8% coming from mycelium, and the 4% from cultivated cells, it’s starting to feel as though (even recycled) fossil-based alternatives have had their day, making room for a cleaner and greener fashion industry free from animal cruelty.

It’s not perfect, but it feels like progress. And that’s what we’re counting on.