The news: Cloud Paper, the Seattle startup that makes toilet paper and paper towels from bamboo in an effort to slow deforestation, has raised $5 million in new funding.
Big-name backers: The company has attracted investment interest from some heavy hitters in tech and venture capital, as well as a host of high-profile celebrities. Bezos Expeditions, the VC arm of Amazon founder Jeff Bezos, is involved in the latest financing, along with Salesforce CEO Marc Benioff’s TIME Ventures, former Amazon Worldwide Consumer chief Jeff Wilke, and actor Ashton Kutcher of SOUNDwaves.
Robert Downey Jr.’s Footprint Coalition Fund got on board a year ago, and other notables include Greycroft, Presight Capital, Mark Cuban, Gwyneth Paltrow, Russell Wilson and Ciara.
“With all of these folks, it really is the mission,” Cloud Paper co-founder Ryan Fritsch told GeekWire. “They want to see the solution that we’re offering, they want to see it materialize in the world.”
Downey even rubbed the product on his face during a February 2021 appearance on “The Late Show with Stephen Colbert” (below) in which he plugged Cloud Paper by saying, “You shouldn’t have to sacrifice quality for sustainability. They really figured it out.”
About that mission: Fritsch co-founded Cloud Paper in 2019 with Austin Watkins, a fellow University of Washington grad, and they quickly brought on Tori Kiss, who they worked with at Seattle trucking technology company Convoy. The startup’s goal is to put a dent in the number of trees that are cut down to make household paper products. Its tree-free, three-ply toilet paper — and now paper towels — saved over 10,000 trees in 2021 and received certification last year from the Forest Stewardship Council.
Big growth: The company, which employs eight people, delivered 930% more rolls since its seed round in September 2020 and grew its direct-to-consumer base by 230% and business customers by 400%. Revenue increased 800% during this period, the company says.
Plans for the cash: Cloud Paper plans to make significant investments in supply chain, product development, and hiring and move more quickly into new product launches and distribution channels.
Fritsch said they’ll be talking to businesses of all sizes to convince them to switch to tree-free paper products. The hope is that a post-COVID-19 resurgence for entertainment and hospitality businesses will ignite further growth.
And while Cloud Paper is not yet on the shelves of the local Target or Fred Meyer, Fritsch said to expect updates on new distribution deals in the coming year.
Product differentiator: Fritsch pointed to price, quality and sustainability as key factors that make Cloud Paper stand above others that are using bamboo to make toilet paper. Some of those competitors even wrap their rolls in plastic packaging, which defeats the purpose of being an eco-friendly option, he noted.
In September, the National Resources Defense Council recognized bamboo products and Cloud Paper for disrupting the marketplace in its annual “Issue With Tissue” ranking of tissue products and manufacturers.
“Finally, both large and small companies are offering tissue products that don’t flush our forests down the drain,” the organization said.
Total funding: Cloud Paper, which got started with $500,000 in friends-and-family funding and raised a $3 million seed round in September 2020, has raised $8.5 million to date.
Last word: Fritsch said that whether it’s Amazon vets like Bezos or Wilke or anyone else showing interest in Cloud Paper, the industry very much has a supply chain problem to solve along with its sustainability goal.
“We’re looking at and sourcing new, renewable fibers that might be coming across the globe. You’re moving around a big, bulky product; you’re shipping it direct to homes; you’re building distribution channels and physical retail. In a lot of ways, this is very much an operations and supply chain problem. I think certain folks are attracted to that, they built careers in solving big, meaty supply chain problems. They want to come in and help solve that but do it in a way that, if we can do this right, you’ll see real material environmental change as well.”