GFRP acquires edible packaging startup DisSolves as it embarks on pilots with ‘some of the largest food producers’

Generation Food Rural Partners I, LP (GFRP), a fund created by early-stage investor Big Idea Ventures, has acquired edible packaging startup DisSolves as it gears up to run pilots with leading CPG companies.

Founded by chemical engineer Jared Raszewski in 2018, Pittsburgh-based DisSolves has developed patented edible films that dissolve rapidly in hot or cold water, milk, and juice, without leaving any residue. Applications range from protein pods, instant coffee packs, and pre-portioned infant formula, to encapsulants and nutraceuticals.

‘We pivoted to an M&A transaction because it made the most sense’

An inception stage venture fund, GFRP was created to partner with research universities across the US to launch new companies. It typically writes seed stage checks for $1 million, with follow-up checks of up to $5 million.

In the case of DisSolves, however, GFRP took a different approach, BIV chief investment officer Tom Mastrobuoni tells AgFunderNews.

“When we met Jared, it was clear to the GFRP team that this is a founder, who when given the right tools, including the capital our ownership model brings, would quickly get to the next level. We then did what we ask our portfolio company leaders to do, we pivoted, in this case to a M&A transaction because it made the most sense.”

Following the deal, Raszewski is staying on as chief product officer, while Scott Bolin, founder of biomaterials startup Tethis, has been brought in as president. Bolin is also CEO of TerraSafe Materials, a startup created by GFRP to license university IP to develop novel materials to reduce the amount of plastic waste entering the environment.

“The demand we’ve seen from food companies tells us that we’re on the right track. I am excited to start working with GFRP because thanks to the fund’s resources and support, we’ll be able to fulfill pilot programs with some of the largest food producers in the industry.” Jared Raszewski, founder, DisSolves

PVA alternatives

Edible films aren’t new, but are typically made from polyvinyl alcohol (PVA), a petrochemical-derived film used in laundry and dishwasher pods.

While the FDA considers PVA to be GRAS (Generally Recognized as Safe) for edible food packaging, it is not seen as a consumer-friendly addition to food labels, prompting startups such as DiSolves and Mi Terro (which recently teamed up with Lipton to develop dissolvable tea pods) to explore more ‘natural’ alternatives.

DisSolves combines sodium alginate (a polysaccharide from brown seaweed), pullulun (a polysaccharide produced via microbial fermentation), sugar alcohols, and solubility aids to create films that are robust enough to run through packaging machinery but will still dissolve in cold water in 30 seconds, says Raszewski.

“We can use it to package individual packages, something like a stick pack, where you throw the whole thing in water and you don’t need to throw away plastic. But we’re also seeing a lot of interest for things like [individually pre-portioned] protein pods, which enable companies to charge a lot more than they can for loose powder.”

He adds: “It’s close to what you’d use in a vegan gelatin capsule, but we’ve adjusted the formula to make it fast-dissolving and more suitable for packaging machines. All of the ingredients are natural, vegan, GRAS, and approved for consumption. Part of our IP is basically a blend of solubility aids that helps it be robust but still dissolve quickly.”

Asked how DisSolve’s tech compared to other companies making PVA alternatives, he says: “There are other brands out there using sodium alginate but ours will dissolve faster with a similar performance to PVA, which manufacturers like, but don’t want to put on product labels.”

The manufacturing set up

To date, Raszewski has had inbound inquiries from startups to multinationals in industries from vitamins and supplements to instant coffee, soup mixes, and household and personal care products that are looking to replace PVA to meet ‘plastic-free’ commitments.

As for manufacturing, he says: “We work with a pharmaceutical facility that produces breath strips and we’ve adapted that process so we can produce rolls of our film at their facility. They’d be able to produce roughly 100,000 pods-worth of film day. We also work with contract pod producers. There’s one already set up to do food that can do the pod packaging as well.

“Ultimately we’d like to bring that in house, but that’s how we’re doing our pilots now so we don’t have to spend money on equipment up front.”

While Raszewski’s films are more expensive than PVA, albeit with cleaner labels, they are cost competitive with some of the multi-layered packaging that firms are seeking to replace, he claims.

The go to market strategy

To date, DisSolves has signed 10 pilot agreements to test its patented technology, says Raszewski. “These are in the R&D phase, where we’re taking products and testing them for the company. From there, we move to small production runs.

“So that’s why I’m excited about the GFRP acquisition as it’s going to give us the resources we were lacking. We already have the customer signed off, we have the IP, and now it’s just about scaling up and executing.”