Alt. Leather raises $1.1m in seed round to drive plant-based leather alternative

Alt. Leather, a startup established in 2022 by Tina Funder, the founder of Life On Mars vegan ‘leather’ handbags, has raised $1.1 million in a seed round that aims to produce Australia’s first 100 per cent plant-based alternative to leather.

Buoyed by progress in achieving a base material that looks and feels like leather, Alt. has secured the backing of Startmate, The Austin Group, Robyn Denholm’s family office Wollemi Capital Group and LaunchVic’s Alice Anderson Fund in the capital raise.

The funds will be used to provide the Melbourne-based Alt. Leather with access to advanced equipment and research through Melbourne’s top universities, while progressing the filing of a provisional patent and a small-scale sample production in collaboration with key brands.

While the identity of these brands has not been disclosed, Funder says that through the capital raising Alt. now has an investor base with expertise that covers ‘all aspects of our business from fashion and manufacturing to finance and government’.

“We have the best in the business to call upon when required,” she says.

Funder first ventured into the vegan leather sector with the launch in 2022 of Life On Mars (LOM) handbags, made with a leather-like product that is partially bio-based and produced from cactus and apple. However, LOM products use polyurethane (PU) as a binder.

“That’s why I started Alt. Leather, because I couldn’t find any petroleum-plastic-free materials,” Funder tells Business News Australia.

“The majority of leather alternatives on the market are made using petroleum-based plastics like PU/PVC.

“Alt. Leather is 100 per cent bio-based, made from ag-waste and regenerative plants (with) zero petroleum plastics and zero animal products.”

Funder has created what is described as a ‘world-class, patentable leather alternative made entirely from plants’.

She says the material has the capacity to replace carbon-intensive animal and petroleum-based synthetic leathers at a time when major brands such as Apple, Tesla and Stella McCartney are shunning animal leather.

“I tested many of the biobased alternatives on the market and couldn’t find a suitable material that was petrochemical-free,” says Funder.

“Given the current climate, it felt like a significant commercial opportunity with the benefit of a positive environmental outcome.”

Over the past year, Alt. has grown its research team from one to four, with the team led by chief scientific officer Tuan Nguyen.

“By adopting green chemistry innovation, we have developed patentable material composition and technology to produce a leather alternative that is both durable and commercially scalable,” says Nguyen.

“Our material uses a combination of waste streams and regenerative plant derivatives available in abundance globally, making Alt. Leather a reliable and sustainable choice.”

Alt. Leather is aiming to become the ‘default choice’ alternative to traditional leather globally with a mission to also eliminate the need for petroleum-based synthetic leathers.

Alt. Leather cites research from the Material Innovation Initiative that shows the market for global synthetic leather is worth about US$70 billion ($106 billion) globally, with just 3 per cent of that total being met by sustainable alternatives.

“That’s millions of tonnes of fossil-fuel-derived plastic that we can eliminate from the world; the impact we can have is enormous,” says Funder.

LaunchVic CEO Dr Kate Cornick says the Alice Anderson Fund is backing Alt. Leather in its mission to bring ‘sustainability to our everyday lives with next-gen materials’.

“We look forward to supporting her at every step of the journey as the company scales and creates jobs - the ultimate goal for us at LaunchVic,” says Cornick.

Another participant in the seed round, Startmate, has been with the company from the very beginning.

“Startmate was proudly the first investor in Alt. Leather when it was merely an idea,” says Startmate’s head of investments Brady Flockart.

“The speed of product development since is akin to a software company. Despite discouraging historical data indicating fundraising challenges for solo-women founded hardware companies, Tina has raised a great round with great investors.

“This is testament to her audacious ambition and unwavering commitment to transform it into reality.”

Wollemi Capital Group CEO Victoria Denholm also credits Alt.’s success to date on Funder’s drive and innovation.

“The creativity of entrepreneurs like Tina Funder helps us reimagine a world where we can enjoy beautifully crafted goods in a sustainable and environmentally friendly way,” says Denholm.

“At Wollemi Capital Group we are committed to creating a positive impact for generations to come and that is what drives us to support like-minded founders like Tina.”

The Austin Group is another investor that has supported Funder for years.

 “We have been impressed with the speed at which the Alt. Leather team are operating and developing their biomaterial,” says CEO Will Austin.

“The Austin Group has supported Tina with her ambition towards a more sustainable fashion future for a number of years and look forward to working with her on this exciting phase of commercialisation.”