Investment Notes: Xefco

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June 1, 2023

A new deep tech revolution of sustainable textile production has arrived.

The fashion industry is estimated to be responsible for 10% of global carbon emissions – more than international flights and maritime shipping combined. Additionally, textile production is estimated to be responsible for about 20% of global clean water pollution from dyeing and finishing products.

Making matters worse, the textiles industry relies primarily on 98 million tonnes per year of non-renewable resources including oil to produce synthetic fibres, fertilisers to grow cotton, and chemicals to produce, dye, and finish fibres and textiles. According to the European Environment Agency, textile purchases in the EU in 2017 generated about 654 kg of CO2 emissions per person! If the industry continues its current path, by 2050, it could use more than 26% of the carbon budget associated with a 2°C pathway.

Xefco is a cutting-edge deep tech startup focused on developing advanced dyeing and finishing processes in collaboration with Deakin University. Founded by Tom Hussey and Brian Conolly, Xefco has developed two core products, the Ausora plasma coating system & XReflex insulation materials.

Today, we are pleased to share our latest investment from the Investible Climate Tech Fund in Xefco. We are excited to be backing Tom, Brian and the wider Xefco team as they pave the way for a more sustainable, innovative future for the textiles industry.

The need for “dry” processing

When dyeing clothing, considerable amounts of energy are consumed in heating dye baths, drying textiles and curing finishes. “Processing” includes the following 3 stages:  

  1. Pre-treatment - cleaning fibres in preparation for dyeing and finishing steps
  1. Dyeing or colouration - applying dyestuff on textiles to achieve colour
  1. Finishing - application of treatment to make textile a desirable quality or functionality
Figure 1 Taken from https://reports.fashionforgood.com/report/textile-processing-guide-pre-treatment-colouration-and-finishing/chapterdetail?reportid=547&chapter=2

In recognition of the significant impacts of these processing stages, Fashion For Good, a global initiative to inspire change and drive the collective movement to make fashion a force for good, did a call out for innovations in textile pre-treatment and colouration, that are set to accelerate the shift from wet to mostly dry processing. And, while water-less dyeing using compressed CO2 has existed for over 30 years, current developments have been unscalable.

Roll-to-roll plasma coating technology

While plasma coaters are utilised in other industries, their application to the textile industry has been limited by the requirement of a low-pressure vacuum environment, a slow and energy-intensive process not feasible for the textile industry.

Xefco's equipment enables processes that were previously not feasible for the textile industry.

Xefco has developed a unique shower process that allows the plasma coating to be applied at atmospheric pressures without a vacuum. In doing so, Xefco’s systems deliver significant efficiency improvements, reducing energy expenditure and cost.

This means colour and functional coatings can be applied to any fabric, with savings in energy (86%), water consumption (100%) and chemical consumption (88%) all resulting in both a lesser environmental impact and targeting a ~20% cost reduction compared to conventional processes. Additionally, their roll-to-roll and modular system can apply the coatings much quicker and scale with the customer's requirements.

Founder-Market Fit

Xefco was co-founded by multiple business founder Brian Conolly whom previously founded Lake Technology (exited to Dolby) and Zhik, and Tom Hussey, his former Head of R&D at Zhik. The team at Xefco already have an established and successful track record of material innovation and a team with a history of taking products to market.

During their time at Zhik, they identified and became obsessed with the possibilities of plasma coaters to both dye and alter the functional properties of materials without water. Stepping back into the mentor role, Brian opened the gates to former apprentice Tom to take the lead on developing and commercialising what would become their Ausora plasma coating technology at Xefco.

The team was so passionate about the potential of solving this problem that they exited Zhik and began putting all their efforts into it. In conversation with Tom and when talking to those who work with him at Xefco or in collaboration on development, it doesn’t take long to identify Tom’s commitment to solving this complex problem.

Trailblazing with Deakin University

Xefco has received funding from Deakin University’s Recycling and Renewable Energy Commercialisation Hub (REACH) as part of the prestigious national Trailblazer program to address Australia’s national manufacturing priorities.

Through the Trailblazer program, Xefco will receive up to A$4 million in co-investment over the next four years to scale and commercialise Ausora – the sustainable plasma dyeing and finishing technology.

As a result of this program, the already remarkable team at Xefco have been able to directly access Deakin resources for support across innovation and optimisation and translation of the research being done within Deakin University labs to the Ausora system.

We believe Xefco represents the future of sustainable textile processing. With their ground-breaking research, technology and commitment to making a positive impact, we can’t wait to see what the team achieve over the coming years.

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