More than just capital: banks as partners to start-ups

Vanilla flavouring is found in cakes, creams and even toothpaste. What many people don’t realise is that most of the vanillin used does not come from vanilla pods, but is produced synthetically – mostly from petrochemical raw materials such as crude oil or natural gas.

This is where the Swiss cleantech start-up Bloom Biorenewables comes in. It is developing processes to convert wood and by-products from agriculture and forestry into basic chemical building blocks.

The result is high-quality molecules such as vanillin and other ingredients used in the cosmetics and petrochemical industries (plastics, adhesives). In future, the same technology is also set to provide building blocks for bio-based plastics.

From the laboratory to the market

Bloom Biorenewables emerged from research at EPFL. One challenge was to embed the technology within a viable business model.

“Technology alone does not make a company,” says Florent Héroguel, co-founder and co-CEO of Bloom Biorenewables. “The key is to identify the right products, markets and customers.”

Investors: the key to success

The road to market is a long one. As well as capital, it requires experience, networks and strategic guidance. Banks can offer far more than simply providing financial support.

The collaboration between Bloom Biorenewables and Lombard Odier Investment Managers (LOIM), the asset management arm of the Lombard Odier Group, is a good illustration of how this works in practice.

The bank took a stake in the western Swiss company as part of a funding round. The investment was made via the private equity Plastic Circularity Fund, which invests in companies developing solutions for a circular economy for plastics.

“We only invest if three conditions are met,” says Alexandre Ouimet-Storrs, co-lead of LOIM’s Plastic Circularity Fund. “The solution must have a positive environmental impact, be producible at competitive cost, and offer at least the same performance as the fossil-based product.”

As a minority investor, Bloom Biorenewables also provides support on strategic issues – such as scaling up production, acting as an observer on the board of directors, or recruiting senior management.

Capital, network and expertise

Through LOIM, Bloom Biorenewables has gained access to contacts within industrial companies as well as initiatives such as the Alliance to End Plastic Waste and the Circular Bioeconomy Alliance.

“We don’t just contribute capital,” says Ouimet-Storrs. “We also bring our network, our experience and our expertise. We are patient investors – but not passive ones.”

For Bloom Biorenewables, this added value is crucial. “What’s more, the support from Lombard Odier Investment Management lends us credibility,” says Héroguel.

Growing step by step

Bloom is initially focusing on high value-added applications, such as fragrances and flavourings, and ingredients for the cosmetics industry.

This allows the technology to be tested on an industrial scale whilst paving the way for entry into larger markets such as bio-based plastics.

Production is growing step by step. Rather than investing in its own large-scale plant at an early stage, Bloom Biorenewables is initially collaborating with industrial partners and steadily increasing its production capacity over time.

A dedicated production line will only be established once demand has grown sufficiently. This reduces risk and facilitates scaling up.

The example of Bloom Biorenewables and LOIM shows that banks do more than just finance innovations – they support them with specialist knowledge, complementary networks and a long-term strategy right through to market readiness.

You can listen to the full conversation in French on the podcast «Plus que de simples investisseurs : comment les banques accompagnent les entreprises sur le long terme».