With Innovate UK’s support, the company has refined its commercial strategy, secured over £160,000 in grants, and raised £935,000 in equity investment within a year, having recently closed an £1.2M pre-seed funding round. Carbon Cell is now scaling its sustainable solution to meet growing demand for plastic alternatives.

Carbon Cell’s fully compostable, high-performance expandable foam not only replaces plastic-based alternatives but also locks in carbon for centuries. With global demand for sustainable materials surging, Carbon Cell’s innovation has the potential to transform the packaging sector and beyond, significantly reducing plastic waste.

Liz Lee, Co-Founder and CEO of Carbon Cell, says: “Our product helps reduce reliance on petrochemical-derived materials, enabling sectors that require foam to transition away from plastic towards a lower-carbon alternative that generates less waste and minimises microplastic pollution.”

Guidance for investment readiness and growth

Carbon Cell began receiving tailored business growth support from Innovate UK Business Growth to strengthen its investment readiness and scale its operations after winning the Innovate UK Unlocking Potential: Begin award in 2023/24, a programme that was designed to support early-stage businesses with high-growth potential.

Innovation and Growth specialist Stuart Hartley started working with the team to strengthen its position and maximise its appeal to investors by developing a strategic action plan focused on investment readiness.

Liz explains: “With Stuart’s support, we’ve developed as an organisation, setting up management structures, project management and reporting functions, as well as defining commercial targets to reach investment readiness.”

The support led to Carbon Cell securing £120,000 in equity investment from Carbon13, a venture builder that supports startups tackling climate change, and the £15,000 Queen Mary Social Venture Fund, funding both R&D and initial trials.

With a focus on packaging as its first key market, Innovate UK Business Growth provided guidance on early-stage pilots and market segmentation to demonstrate real-world applications of the technology.

Carbon Cell also developed a robust intellectual property strategy through the Intellectual Property Office’s (IPO) IP Advance scheme, which is delivered by Innovate UK Business Growth. The scheme’s £2,000 grant enabled the company to refine its approach, offering greater clarity for investors and strengthening its market position.

Driving innovation with access to infrastructure

Carbon Cell also accessed industrial-sized equipment at Biorenewables Development Centre in York, helping refine product development and scale-up manufacturing through Innovate UK Business Growth’s £15,000 Research & Technology Organisation (RTO)/Catapult grant.

Liz adds: “When we left the university we started at, we lost access to labs and equipment – facilities necessary for development but costly to use on a pay-per-use basis. The RTO grant allowed us to regain access to some of these facilities, improving our product and processes while building a clearer plan for investment and future funding.”

Winning an Innovate UK Net Zero Living grant, worth £100,000, in March 2024 enabled Carbon Cell to explore the potential of its material for use in packaging and the built environment.

Early discussions with a European company had highlighted Carbon Cell’s potential as an alternative to existing building insulation materials, making the Net Zero Living grant a natural next step in testing and validating these applications.

Alongside this, the company participated in two funded built environment accelerators – the SHIFT London Future Industries Demonstrator and Undaunted’s Retrofit Accelerator – which further supported exploration of the material’s suitability for use in construction. Together, this work provided valuable insights into product performance, necessary optimisations for launch, and how the material could contribute to net zero goals.

With the support received, Carbon Cell was well-positioned to gain industry recognition, winning the BBIA (Bio-based and Biodegradable Industries Association) Startup of the Year Award in November 2024. The award provided valuable grant review time, intellectual property advice and professional support through BBIA partners.

Additionally, the company won a $35,000 award from Green Tech Europe through the Village Capital Accelerator Programme, extending its operational runway and supporting staff and R&D activities during a challenging fundraising cycle.

The pathway to scale

Carbon Cell’s innovation is set to make a significant impact on the UK economy by enabling widespread adoption of a viable alternative to expanded polystyrene (EPS) packaging. At the same time, its success supports the growth of the early-stage biochar industry, further contributing to the UK’s net zero ambitions.

The recent £1.2M pre-seed round will support three key areas: scaling pellet manufacturing to 20kg per hour to ensure commercial supply through 2026, conducting additional manufacturing tests to optimise the foam’s compatibility with industrial production equipment and fulfilling its first full commercial-scale order, delivering thousands of units to early adopters.

As the company prepares for rapid commercialisation, Innovate UK Business Growth continues to provide strategic support, helping Carbon Cell access key resources, refine its value proposition and connect with industry partners. With its innovative technology and a clear roadmap to scale, Carbon Cell is driving sustainable change in packaging and beyond.

With [Innovation and Growth Specialist] Stuart’s support, we’ve developed as an organisation, setting up management structures, project management and reporting functions, as well as defining commercial targets to reach investment readiness.

– Liz Lee, Co-Founder and CEO of Carbon Cell