Estonia-based RAIKU raises €8.8M to develop eco-friendly alternative to bubble wrap

Tallinn-based RAIKU, a company specialising in eco-friendly packaging alternatives, announced that it has received a €5.65M grant and equity investment from the European Innovation Council (EIC) and €3.15M from private sector investors.

EIC Accelerator helps deep tech companies in seed and growth stages not yet viable for private funding. It combines public grants with long-term equity investment, aiming to be Europe’s leading early-stage deep technology investor.

Karl Pärtel, co-founder of RAIKU says, “Given the current economic climate, this kind of financing is ideal for us. It’s also a very important quality mark for both customers and future investors because we have run through the gauntlet of experts and investors.”

“In addition, EIC will involve us in various events, trade fairs and overall business opportunities,” adds Pärtel.

Redefining the packaging sector for the modern age

Founded in 2021 by Karl Pärtel and Rain Randsberg, RAIKU specialises in crafting protective, and entirely natural packaging materials with a low CO2 footprint. 

RAIKU claims to offer chemical-free materials that can be safely returned to nature as nutrients, addressing environmental concerns effectively.

Karl Pärtel says, “Our competitors are bubble wrap, paper and cardboard, all of which require a huge amount of resources for production – including wood, chemicals, an insane amount of water and energy.”

RAIKU has created a packaging filling material using wooden springs. Despite its simplicity, its industrial production is complex, says co-founder Pärtel. 

The product stands out due to its resource efficiency, expanding volume of raw material volume by 15-20 times, without chemicals, and minimal water and energy usage. Its spring structure offers ideal shock absorption properties.

“In Europe, only about 60 per cent of packaging can be recycled, and we generate millions of tons of packaging waste every year. In addition, the carbon footprint of production processes are often understated” adds Pärtel.

RAIKU accelerates its development through strategic collaborations, including partnerships with the AIRE center for artificial intelligence (AI) and robotics, Taltech Wood Laboratory for wood industry expertise, and private sector ally MindTitan for AI advancements.

“There are many more partners in engineering and intellectual property, and we are also very strongly supported by the Estonian startup community, the state, EAS and many others,” says Pärtel.

Capital utilisation

RAIKU will use the proceeds for the development of chemical-free, compostable packaging material. It also plans to establish the first factory and expand production globally.

Co-founder Pärtel says, “Our primary production is already going mainly for export across Europe, and dozens of international companies are waiting in line.”

“The European Innovation Council agreed that our technology can make a significant contribution to meet the European Union’s Green Deal goals and that our products and production technology have a unique value proposition.”

The funding will also help RAIKU in expanding its team, further collaborations, equipment acquisition, and the establishment of a new factory.

According to Pärtel, they are currently finalising their development work of fully automated industrial lines.

“Fortunately, we’ve put all our resources into development so far, and we have a seriously competent development team of seven industrial engineers. In addition, we have a wide cooperation network from both the private sector and the academia,” adds Pärtel.