30 April 2024
Xefco, the sustainable manufacturing tech company, today announced it has raised AUD$10.5 million in its latest funding round led by Australian deep tech fund Main Sequence, to reduce textile emissions and create a greener supply chain for the fashion industry.
The investment from other new backers, Breakthrough Victoria, Virescent Ventures, investing on behalf of the Clean Energy Finance Corporation (CEFC) and existing shareholders, Investible and Voyagers Climate-Tech Fund, will help grow the team, as well as commercialise production of Xefco’s patented water-free textile finishing and dyeing solution, Ausora.
The textile industry is one of the world’s biggest polluters with textile finishing and dyeing responsible for a fifth of global industrial water pollution and 3% of global carbon emissions. It’s also the second largest industrial user of water after agriculture.
“The existing wet processes used to put colour and other functional properties on fabrics have the biggest environmental footprint of the entire fashion supply chain. These outdated, resource-intensive operations have not changed in centuries. It’s destroying our waterways and our planet. We’re determined to create a greener supply chain for the fashion industry,” said Tom Hussey, CEO and Founder of Xefco.
Co-founded in 2018 by Tom Hussey and Brian Conolly, Xefco has spent the past six years advancing innovative textile solutions. Its first product XReflex, which increases the thermal efficiency of insulated clothing, is already used by some of the world’s leading apparel and fashion brands including Zara and The North Face.
With its latest innovation, Ausora, Xefco has discovered a way of dyeing and finishing textiles without water. Using its unique shower plasma process, Ausora produces the same look, feel and performance properties without the environmental footprint.
Ausora’s process can be used on any textiles including natural and synthetic materials. Xefco already has a number of pilot projects underway with some of the largest sportswear, outdoor and fashion brands using its Ausora system to colour and finish apparel.
“Our Ausora systems have been designed to plug and play into existing supply chains to help brands and manufacturers easily transition to a cleaner textile process. Dyeing and finishing drive the biggest impacts in the textile supply chain. Whereas, compared to conventional wet dyeing and finishing, our process eliminates the use of water and cuts energy, chemical consumption and cost. Our technology has the potential to stop millions of tonnes of waste entering our waterways and CO2 from entering our planet,” added Hussey.
Based at Deakin University’s ManuFutures hub at the Waurn Ponds campus, Xefco’s impactful technology has been recognised by grants including up to $4 million from Deakin’s Recycling and Clean Energy Commercialisation Hub, supported by the Australian Government’s inaugural Trailblazer Universities Program. This builds on funding Xefco received as a key partner in the ARC Research Hub for Future Fibres at Deakin’s co-located Institute for Frontier Materials and previously from the Innovative Manufacturing CRC (IMCRC). Xefco also took part in Cicada Innovation's Tech23 event last year.
Commenting on its investment into the company, Jun Qu, Investment Manager at Main Sequence added “Xefco addresses an often-overlooked element of the fashion supply chain, one that is critical to global climate repair. There’s no sustainable future without sustainable fashion and we see immense potential for Xefco to accelerate the decarbonisation of the global textile industry.”
With its latest capital injection, Xefco plans to nearly double its headcount in 2024 and scale its manufacturing process.
Investor quotes:
Alex Oppes, Investment Director at Virescent Ventures said: “The textile industry is one of the world’s biggest polluters – greenhouse gas emissions from the sector are greater than international aviation and shipping combined. It’s clear that there is a significant global need for the textiles industry to step up to reduce emissions and polluting practices. Xefco’s technology is a great Australian innovation that enables manufacturers to take the lead in sustainability, cut their carbon footprint and promote a circular economy.”
Grant Dooley, CEO at Breakthrough Victoria said: “We believe Xefco has the potential to move major global fashion brands towards more eco-friendly and efficient manufacturing processes that are safer for workers, water-free, eliminate water pollution and reduce carbon emissions. With research and development based in Geelong and 10 regional Victorian manufacturers already collaborating with Xefco on design and manufacturing, BV believes this investment can help establish Victoria as a leader in advanced textile manufacturing systems.”
Ben Lindsay, Investment Manager at Investible said: “Since our initial investment, we've consistently been impressed by the exceptional team at Xefco. Under Tom's leadership, Xefco has successfully achieved their initial objectives, notably including the development and validation of their commercial-scale coating system, which has garnered recognition from some of the industry's leading textile manufacturers and brands.”
Francisco Dias Costa, Investment Manager at Nightingale Partners said: “Nightingale Partners has supported Xefco founders Tom and Brian for over ten years, first in Zhik and now in Xefco, and we are delighted with their progress. We expect Xefco to carry the flag for Australian engineering ingenuity and significantly reduce the textile industry’s water, energy and chemical pollution by introducing a more sustainable dyeing and finishing technology.”
About Xefco:
Xefco is an Australian-owned company that creates innovative textile and coating technologies. Founded in 2018, Xefco’s mission is to help brands and manufacturers reduce environmental impact without reducing textile functionality. To achieve this, Xefco has developed manufacturing solutions which can be plugged into existing supply chains.
Xefco’s technologies are now used by some of the world’s leading technical apparel and fashion brands, including Zara and The North Face. As Xefco expands its innovation — including its two patented products XReflex and Ausora — it progresses the textile and garment industry to a more sustainable future.
Together with a small group of founding shareholders, including private equity firm Nightingale Partners, co-founders Tom Hussey and Brian Conolly have built Xefco to become a global leader in textile and coating technologies.
In 2024, Xefco raised $10.5 million in seed extension funding. Its recent backers include Main Sequence, Breakthrough Victoria, CEFC (Virescent), Investible and Voyagers Climate-Tech Fund.