Clothing start-up Xefco raises $10.5m for waterless dye process

A sustainable clothing duo from Melbourne, that sells products to the likes of Zara and The North Face, has raised $10.5m to fast track its next idea.

Xefco CEO Tom Hussey at Deakin University’s Waurn Ponds Campus.

A sustainable clothing start-up from Melbourne that sells products to the likes of Zara and The North Face has raised $10.5m to expedite its newest venture.

Xefco was founded six years ago by Tom Hussey and Brian Conolly, building its ability to produce clothing sustainably out of Deakin University.

Its first major success was in a heat radiation coating called XReflex, a process of applying ultra-thin, radiant barriers in clothing capable of retaining body heat. That technology went on to be used by Zara and The North Face in the likes of puffer jackets.

But it is its latest development that has turned the heads of several investors who have poured five times the amount of its initial seed raise into an extension round.

Xefco has developed a process of colouring and finishing textiles without excessive use of water. The start-up’s method involves applying insoluble pigments to fabric and then putting it through a plasma coating process. The plasma, which occurs in the form of an energised gas, breaks apart chemicals on the surface of the fabric, according to Mr Hussey.

The process is radically different from regular dyeing, which involves large amounts of water, excessive chemical use and applying heat to set the colours.

Xefco’s atmospheric plasma-coating process is radically different from regular dyeing.

Mr Hussey said the idea came about as a means of making the middle process of clothing manufacturing greener.

“When you look at the supply chain or how textiles are produced, there’s a lot of focus at the fibre end and recycling, the very start and then at the end of product,” he said.

“These are big problems that need to be solved but actually the biggest impacts in the supply chain lay in the dyeing and finishing processes. Those processes alone make up about 36 per cent of the carbon footprint, which equates to about 3 per cent of global carbon emissions.”

The method Xefco used to colour and finish fabrics, a process known as “novel plasma coating”, was common in the semiconductor industry, Mr Hussey said. It was also about 20 per cent more cost-efficient, and used far less energy and water.

The start-up’s current system is capable of coating fabrics at a rate of between 1m and 20m a minute.

Xefco was working towards developing what Mr Hussey calls a “coating-as-a-service” model, in which the start-up would take a volume commitment from a manufacturer and charge a fee per use.

That model would help offset some of the hardware costs and would help the start-up generate recurring revenue.

Deakin Associate Professor Alessandra Sutti and Tom Hussey Picture: Deakin University

Investors in the latest round include Main Sequence, which led, alongside Breakthrough Victoria, CEFC (Virescent), Investible and Voyagers Climate-Tech Fund. The start-up has also received $6m in grant funding from Deakin’s Clean Energy Commercialisation Hub, Future Fibres Hub and Innovative Manufacturing CRC.

Main Sequence investment manager Jun Qu said what impressed the firm was that Xefco was tackling an often overlooked part of the fashion industry

“Xefco addresses an often-overlooked element of the fashion supply chain, one that is critical to global climate repair,” he said. “There’s no sustainable future without sustainable fashion and we see immense potential for Xefco to accelerate the decarbonisation of the global textile industry.”

Virescent Ventures investment director Alex Oppes said it was refreshing to see an Australian start-up tackling a global emissions problem.

“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,” he said.

“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.”