How CTK Bio uses R&D support to compete on cost

For CTK Bio, the fight to replace plastic begins with cost.

The startup has already proved that creating biodegradable alternatives is possible, but matching the price of conventional plastic requires nonstop experimentation, and a steady flow of capital to fund it.

“Let’s just create value for the customer, and in return, they transition, and therefore make their model more sustainable.”

Daniel Shum, CTK Bio

“We need to be able to match the cost of traditional plastic, or even be under that, in order to disrupt this plastic industry,”  Daniel Shum, Chief Operating Officer at CTK Bio, said on an episode of the “What The Tech” podcast. That requires relentless research and experimentation.

At CTK Bio’s Surrey, British Columbia lab, the work begins with what most companies discard.

Hemp by-products from the cannabis industry, biomass streams piling up inside factories, and other costly waste materials become the building blocks for a new kind of bioplastic. 

The company transforms landfill-bound plant and plastic waste into resins that can be molded into fully biodegradable products—everything from camping cutlery to golf tees. 

Shum’s goal is to make sustainability the default choice. 

“Let’s just create value for the customer, and in return, they transition, and therefore make their model more sustainable,” he said.

Meeting that goal means running three distinct R&D stages: synthesizing polymers, refining their composition, and processing them for mass production. It also requires close work with global manufacturers to engineer materials that fit their exact needs.

That level of trial and error doesn’t come cheap. Canada’s SR&ED program helps offset the cost, but accessing it can be daunting. CTK Bio’s first SR&ED provider was chosen mostly on price, and the experience fell flat. 

“Needless to say, we had a terrible experience with them,” Shum said.

In year two, the company turned to Boast, which combines technical and R&D tax expertise to help companies access SR&ED tax credits fast. 

“Generally, it could take a year, two years, before someone even picks this up and has the level of understanding of what we’re trying to do,” he said. Boast’s team was able to quickly learn CTK Bio’s language and translate complex science into strong SR&ED claims that returned more capital to the business.

Beyond capturing credits, CTK Bio has also tapped into Boast’s QuickFund program, which lets companies access a portion of their SR&ED refund early. For a growing cleantech startup, having early access to cash can allow teams to start on activities that will increase their SR&ED eligibility for the next quarter.

“I can’t tell you how many times we were able to leverage that program to work in our favour from a cash flow perspective, it’s just so helpful,” Shum added.

This year, CTK Bio formally launched its solutions platform to help businesses comply with Canada’s single-use plastics ban, and recently began supplying its products to businesses in the United States.

But at home, adoption is stalled. Current legislation still categorizes compostable plastics alongside conventional single-use items, giving businesses little incentive to adopt them.

Rather than wait for regulation to catch up, CTK Bio is putting more resources into new R&D, including developing compostable film that can bond directly to paper. It’s the kind of costly, iterative work that depends on steady access to funding.

For Shum, programs like SR&ED and partners like Boast are what make that possible.

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Feature image courtesy of CTK Bio.