Why H&M and Inditex Are Betting on Lab-Grown Cotton

Ginning, blowing, carding, drawing, roving, spinning, weaving, dyeing, cutting, sewing, ironing, shipping and trucking — all the steps it took to turn some cotton bolls into your T-shirt. Those processes also contribute the most to the planet-warming impact of the clothing fibre.

Growing cotton bolls itself sucks up huge amounts of water, pesticides and fertilisers. For all the water you’ll ever use to wash your cotton T-shirt over its entire lifetime, it will have taken 50 times as much water to grow the cotton that went into it. Cotton uses about 2.3 percent of global arable land and accounts for 16 percent for all insecticide sales. And the fashion industry has been forced to reckon with allegations of forced labor and poor working conditions in certain cotton-harvesting regions.

Boston-based startup Galy says its found an alternative that avoids all of these problems by growing cotton in a lab. The company shared an evaluation by environmental consultancy Quantis to show that, at an industrial scale, its process reduces water use by 99 percent, land use by 97 percent and the negative impact of fertilisers by 91 percent when compared with conventional cotton.

Brazil-born Luciano Bueno, chief executive officer of Galy, founded the company in 2019. But cotton has featured in his business life for much longer. “I started selling T-shirts door-to-door just to pay my bills in high school,” he said. His first job at Deloitte involved working for textile companies. His first company Horvath Co., which he founded in 2015, tried to develop sweat-resistant shirts.

But after Horvath got stuck in an exclusivity deal, he took a break and studied entrepreneurship in Silicon Valley. It was during the heyday of fundraising for lab-grown meat startups that Bueno thought he should apply the same idea to cotton. It’s taken Galy a few years, but now the startup has shown enough progress to secure investments from huge cotton consumers: Hennes & Mauritz AB and Zara-owner Inditex SA.

Galy takes cells from a cotton plant, adds them to a large vat and feeds them sugar. After they have sufficiently multiplied, Galy technicians use their genetic understanding of the plant — which has been developed over decades of research — to activate certain genes and deactivate others. The result is the cell transforms and elongates into a cotton fibre.

So far, Galy has only been able to make a few kilograms of vat-grown cotton. If it can make more at scale, the company has big dreams to also make lab-grown cocoa and coffee powders. At its stall at the Breakthrough Energy Summit in London in June, Galy showed off all three products.

Buyers of cotton care about strand length, strength and purity. Galy already has purity given the process happens inside a vat and not in the open. That has helped it secure a $50-million deal with Suzuran Medical Inc. for medical-grade cotton, which Galy plans to supply over 10 years once it starts producing at industrial scale.

For clothing, Bueno says that Galy still needs to improve on strand length. That development will need investments in further research. In an announcement today, Galy said it had raised $33 million from Bill Gates-led Breakthrough Energy Ventures, H&M and Inditex — bringing the company’s total raise so far to $65 million.

Martin Ekenbark, lead of H&M’s circular innovation lab, said that the fast-fashion retailer is seeing a rise in the demand for cotton. “Customers prefer the hand feel of fabrics made with cotton,” he said.

After H&M stopped using cotton from China’s Xinjiang region in early 2021, following allegations of forced labor, it faced Chinese boycotts. H&M and other cotton consumers are keen to find solutions that can produce cotton without these risks.

Inditex has invested in more than 300 startups with the goal of finding new materials that have a lower impact on the environment, a company spokesperson said, and it’s now working with Galy to “enhance fiber quality through various proof-of-concept tests.”

Pound-for-pound cotton is much cheaper than meat and has a smaller market. The global cotton market is about $60 billion and cotton sells for a little more than $1 per kilogram, whereas the meat market is more than $1 trillion. That’s why Bueno’s focus is not just scaling up production, but also doing so at a tiny fraction of the cost of the process used for lab-grown meat.

There are a few things that help Galy. The plant cells only need sugar to multiply, rather than complex growth material used for meat. And given people aren’t going to be eating the cotton, Galy can use reactors that don’t have to adhere to as high hygiene standards.

The hurdles that remain aren’t small. Despite plenty of funding and investor enthusiasm, lab-grown companies have struggled to grow because of the finicky nature of biology and the struggle to sell the products at much higher cost than traditional alternatives. Galy will face the same problem and it’s raising money at a time when climate-tech investments have been shrinking. That’s one reason why Galy isn’t currently facing any major commercial competitors for developing lab-grown cotton.

Peter Turner, a partner at Breakthrough Energy Ventures, points out that Galy’s cotton today is at the same point lab-grown meat was in 2013. That’s when the Dutch researcher Mark Post made a 5-ounce burger that reportedly cost €250,000. That lead to a rapid growth in the number of startups chasing the prize, with funding for the sector peaking in 2021. Galy wouldn’t say what its cotton costs today.

“We fully expect competition to follow,” said Turner.

By Akshat Rathi

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