Cruz Foam closes; TemperPack acquires its patent portfolio

Cruz Foam, the Santa Cruz company that spent close to a decade developing compostable alternatives to plastic packaging, has closed. On October 13, TemperPack, a packaging company based in Virginia, said it had acquired Cruz Foam's intellectual property portfolio, which covers 23 patents and patent applications in several jurisdictions. The deal was done through an assignment for the benefit of creditors, a mechanism distressed companies use to sell assets and repay creditors outside formal bankruptcy. The price was not made public.

Founded in 2017 by John Felts and Marco Rolandi, Cruz Foam completed the Santa Cruz Works Accelerator in 2018 and went on to raise money from Sony Innovation Fund, At One Ventures and Regeneration.VC, with Leonardo DiCaprio and Ashton Kutcher joining as investors and advisers. An $18 million Series A followed in 2022. The company worked with Whirlpool and Atlantic Packaging, built protective packaging and insulated shipping products, was named to TIME's Best Inventions of 2023 for its Cruz Cool shipping container, and appeared on Fast Company's 2024 list of the world's most innovative companies. Felts, co-founder and chief executive, said he was proud of the technical work and glad TemperPack would carry the IP forward.

Toby Corey, who joined the board in 2020 and later served as executive chairman and chief operating officer, attributed the outcome largely to a gap between the technology and what buyers actually wanted. Customers in protective packaging and cold chain, he said, were purchasing performance, reliability, ease of use and economics rather than sustainability on its own. He argued that conviction is not the same as evidence, and that funding extends a company's runway without delivering product-market fit.

TemperPack intends to fold the acquired patents into its own research and development work on sustainable packaging.

For Santa Cruz County, Cruz Foam was among the better known local materials startups, having come out of a county accelerator and drawn national investors and press. Its closure is a practical reference point for other hard tech founders in the region weighing how far recognition and capital go in establishing a durable customer base.