How Materia Bioworks formulated a pricing strategy that resonates with customers

This Toronto-based cleantech startup developed a smart platform that helps companies speed up R&D on sustainable packaging. After working with MaRS advisor Mike Abramsky, the team is now gearing up for the product’s launch.

It took seven years for Toronto-based Materia Bioworks to take its bioplastic products from the lab to manufacturing. But whether they used biobased polymers, natural fibres and agricultural waste streams, the team kept coming up against the same problems: long research and development cycles, fragmented supply chains and costly scale-up processes. In 2023, the startup decided to find a solution that would streamline production — not just for themselves, but for the entire industry. “If we can make the supply chain easier for companies, it increases the demand for the biomaterial suppliers, which allows them to get more purchase orders and build larger plants and hopefully lead to more global adoptions of biomaterials,” says co-founder and CRO Rajan Manocha.

At its MaRS Waterfront office, the startup’s team of engineers got to work, developing software that helps R&D teams develop sustainable products quickly and more affordably. Its Materials Application Prediction System (MAPS) takes the specifications of a petroleum-based polymer and generates optimized bioplastic formulations. Another module acts as a digital twin that connects to manufacturers’ devices, optimizing processing conditions in real time, reducing the risk and amount of trial and error in the lab, while also connecting users directly to material suppliers. “The goal is not to eliminate R&D,” says Manocha. “It’s to enable R&D to work faster and smarter.”

The founders had plenty of experience in hard tech, but as they built a software platform they faced new challenges. Chief among them was pricing. “We didn’t know how to even think about it,” says Manocha. At first, the company charged an annual subscription fee, but with customers of different sizes and with different needs, the pricing didn’t always reflect the value of what they were offering or support their ability to grow. Last November, the company turned to MaRS advisor Mike Abramsky for support.

Know your value and be able to articulate it

Over the next three months, Abramsky worked with the startup, both in a small cohort and one on one. Abramsky designed a framework that covered five pillars — including top business outcomes and ROI — anchored by a calculator he built for the venture, which helped the team think about the value of their formulation. “It’s more the methodology of understanding how to think about pricing and how we can explain that to decision-makers,” says Manocha. “Mike helped us narrow down our messaging to ensure we were able to price based on value.”

Abramsky also helped the team understand how to apply that idea to different areas of their target market. “Mike helped us segment the customers based on company size,” Manocha says. “Obviously, dealing with a larger multinational, like a Pepsi or a Lay’s, is going to look a lot different than a mom-and-pop cosmetic shop.”

Throughout the process, Abramsky helped the startup zero in on their value proposition in three key areas: cost, revenue and risk. He explains: “It forces the venture to articulate its benefits in terms of being able to offer a customer either an improvement in revenues, a reduction in cost or a reduction in risk.”

Building a product for any industry to use

The company is currently beta-testing MAPS, a process that has already generated a lot of information and will become proof points and case studies when the company launches it as a standalone product later this year.

The company has designed its platform so that it can be used in multiple sectors, including pharma, industrial manufacturing, cosmetics, and food and beverage. “We really are focused on providing something that’s customizable,” says Manocha.

The hope is if they can help the fragmented supply chain and make it easier for companies to use, that will increase the demand for biomaterial suppliers and, with luck, bring the prices down. “We want more bioplastics and biomaterials to be used globally,” says Manocha. “That’s always been our goal.”

Founded: 2023
Program: Core/Cleantech
Services: MaRS advisory

MaRS programming is funded in part by the Government of Canada through the Federal Economic Development Agency for Southern Ontario and by the Province of Ontario’s Ministry of Economic Development, Job Creation and Trade.

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