Cloud Paper, a company which provides sustainable toilet paper to consumers, recently raised $3 million in its latest funding round with some celebrity investors, such as Mark Cuban, Gwyneth Paltrow, Ashton Kutcher, and Guy Oseary of Sound Ventures, taking an interest. Ryan Fritsch, Cloud Paper’s co-Founder, joins The Final Round to discuss the business and its importance, as well as its growth.
– Welcome back to “The Final Round.” Well, toilet paper, it’s one of the hot commodities of 2020 after the pandemic led people to stockpile it. People just could not find it anywhere, leading to this buying frenzy that in the end caused a shortage. Well, we’re going to talk to a new startup that’s taking on big names, like Charmin and Scott, with a tree-free option. And it’s backed by some pretty big names.
So joining us now, we want to bring in Ryan Fritsch. He’s a co-founder of Cloud Paper. And Ryan, some of those big names, Mark Cuban, Gwyneth Paltrow, Ashton Kuchar, just to name a few that have invested in your company, so first just talk to us about how your product is made, since it’s not made from trees, and also just the opportunity that you identified and that you see in the market.
RYAN FRITSCH: Yep, absolutely, and it’s great to be here. Thanks for having me. So yeah, we were on a mission to go save and protect a billion trees. And we’re starting with tree-free toilet paper. And so we actually use ultra fast growing bamboo in all of our products.
So bamboo is actually a grass. It’s the fastest growing plant in the world. It sequesters four times the amount of carbon, compared to an equivalent tree, and releases more oxygen, and can be harvested over and over and over again for up to 50 years without it requiring any sort of replanting. So it’s an ultra-renewable fast growing plant. And you can make a pretty soft paper out of it.
Beyond just moving away from trees, we’ve also looked at how toilet paper and paper products are packaged today. And you walk through a Target or any retailer, and it’s wrapped up in plastic on the shelves. And so all of our product is also all plastic-free.
We use recycled fibers throughout and investing heavily in carbon offsets for transportation, so really starting from the very beginning and turning over, turning every rock we can to find ways to make our product and our company as sustainable as possible.
– Well, Ryan, it certainly is a good time to be in the toilet paper business. When we talk about the frenzied buying and how people just could not get their hands on toilet paper six or seven months ago, what kind of spike did you see in demand for your product? And how much of that has been sustained?
RYAN FRITSCH: Yeah, so we, on the household subscription front, starting in March when that panic buying really kicked off, we saw a spike about 800% just in several days to about one or two weeks. So we saw a lot of people shift into obviously buying more toilet paper for their home. Cloud Paper first started as a B2B company. Some of our earliest customers were co-working spaces, restaurant chains, gyms, and so that obviously took a hit.
And we saw people starting to buy for home, and so we quickly shifted our resources into households subscriptions and absorbed a lot of new customers. And they’re sticking around because the toilet paper is not something that’s talked about a lot.
People aren’t talking about it at the dinner table or at happy hour, so we came onto the scene and we shared some of the stats and really worked to educate our customers about the impact of deforestation. You know, we talk a lot about the equivalent of a Central Park is cut down every single day for US toilet paper, every day, around the clock.
And so we talked about that. And we talked about the loss in biodiversity from this deforestation and the impact that the paper industry is having on our planet. And it’s one of those things that once you see those stats, and you see that there is a alternative out there, you can’t unsee it. You can’t unsee the stats.
And so we actually saw– from panic buying, of course, we saw a good number of households sign up. And then our growth after that was all referrals, people telling their friends about it, people asking, hey, can I have a discount code to share with my friends. So all of our growth to date has been all organic and word of mouth.
– Ryan, you recently had a fundraising round for Cloud Paper. What’s the expansion plan for the company? Is it to move into more areas, what areas do you serve now? Or is it to expand into other paper products outside of toilet paper?
RYAN FRITSCH: Yeah, that’s right. So we did just announce a $3 million round. And like I said, we had some really notable, important names backing our company. And number one is everyone on that list is a huge sustainability advocate. So we were super excited about what we were able to do with that, with that seed round.
And there’s kind of a couple of things we’re going to start focusing on. Number one is bring in more people, start to build out a world class team to come join the Cloud Paper team. And we’re actually actively hiring across a number of roles right now. And then what we want to do is we want to start rolling out new products as quickly as possible.
At the end of the day, we want to go to be able to go to a business customer or a household and really provide a suite of tree-free products. I want to make it as easy as possible for our customers to say, sign me up to go tree-free, and we want to hit every paper product they’re using, whether it’s paper towels, toilet paper, Kleenex, et cetera. And so we’re going to be moving pretty quickly in that direction with these new resources to roll out additional products.
RICK NEWMAN: Hey Ryan, Rick Newman here. I have to ask an uncomfortable question. How do you persuade people to wipe with bamboo?
RYAN FRITSCH: You know, it’s not too uncomfortable. You would be surprised how much I talk about this with customers and investors and whatnot. So what we try to do is always kind of lean in with the environmental message. First and foremost, we want people to understand that making the switch to bamboo is voting to protect our trees and to protect our forests and to move into a world of new sustainable fibers in this product category.
RICK NEWMAN: What about the comfort though? I’m euphemising. What about the comfort?
RYAN FRITSCH: Well, what we tell people is, hey, order a box. If you hate it, we’ll send you your money back. And then what we actually do is we work with a non-profit organization here in our area in Seattle called Food Lifeline. We donate– today we donated tens of thousands of rolls to their food banks and shelters they support.
And so we partner with them. So if anyone says, I don’t like, it’s not up to par, we say, no problem, we’ll refund you. And then we organize a delivery into a food bank of the unused products.
– All right, Ryan Fritzch, co-founder of Cloud Paper. We wish you all the best. Thanks so much for taking the time to join us.
RYAN FRITSCH: Thanks for having me.