RAIKU, an Estonian startup that developed an innovative packaging filler made from wooden springs and woven wood fabrics, has attracted significant attention from global luxury brands. The company’s production is already sold out through the end of 2025. To meet increasing demand, the company is building a new factory in the epicentre of luxury – France.

RAIKU co-founder and CEO Karl Pärtel stated that selecting France for their new factory resulted from 2–3 years of effort and market feedback. France is a crucial global centre for luxury brands, making it a strategically important location for the company.

“Communication is also taking place outside Europe, but at the moment we have essentially sold out production by the end of the year.”
Karl Pärtel, CEO and co-founder of RAIKU

Since the company’s ambitions are global, Pärtel is thrilled by France’s reception. “RAIKU has won awards at Paris events, established hundreds of business and governmental contacts, and received encouraging support for factory setup, grants, raw materials, and client connections,” said Pärtel. This will significantly ease their expansion.

New factory to start production in 2026

Today, RAIKU produces its products in Tallinn. The French factory’s location selection and preliminary work are in progress and will continue this year. According to Pärtel, the goal is to begin production there next year or, at the latest, the year after.

“Our production technology is very unique. We don’t need to build a large factory and production line, because we have relatively small and modular production units. Essentially, they can be set up in any space, even in Paris if necessary, which makes our expansion flexible and cost-effective,” said Pärtel.

Opening a new production facility in France gives the company a significant logistical advantage. “It allows us to serve the French and other European markets faster, while reducing the transport footprint and cost,” explained Pärtel. “Visibility also plays an important role, because the French need to have a ‘Made in France’ status.” The new factory also means adding locals to the team, who work in the market daily and are close to partners, because personal relationships and direct contact are important to the French.

Production volume tries to catch up with high demand

RAIKU packaging materials have reached more than 15 European countries. In addition to Estonia, the company’s main markets are other Baltic countries, Germany, Italy, and France. Significant interest has also been shown in the Nordic countries, where there is a strong natural cosmetics sector and sustainability is valued.

“In addition, communication is also taking place outside Europe, but at the moment we have essentially sold out production by the end of the year,” confirmed Pärtel, which is why the focus is on the main markets, because the production volume must quickly catch up before entering new markets. The company plans to raise additional capital at the end of the year or the beginning of the new year to serve the markets and expand its activities.

“An important goal is to start the cooperation with LVMH brands, which total over 75 companies.” 
Karl Pärtel, CEO and co-founder of RAIKU

“We do not see any direct restrictions on markets in the future, as packaging is needed in every sector and every country,” explained Pärtel. The goal is to grow into an international company and also expand to other regions of the world. The packaging sector and its problems are global, Pärtel emphasised.

Accelerator opened the door to the world of luxury brands

RAIKU‘s wooden springs have attracted interest from world-renowned cosmetics and fashion companies as well as ceramic and wine producers. At the recent Vivatech fair in France, where RAIKU participated together with other Estonian companies led by Enterprise Estonia and received the “Tech for Change” recognition, representatives of international brands such as Hermes, Moët Hennessy, L’Oreal and Balenciaga showed interest in the company’s activities. “The interest was great and delegations of big brands chose our stand as one of their favourite places to stop,” Pärtel mentioned.

The company has been in contact with luxury brands for a long time. Namely, they are ending their participation in the LVMH (Louis Vuitton Moët Hennessy) business accelerator. Cooperation with the world’s largest luxury group has increased trust in the brand, brought visibility, and thus opened the doors of world-famous companies with whom it would otherwise take years to get in contact.

“An important goal is to start the cooperation with LVMH brands, which total over 75 companies. One should not expect quick business deals, as these are huge companies and discussions, testing and starting cooperation can easily take over a year or more. The process is underway with several brands, and the first cooperation should occur in the fall. We cannot reveal names yet – we are keeping the excitement going,” said Pärtel.

The accelerator has given the company very good knowledge of what the world’s most famous luxury brands are looking for, how they work, choose new solutions and assess quality. “We understand that the primary criterion is a unique and luxurious design, distinguishing us from the packaging solutions market. At the same time, sustainability is also becoming increasingly important, especially considering the European Union’s stricter packaging pollution reduction standards and pressure from end consumers,” shared Pärtel.

GOOD TO KNOW

• RAIKU has developed an innovative packaging filling material: wooden springs, fabrics and mats. It is a seemingly simple product, but the complexity lies in its industrial production. The company has a wide patent portfolio, from products to devices.
• What makes the product so appealing is its incredibly high resource efficiency – the raw material can be given 15-20 times more volume, no chemicals are needed, and very little water and energy are used to produce it. The material is fully compostable and offers an alternative to traditional plastic, paper, cardboard and other disposable materials.
• RAIKU is one of 30 companies selected from over 1,500 candidates to participate in the Louis Vuitton Business Accelerator Program 2024-2025. The LVMH group, founded in 1987, now includes over 75 brands, each of which is known for its high-quality and luxurious products, including, for example, Louis Vuitton, Christian Dior and Moët & Chandon. LVMH is the world’s most valuable luxury brand, with an annual turnover of 85 billion euros.
• At the Milan Packaging Fair, Raiku was among the top 10 most visited stands among the 300+ companies participating in the fair – this brought the company over 500 potential customers. In addition, the company won the Avant-Garde Grand Prize in the Innovative Materials category. “Trade fairs can be very good platforms for finding international customers if your product is interesting,” said Karl Pärtel.
• In 2023, Raiku received a grant of 5.6 million euros and an equity investment from the European Innovation Council (EIC).

PROBLEM
The current state of the packaging business:

• The packaging sector is worth 1.5 trillion euros. Currently, only about 30% of Europeans sort their waste. The company’s approach is that if people cannot cope with packaging management, we must create solutions that nature can cope with independently.
• 100 per cent compostable material is necessary to solve a significant problem in the packaging sector – every year in Europe alone, tens of millions of tons of packaging waste are generated that are not recycled.
• The European Union has very low goals for solving this problem. For example, by 2030, the goal is to recycle 70 per cent, or less than three-quarters, of packaging materials (currently, this figure is 63 per cent). This means that packaging pollution will be accepted in the coming decades.
• In RAIKU’s opinion, the problem is both low recycling and composite materials, which use dozens of chemicals, including single-use plastics, as well as paper and cardboard. Paper production is a resource-intensive process, but it is the primary packaging material, accounting for about 50% of the market. To create wooden springs, the raw material is expanded 15-20 times in volume without chemicals and uses very little water and energy.
• Over 80% of consumers want to see environmentally friendly packaging materials, so companies are looking for new materials.

Source: RAIKU

This content is funded by the European Union – NextGenerationEU.

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