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MacroCycle: From ExxonMobil Engineer to $7.6M Plastic Upcycling Pioneer
Most founders pivot once. Stwart Peña Feliz has pivoted twice – and his second pivot might just revolutionize how the world handles plastic waste.
In a recent episode of Category Visionaries, Stwart, Co-founder and CEO of MacroCycle, shared how his company raised $7.6 million to commercialize breakthrough upcycling technology that processes contaminated plastic waste traditional recycling can’t touch. But getting there required abandoning not one, but two fundamental assumptions about how to bring deep tech to market.
The ExxonMobil Reality Check
Stwart’s entrepreneurial journey began in an unlikely place: as an engineer at ExxonMobil, where he was put in overseeing their first recycling facility. “Any advertisement that you seen on their behalf, that was the technology I was working for and that opened my eyes to the reality of recycling,” Stwart explains.
That experience became the catalyst for everything that followed. Working inside one of the world’s largest energy companies, Stwart saw firsthand the limitations of traditional recycling approaches – insights that would later inform MacroCycle’s differentiated technology strategy.
The path from corporate engineer to startup founder led through MIT, where Stwart met his co-founder Dr. Jan-Georg, a scientist with what seemed like impossible plastic recycling technology. “I truly thought it was too good to be true,” Stwart recalls. “So I decided to work with him to show him how things work in the real world. Only for me to realize his technology was not only true, but really good.”
The Technology That Changes Everything
MacroCycle’s breakthrough lies in how they approach damaged plastic materials. Stwart uses a simple analogy to explain their process: “The best way you can think about plastic, whether it’s a water bottle or textile T shirt, is as a cake.”
Traditional recycling, he explains, breaks everything down to basic components – like taking a cake apart into frosting bags and ingredients, then rebaking from scratch. “As you can imagine, that is a lot of work.”
MacroCycle’s approach is fundamentally different: “What microcycle does is that we essentially take two half eaten cakes and we have a technology that is basically able to put it together, those two half cakes, to make one whole beautiful cake.”
This process allows them to handle contaminated and colored plastic waste that traditional methods can’t process, while being “significantly more energy efficient to be able to reach the high quality product that’s desired by the industry.”
Pivot One: From Licensing Dreams to Manufacturing Reality
MacroCycle’s original business model focused on licensing their technology to existing companies. It seemed logical – avoid the capital intensity of manufacturing while scaling through partners.
But customer feedback revealed a harsh reality. “We received the feedback that they wouldn’t license or purchase our technology until we have demonstrated our technology at scale,” Stwart explains.
Even worse, investors were pushing them toward the licensing model because “no one wants to invest in capital intensive technology.” This created a classic chicken-and-egg problem: customers wanted proof of scale, but investors didn’t want to fund the capital required to achieve that scale.
Stwart’s solution was elegant: “We decided to take a approach where we own and operate the assets. But in order to reach that stage, we’re actually still taking a capital light approach as we simply are going to be renting petrochemical equipment and units and facilities from other locations.”
This hybrid approach let them prove their technology through direct manufacturing while avoiding the massive capital requirements of building their own facilities.
The Cost Parity Revelation
Perhaps MacroCycle’s most important market insight came from conversations with environmentally conscious brands. Despite public commitments to sustainability, Stwart discovered a hard line in customer decision-making.
“As much as many brands want to communicate that they care about sustainability, that they want to implement recycled solution, it will not come at the exchange of cost if you are to charge them more, unless they’re getting penalized for some reason, whether it’s regulation or something else, they will not be implementing recycle solutions.”
This revelation was “shocking” to Stwart, given the public pressure on brands to adopt sustainable practices. “That public pressure doesn’t translate to anything at the moment because their bottom line is not being hurt.”
The insight forced MacroCycle to engineer their process for cost parity rather than premium pricing – a constraint that ultimately became a competitive advantage in commodity markets.
Pivot Two: From Sustainability to Compliance
The cost parity insight led to MacroCycle’s second major pivot: repositioning from sustainability benefits to regulatory compliance.
“There’s going to be Regulations in a lot of parts of the world, specifically Europe and some states here in the US that will mandate a minimum recycle content where if companies are not on top of it, they’re going to have to pay a fee for not meeting such specs in the market,” Stwart explains.
Even more compelling: the supply crunch is coming. Based on current regulations, “there’s going to be so many hundreds of thousands of tons of recycled plastic that’s required and we don’t have the capacity today. And it’s going to take minimum of 10 years for us to scale up enough plants to be able to meet that recycle supply.”
This positioning shift transformed MacroCycle from a nice-to-have sustainability solution into essential compliance infrastructure for an inevitable regulatory environment.
The Blue Jacket Marketing Revolution
MacroCycle’s most unexpected marketing success came from a simple wardrobe choice. When working on company branding, Stwart told his contractor: “I love green, but green is overused in recycling, so we need to use something else.”
The resulting vibrant blue became more than just a company color – it became Stwart’s signature. “I need to get a jacket of that color. So when I go on stage I stand out.”
The strategy worked beyond expectations. “It’s gotten to the point that we are recognized across continents based on our color jacket. Where people literally approach us is like, hey, I recognize you. Or they say, hey, I met your co founder at this other conference.”
The branding became so distinctive that “when other people are wearing a light or bright blue jacket, they’re being asked if they work for Microcycle.” Their lawyers have even suggested trademarking the color for recycling applications.
Stwart’s reasoning reveals deep strategic thinking about commodity markets: “Since I am in a commodity space, I need to truly differentiate my brand if I want to have a successful and big exit opportunity. I need to essentially be the apple of recycling.”
The Underpricing Fundraising Strategy
MacroCycle’s fundraising approach challenged conventional wisdom about startup valuations. Instead of maximizing their ask, Stwart deliberately underpriced to create momentum.
Using a real estate analogy, he explains: “If you have a house that’s worth half a million dollars and you put it in the market for $1 million, no one’s going to bid on it, even if you’re expecting them to underbid a 700 or $600,000 because it’s overvalued. But if you put it on the market for $400,000, you’re likely to get multiple bids which you can use to negotiate to be able to bring your valuation above the half a million dollar original ask.”
The strategy worked, creating competitive dynamics that ultimately drove higher valuations while accelerating their fundraising timeline. Stwart acknowledges the psychological difficulty: “It is difficult. And if you only get one term sheet then that’s pretty probably a good indicator that’s your true value, which is unfortunate. But the only thing worse than being undervalued is receiving no value at all.”
Building for the Long Game
MacroCycle’s ultimate vision extends far beyond their current operations. “Microcycle’s mission is to become the largest producer of pet and polyester plastics through our upcycling technology,” Stwart explains.
Their five-year plan involves constructing their first owned facility to achieve operational independence, then transitioning to technology licensing: “Once we’re independent, we are then going to start licensing our technology and start transitioning from selling pellets to selling plants as we’re then able to increase the rate of penetration of our technology at a global scale.”
The scale of opportunity is massive, but Stwart maintains perspective about the timeline: “That will only be the beginning because that’s not even 1% of the total plastic production. So we still have a long way to go, but we got to believe that we can get there.”
MacroCycle’s journey illustrates how deep-tech startups can navigate the tension between technological innovation and market realities. By remaining flexible on business model while staying focused on core technology advantages, they’ve positioned themselves to capitalize on both regulatory tailwinds and supply shortages in the growing recycled materials market.
For B2B founders in capital-intensive industries, MacroCycle’s story offers a blueprint: be willing to pivot not just once, but as many times as market feedback demands. Sometimes the biggest breakthroughs come from abandoning your most cherished assumptions about how business should work.
Actionable
Takeaways
Pivot your business model based on customer feedback:
Stwart initially planned to license MacroCycle's technology but discovered customers wouldn't adopt unproven technology at scale. Rather than forcing the original model, they shifted to manufacturing products directly, using a capital-light approach by renting existing petrochemical facilities. This pivot allowed them to prove their technology while generating revenue. B2B founders should remain flexible about their go-to-market approach and let customer readiness dictate strategy rather than forcing an idealized model.
Position around regulatory compliance, not just benefits:
While sustainability messaging resonates, Stwart found that regulatory pressure creates the strongest buying motivation. Upcoming EU and US state regulations will mandate minimum recycled content, creating penalties for non-compliance. Companies partnering early with MacroCycle gain supply chain advantages in a market facing a projected decade-long shortage of recycled materials. B2B founders should identify regulatory tailwinds in their industry and position their solution as compliance infrastructure rather than nice-to-have benefits.
Achieve cost parity to eliminate buyer friction:
Stwart learned that even environmentally conscious brands won't pay premium prices for sustainable solutions unless legally required. This insight drove MacroCycle's focus on reaching cost parity with traditional materials through their more efficient upcycling process. In commodity markets especially, B2B founders must match incumbent pricing to achieve adoption, using operational advantages rather than premium positioning to win market share.
Underprice to accelerate fundraising momentum:
Stwart used a counterintuitive fundraising strategy, deliberately undervaluing MacroCycle to generate multiple competing term sheets. Like pricing a $500K house at $400K to create bidding wars, this approach accelerated their fundraising timeline and ultimately achieved higher valuations through competition. B2B founders confident in their traction should consider strategic underpricing to create investor FOMO and compress fundraising cycles.
Build distinctive founder brand in commodity spaces:
Operating in recycling - a crowded commodity market - Stwart recognized the need for radical differentiation. He adopted a signature bright blue jacket for all conferences and presentations, creating instant recognition across continents. This visual branding became so effective that their lawyers suggested trademarking the color for recycling applications. B2B founders in commodity industries should invest heavily in memorable branding to stand out from undifferentiated competitors.
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