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Terratico is a company with an ecological and sustainable overlap that produces an alternative to terrazzo and precast concrete, using any type of plastic in up to 45% of the final concrete mix. The company and its products have the potential to transform the building material and outdoor furnishing market. Production based on a patented process allows the use of waste plastic in concrete so that the plastic pieces do not drag on the surface of the mix and are evenly distributed throughout the volume of the product. This process gives the material unique technical properties such as higher strength, resistance to cracking and up to 30% less weight, and requires less additional reinforcement (none for smaller products). Terratico's products were already launched in 2021, when the company tested the so-called proof of concept, with demand exceeding the capacity of small-scale production.

Terratico - video z výroby odľahčeného betónu s prímesou plastov

local production ensured by proprietary patented technology;

unique material properties compared to traditional concrete and terrazzo;

no competition in the use of plastics in the final mix;

versatile team with experience in construction and finance;

sustainability embedded in the business model;

growing market for precast concrete and terrazzo (5.2% CAGR 2023-2030);

expansion strategy focused on Western European, US and Asian markets.

Why invest?

An environmentally friendly product with unique technical characteristics and worldwide market potential.

Effective pre-investment valuation of the company €10.25 million.

Expected return of 4x the investment and more.

Increase in projected revenue from product sales from €5.4 million in 2024 to €20.6 million in 2028 (CAGR 40%).

Increase in projected EBITDA from €1.9 million in 2024 to €9.9 million in 2028 (CAGR 33%).

Stable gross margin at around 70% and EBITDA margin at 48%.

Protective mechanisms such as a 1.5x liquidity preference with an inflation clause secured by intellectual rights and a 2x dividend (on top of the pro-rata trading stake).

The right of redemption of investors by the founders (3x the total investment until 30.06.2026 and 4x the total investment until 30.06.2027). 

Co-investor is the VC fund Venture to Future Fund, to which the investment via Crowdberry investors will be added. The total investment is €3 million with the co-investment of the fund.

Investment opportunity

Terratico was founded on the basis of the more than 25 years of experience and activity in the field of building materials of Otto Nagy Sr. and Otto Nagy Jr. and their efforts to solve the general problem of the surplus of waste plastics. The first idea to use plastic recyclates in concrete as a substitute for crushed marble in terrazzo was conceived in 2019. After two years of testing, the first version of the product was developed, which the company has since been continuously refining.

The inventors successively registered a utility model and filed a patent application for all three parts of their production process. The company's first commercial success came in 2021, when they produced 100 benches that incorporated shredded credit cards for a Slovak bank. In the same year, the company managed to get their product into the Slovak pavilion at the world exhibition "Expo Dubai 2020", where they gained many international contacts and registered a great deal of interest in their innovative material from all over the world.

In 2023, Terratico participated in the "World of Concrete" and "The International Surface Event" in Las Vegas, Nevada. The interest of potential buyers from North America and other parts of the world at these events exceeded the founders' expectations. The company received specific offers for cooperation as well as product orders, which they were unable to fulfil at the time due to capacity constraints.

Therefore, at the beginning of 2024, the company started to seek capital mainly for the launch of a large-scale production plant for the production of large-format panels, tiles and facades, which would enable it to respond more flexibly to the rising demand for its products.

About the company

Terratico plans to use the main part of the investment of €2.1 million to finance the pre-ordered machinery and equipment for the establishment of a large-scale production plant in order to increase production capacity.

The remainder of the investment in the company will be used to cover costs associated with patent protection, international development and working capital financing.

Investment intention

The innovative Terratico material combines style with sustainability, providing an eco-friendly alternative to terrazzo and precast concrete. The product itself uses crushed plastic (up to 45% of the final mix) as a substitute for marble rubble or aggregate in terrazzo. Thanks to the patented technology of uniform distribution of plastic particles, the product acquires unique properties such as:

the superior lightness of the products (up to 30% less) compared to concrete and terrazzo is achieved by the use of plastic in the final mix;

lower brittleness, so it does not crack as much as concrete or terrazzo;

requires less additional reinforcement for larger products and none for smaller ones.

Product

The product is also certified for safe contact with food and drinking water, so it can be used in gastro-operations. It is also an alternative for all types of tiles, cladding, facades, planters, and other outdoor or indoor furniture. In the field of concrete, it is an alternative for pavements, car parks, kerbs, rills, canals, concrete barriers, noise barriers, etc.

The Terratico solution is unique in that the individual pieces of plastic become an integral part of the mass and are evenly distributed within it as if they were the same weight as concrete. The specific production characteristic is achieved in two ways:

1. Special additives, the composition of which is included in the patent. These additives ensure that each piece of plastic is bonded to the concrete and cannot be simply pulled out once it has dried.

2. By special mixing method, which is also included in the patent. This method of mixing ensures that the plastic is evenly distributed throughout the mixture and does not float to the surface.

The manufacturing process varies slightly for each product type.

Utility models and patents are divided into three entries:

1.      method of preparation of cement-plastic mixture;

2.      dry cement-plastic screed mixture;

Since the time of registration, all of the above processes have undergone gradual improvements – the principle of the patent has not changed, but the gradual improvements increase the quality of the final product while saving time and raw material costs. 

Technology

The Terratico Group consists of the parent company Terratico j.s.a. (parent) and the subsidiary Terratico Production j.s.a. (subsidiary), to which the parent company licenses the production and owns 85%. 

The subsidiary represents the wholesale production under a production licence (within the EU region) and resells all its production to the parent company with a gross margin of 65%. 

The parent company buys the products from its subsidiary and resells them with a gross margin of 31% through five main sales channels:

·       architects who use cladding boards or atypical production in their designs;

·       firms laying industrial floors;

·       towns and municipalities (furnishings that fulfil the ecological aspect and make it easier to obtain subsidies for public space).

The company further plans to support sales and volume growth through a diversified growth strategy that includes the following steps:

·       Expanding sales activities into new territories. This process involves setting up its own sales offices and agents throughout Europe. The plan is to first cover the whole of Slovakia, then Hungary and the Czech Republic, and gradually other regions of Europe (Germany, France, Spain and northern Europe).

·       Diversifying its product portfolio. This includes the introduction of new products such as poured flooring and the expansion of the furnishing and prefabricated series.

·       With the increase in demand for its products, Terratico plans to increase its production capacity and introduce additional shifts in order to be able to respond more efficiently to market demands and minimise losses due to supply-side shortages.

·       License production of its products to locations where logistics costs would be disadvantageous. This model allows to cover more distant markets through local producers without a significant investment burden.

·       Sale of production licenses for companies wishing to use its technology and production processes in their own production programme.

·       Through custom manufacturing for third parties. This approach will allow the use of spare machine capacity for traditional manufacturing projects.

Terratico has identified the US as a key market for expansion based on the "World of Concrete" and "The International Surface Event" exhibitions held in Las Vega, Nevada in 2023. 

The company has identified three ways to enter the US market:

·       approaching existing terrazzo/concrete companies with an offer to use Terratico's production recipe for their existing market;

·       forming a joint venture (JV) with a strategic partner already present in the US market and together develop a green alternative for local customers;

·       US government programmes for sustainable activities. In the NextCycle programme, which runs in more than 10 states, Terratico can apply for grants of $1-1.5 million each year.

In addition to identifying entry strategies, Terratico has already taken the first steps towards entering the US market and conducted a working trip to the US. The aim of the trip was to:

1.      Verify the competencies of the production staff of the company that Terratico plans to take over in order to manufacture its products locally.

2.      Verify the availability of raw materials for production in the US. 

The company has found that the local work team is skilled and the raw materials are fully exploitable and readily available. During the visit, Terratico was able to prepare product samples that successfully passed the product testing required to start the certification process, as well as to conclude business agreements with local partners. 

Business model and strategy

The authors of the patent, Otto Nagy Sr. and Otto Nagy Jr., have 25 years of business experience in the construction and distribution of Italian terrazzo. In the company, they are mainly responsible for the management of research and development, raw material supply and plastics sourcing.

The company is led by Michal Šula (CEO), a lawyer, attorney and investor. He is a top executive with experience in financial institutions specializing in distribution development and opening new markets. He has been involved in the management of international companies and large enterprises providing services in the technical field. At Terratico, he is mainly responsible for legal affairs, investor relations management and geographical expansion of the company.

Pavol Norulák is a top executive with experience in senior management positions in financial institutions with an international focus. He is mainly responsible for global sales and marketing, geographical expansion of the company and strategic alliances. 
Marek Václavík is an investor and entrepreneur in real estate development, financial institutions and media. At Terratico, he focuses on building investor relations, geographic expansion and media strategy.  
Ján Lazar has experience in management positions in state and local government, and as a financial and executive director in several companies. In the subsidiary (Production) he holds the position of Managing Director, responsible for production, partner management, purchasing and control.

Current trends in the construction industry have a direct impact on the development of the concrete products market. The rise in environmental awareness and the emphasis on the project life cycle are fuelling the need for sustainable construction practices. Terratico, with its unique integration of plastic waste with concrete, appropriate material properties and stylish design, holds a significant competitive advantage. 

The company is primarily targeting two market segments – precast concrete and terrazzo, whose combined market value was estimated at €150 billion in 2022. The market for precast concrete, concrete floors and terrazzo is estimated to grow at a CAGR of +5% per annum (2023-2030) to reach €267 billion in 2030. 

There is currently no direct competitor that can integrate concrete with plastic mix above the 15% level to maintain material quality comparable to concrete or terrazzo as with Terratico. The current competition is therefore represented by companies producing conventional precast concrete, slabs or furnishings, and companies that focus mainly on the use of plastic waste as an alternative material (building bricks, paving stones).

Market and competition

Financial and business model risk (high): The company's financial and business model is closely linked to the wholesale business, which accounts for up to 80% of revenues. The model is detailed with conservative variables such as low conversion of sales contact to customer (3-9%) and average order value (10-20k). With conservatively set variables, mass production revenues have room to grow. On the other hand, gross margins, with an average level above 70%, allows flexibility in adjusting the selling prices of products in order to increase their competitiveness. However, misestimation of margins and operating expenses when business volume increases significantly can reduce EBITDA as well as the overall financial performance of the company. 

Market risk (Medium): Market risk in the Building Materials segment is linked to the macroeconomic situation and the innovation potential of competitors. The former risk includes market fluctuations, economic performance and geopolitical or natural events. The second risk affects the execution of the business plan, in particular the arrival of innovative products from competitors, which may reduce Terratico's ability to penetrate the market. The company has no direct control over these risks, but can protect itself through patent protection, product portfolio expansion and a continuous R&D process.

Risk of scalability and internationalisation (medium): The production of Terratico products is patented and flexibly adaptable to local conditions. The strategic business model involves scaling up production through licensing and expansion into foreign markets, which entails political, legal and economic risks. Therefore, Terratico prepares for expansion using a detailed analysis of target markets and legal conditions, especially in the US. The company has clearly defined its licensing strategy and is building an international development team. It is always going to add local IP protection and licensing experts to its legal partner Brichta & Partners. These steps are designed to ensure scalability and minimize legal risks as it expands.

Intellectual property risk (low): The authors of the patent on an alternative material to terrazzo and concrete are responsible for the research, product development, manufacturing, raw material supply and sourcing of plastics for Terratico. In the event of their departure or an adverse situation, there is a risk the company will not be able to replicate the intellectual property in commercial production. The founders will undertake to add a contractual commitment to the protection and replicability of the IP and ensure that at least one of the originators of the IP is active in the company for three years after the investment. The company's IP rights will remain protected even when the authors leave. The legal protection of IP and the patent agenda is managed by Brichta & Partners.

A detailed risk analysis can be found in the investment documentation

Risks

The investment opportunity closes no later than 31 May 2025.

Terratico

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Peter Zildner

Terratico – patented technology and innovative material that combines design with sustainability.

Crowdberry investors have already invested over €65 million in over 40 companies.

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Terratico

Terratico

Why invest?

Investment opportunity

About the company

Investment intention

Product

Technology

Business model and strategy

Market and competition

Risks

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