Brazilian textile giant Vicunha, one of the world’s largest denim fabric suppliers, has signed a memorandum of understanding to invest 2.4 million shekels ($700,000) in Israel’s Sonovia in exchange for a 20% stake in the company, which has developed a cleaner technology for dyeing jeans using sound waves.
The deal values Sonovia at 12 million shekels ($3.5 million) after the investment.
A cleaner technology for dyeing jeans using sound waves
(Photo: Shutterstock)
Sonovia’s technology uses sound waves to embed blue indigo dye into denim fabric, eliminating much of the traditional dyeing process, which relies heavily on polluting chemicals. The partnership is intended to advance production of the next generation of jeans using the technology and complete development ahead of commercialization, with Vicunha funding the required development stages.
Vicunha supplies denim fabrics used by major fashion brands including Zara, Diesel, Calvin Klein and American Eagle, and is considered one of the three largest textile and denim manufacturers in the world. The company has advanced production and logistics operations across South America and employs 7,000 people.
The Brazilian company controls about 8% of the denim fabric market, which is estimated at $20 billion to $30 billion a year. The indigo dye market serving the jeans industry is estimated at about $1.5 billion.
Vicunha is part of a conglomerate that also includes a steel company owned by the Jewish-Brazilian Steinbruch family. Its textile business is led by Ricardo Steinbruch, who is also known as a prominent art collector.
Sonovia went public on the Tel Aviv Stock Exchange in 2020 at a valuation of 130 million shekels ($38 million). During the COVID pandemic, the company shifted to producing masks containing an active protective material, but that activity ended after the pandemic subsided and its share price declined accordingly.
Sonovia is currently valued at about 11 million shekels ($3.2 million). After the company reported the Vicunha deal, its stock jumped 15% on the Tel Aviv Stock Exchange.
Shuki Hershkovitz, Sonovia’s chairman and founder, said the investment marked “a turning point in the transition from development to commercialization” and represented a vote of confidence from a leading global player in the denim industry.
“We expect this move to place the company at the forefront of innovation in sustainable jeans manufacturing and attract interest from additional major players,” he said.