It’s no secret that sustainability is a priority for investors when it comes to deploying capital. Contrary to the old beliefs that sustainable companies weren’t profitable, they are showing good investment returns. The Financial Times Advisor found that European ESG funds outperform by 12% annually, while high momentum stocks outperform by 2.8%.
In 2006 the UN initiated the Principles for Responsible Investment (PRI) which saw 63 investment companies sign a commitment to include ESG issues into their investment decisions. By 2018, that number had grown to 1,715 investment companies. Leading players in this field include the likes of BlackRock whose sustainable assets reached $500 billion, demonstrating the demand and attraction to these investment opportunities.
In the UK, startups in this space are seeing record-breaking investment figures, reaching £2.3 billion raised in 2021, up £1.71 billion from 2020; many of whom have raised capital through Seedrs. Our earth-friendly alumni includes the likes of Oddbox, a company who rescues odd and surplus produce in order to reduce food waste and foster conscious consumerism. In total, Oddbox has raised over £7.1 million on Seedrs, with some investors seeing 3000%+ return on investment.
In a Deloitte study, 1 in 3 consumers have stopped shopping from brands with sustainability related concerns. This has encouraged companies to seek a B corp status, a clear recognised symbol of their pledge to run their businesses in an earth-friendly way. A B Corp certification verifies that a business is meeting high ethical standards, is taking accountability and is transparent on all factors from their employee benefits to supply chain practices. There was a 16% increase in B corp applications in 2021 and early adopters include the likes of Patagonia, Ben & Jerry’s and Natura.
Across Europe, investors pledged a historic $8bn to sustainable European startups in 2021. Eric Archambeau and George Coelho were early Spotify investors and later launched an agritech-focused VC fund, Balderton, in 2017, ahead of its time as the market is predicted to be worth $20.8bn by 2026. Balderton has been backed by Brussels-based Astanor Ventures, who support Seed-Series C startups.
Closer to home, ETF Partners – who recently raised £167 million for their fund – is funding companies working across energy, future mobility and sustainable food. Notable portfolio companies include Zeelo, a London-based electric bus-sharing company, and Urbantz, a last-mile sustainable delivery management platform.
The future is looking bright for both companies and investors in the sustainability industry! So in this month’s report, we’ll be highlighting startups to watch among fast-growing sectors in this field.
Back to the topic of food 🍳
Have you heard about THIS? Unless you’ve been living under a rock, THIS is the number one destination for plant-based meat replacements. Andy and Pete, friends who turned co-founders, are both former meat lovers who used to run a burger chain. However, after realising the complex issues that come with meat production, they wanted to make a sustainable (and tasty) alternative.
It’s clear that customers and retailers are loving their vegan-friendly food too. THIS has secured over 10,000 retail distribution points in most major UK retailers. Their first full year of trading saw £5.5m which has quickly grown to £17.5m of annualised revenue. Not to mention their strong marketing expertise which has captured 21% of British consumers.
No stranger to fundraising, the fast growing startup has raised around £23 million to date. A significant £4,476,520 came from 1,844 Seedrs’ investors in 2020, with another round going live soon. Our investors know this is a tasty opportunity seeing that THIS grew faster than any other plant-based meat brand in 2021, with 333% YoY growth. You can learn more about their latest round here.
When you think about sustainability, do you think about the food you consume? Or better yet, waste? The UK produces the highest amount of food waste in Europe – 9.5 million tonnes a year to be exact. Yet 8.4 million people in the UK are experiencing food poverty.
The food waste crisis is magnified now because of its moral and environmental complexities. According to the Food Aid Foundation, 821 million people go to bed hungry every single day. This is heartbreaking to hear when we know that 61% of food waste comes from households – a large proportion of which can feed many.
Environmentally, the increase in food waste only speeds up the harmful gases emitted into the atmosphere. Due to a growing population, food production is rising, but if the food is not used, natural limited resources such as land, fossil fuels and human resources are also wasted.
OLIO is a London-based women-led startup founded by Tessa Clarke and Saasha Celestial-One. The food sharing app, with a user base of over 5 million, helps people give away unwanted food and household items to locals for free. Tessa came up with the idea after her own challenges of struggling to do anything with the unwanted food in her fridge when moving home. Since the app launched, it has enabled 25 million portions of food and non-food items to be saved from the bin, and from landfill. In 2021, OLIO raised a significant $43 million in Series B funding to take their efforts even further and create change for good.
Similarly, on Seedrs, Kitche is a home food waste prevention app but they’re taking it one step further. They’re helping people save money too. Their unique app has a range of features from receipt scanning for importing food purchases, to food waste tracking, as well as tips and hacks. They then support their partners, such as London councils, by sharing this data to help inform government policy and business approaches.
Keeping the environment at front of mind, Kitche is a free app, lowering the barrier to user acquisition. Their aim is to grow as fast as possible which makes it easier when the app is free. How they monetise, however, is through their B2B2C business model with local authorities and supermarkets. The information shared is licensed via a rolling contract with a minimum initial term. They’ve already seen great feedback from being awarded and delivering a competitive nationwide government project. The app has had over 35,000 downloads, featuring on App of the Day multiple times.
Kitche are just about to cross the finish line on their Seedrs funding round and they’re inviting investors to be a part of the solution to food waste. To learn more about them, visit their campaign here.
🚅 What’s next for transportation?
Did you know that transportation (road, rail, air and marine) makes up for 20.1% of carbon emissions globally? It’s the second largest contributor to greenhouse gas emissions, behind power, and it’s increasing rapidly. As the global population grows, millions of capital is pumped into more transportation services which only adds to the climate crisis. However, investing in low-carbon transport could be a smart investment. The World Bank predicts it could yield economic returns of over $33 trillion by 2050, as well as saving our planet.
A company committed to the cause is Tripshift. Tripshift is an automated tracker inspiring people and companies to ‘Move Better’. It helps the ordinary person reduce their carbon footprint and save money on travel costs. As well as enabling businesses to comply with ESG legislation by tracking and managing transport emissions across the organisation with full reporting functionality.
Most of Tripshifts’ founding team came from the aviation industry and recognised that access to carbon data was limited and expensive to obtain. With sourcing factual data being a barrier, their entrepreneurial minds shifted to “how can we make it simple, accessible and help businesses and consumers in an affordable format?” (read interview here).
Finding a way to decarbonise the world is something most shun upon the biggest corporations in the world. Records have shown that just 100 companies are responsible for 70% of greenhouse emissions since 1988. That still leaves 30% made up of other businesses and every day people. Tripshift shifts the responsibility of the future of the world onto everybody with their app, showing that the small things add up, but also simplifying the sustainability concept for other businesses.
Currently open for pre-registration, you can register your interest in Tripshift here.
An alternative method is shared transportation. It’s quite simple: if you share your car, there’s less cars on the road, therefore less car pollution. Not to mention a decreased demand on oil and fuel, massive air pollution contributors. The only issue is that up until now, it’s been difficult to get flexible car insurance. It was only a few years ago that insuring a car for a few hours was a wild idea. But thanks to Cuvva, we now have that option. And it’s super easy too.
Cuvva broke into the market and to say it disrupted the car insurtech industry would be an understatement. A fan favourite across Gen Z and millennials, they’ve sold over 5 million policies and insured over 1 million vehicles. Customers love them too, giving them an ‘excellent’ rating on NPS and a 4.5 Trustpilot score.
What really makes them attractive to drivers is their simple flexible car insurance options. Drivers can choose from hourly to annual policies and save up to a third with Smart Pricing. Cuvva has raised a total of £17m, which is soon to rise as they just launched their new fundraising campaign on Seedrs. With a goal of £2.5m, they’ve quickly exceeded their target bringing 1,140 investors on board for the ride, and that’s before it’s fully opening their round up to the public.
Want to learn more about Cuvva? Check out their campaign here.
Ed Tech 👩💻
In a world that’s rapidly evolving, we can’t make enough advancements without the use of technology. If anything, technology is on our side, and the magnitude of green-tech companies out there are many. Especially those educating and connecting people through conversations surrounding sustainability.
The Climate App is moving away from awareness, and empowering people to take action. They believe that international governments have failed us, leaving us with a limited amount of time to make things right. In fact, you may remember the climate clock located in the heart of Manhattan which flashes out how much time we have till damage can no longer be reversed (we’re currently at just over 7 years).
With many people feeling helpless or isolated when making lifestyle decisions to reduce carbon, The Climate App is challenging these emotions. Through their interactive app, users can complete gamified challenges, earn awards and achievements as they see how their carbon footprint changes over time.
When it comes to monetisation, the app plans on utilising B2B and B2C revenue streams. B2B: using affiliate and referral links from products and services in the app, advertising and sponsorship. B2C: they estimate 3-4% of their users will pay a monthly premium for additional features (based on the financial models of Duolingo, Strava and Couchsurfing).
Excited by the innovative developments in the sustainable technology space? Learn more about The Climate App here.
Sustainability is a topic that you simply cannot cover in one report. There are many branches on the tree. But it’s our pleasure to share new information about developments within industries, and present opportunities to not just make a profit, but most satisfyingly, make a positive impact.
To support young, ambitious and fast-growing startups with a focus on sustainability, view live pitches here.