[Updated in July 2022]
Within the last decade, buzzwords such as “sustainability,” “ESG,” “UN SD goals,” and “social impact” have woven their way into how startups and established companies operate. These frameworks, guiding as vehicles of change, impact how organisations build business models, implement technology, establish crucial frameworks, shape branding, and conduct their day-to-day governance. We all know actions need to be taken because the planet is at a tipping point. Some companies are frowned upon for taking advantage of these buzzwords and ‘greenwashing’, others are commended for embracing what those terms symbolise and making a positive impact through their building and delivery of tech-enabled sustainable products or services. The global drive in public markets is prioritising climate and social technologies: EVs, batteries, micro chips, energy solutions, and solar finance to name a few. In the last 3 years, most ESG stocks and indexes have outperformed the S&P 500. This is creating a flywheel of attracting more capital at all stages of companies. At Seedcamp, we are prioritising a few themes that fall under the wider sustainable bracket. Now more than ever, we’re continuously looking for founders who are both redefining and pioneering the space while addressing multi-billion dollar markets and acting as role models in an effort to scale massively for stakeholder value creation. If you’re building something ambitious in the sustainability vertical, please do get in touch and apply for funding here – we’d love to chat!
Our sustainability-focused investment bets, covering both consumer and B2B models, fall under three broad themes:
1. Companies enabling businesses to become more sustainable
2. Companies enabling sustainable consumer choices
3. Companies enabling alternative economic growth models
Companies enabling businesses to become more sustainable
Increasing global regulatory and socio-political pressure has created an opportunity for businesses to tap into new technological innovation in an effort to save the planet and enable other businesses to do the same. Why now? From an investment perspective, there’s a lot of time pressure. The UK’s ‘Clean Growth Strategy’ sets out proposals for decarbonising all sectors of the UK for cleaner economic growth over the next 20 years. In June 2019, The Climate Change Act was updated to reduce the UK’s greenhouse gas emissions to net zero by 2050. Many private corporations followed suit, as businesses are being held accountable to hit certain targets more than individual consumers are. The EU has the same climate neutrality target by 2050 and also adopted the Circular Economy Action Plan as well as additional initiatives focused on reducing waste and marine litter. Additionally, technology innovation is accelerating and rapidly changing the economics of being ‘sustainable’. For example, over the next decade we will see a drop in battery prices similar to the 80%+ drop we saw in solar over the last 15 years – this is a huge game changer. Within this theme, we want to highlight our portfolio companies that fall in the vertical SaaS sphere and are tackling the climate-tech, agri-tech and energy spaces, respectively.
Sylvera is tackling the wider decarbonisation and offsetting economy by bringing clarity to carbon offset markets as the world’s first carbon offset ratings provider. The need for carbon offsetting is imperative. In August 2021, the IPCC announced that Earth will reach a temperature rise of ~1.5C by the 2030s. As Andrew Beebe from Obvious Ventures so eloquently puts it, “the scale of this [global sustainability] transformation is on par with the digitisation economy before it.” Think of Sylvera as a parallel to Moody’s ratings towards the global capital markets. “We founded Sylvera because we believed that in order to reach net zero, the world will require a well-functioning and scalable carbon offset market,” co-founder Dr. Allister Furey says. “Such a market will only work if all participants can trust in the projects they are trading.”
In 2020 we also invested in Gardin and are excited for their competitive edge that lies in its deep agrotech, AI-enabled hardware and software. Gardin’s bold vision to maximise food production & minimise waste is implemented through its optical phenotyping technology and delivery of actionable insights. “Food producers don’t always want tech, they want their problems to be solved. This is why we have taken a full-stack approach to our solution,” says Founder Sumanta Talukdar, “good for you and good for our planet.”
This year, we were thrilled to support Granular on its mission to accelerate the transition to carbon-free electricity systems. Granular sells hourly certificates of renewable electricity to provide more transparency on the sources of electricity to mitigate greenwashing. “Demand for clean energy from consumers is at an all-time high, with major businesses pursuing commitments to source clean energy on a 24/7 basis,” says co-founder Bruno Menu. To help companies to stay compliant with the new rules introduced by European Commission for green hydrogen (which includes hourly matching), Granular is here to establish the market framework improving efficiency and liquidity in the space.
Companies enabling sustainable consumer choices
The very nature of the ‘consumer’ has been evolving. In a 2019 study conducted by Edelman, 64% of consumers said that they are belief-driven buyers, empowered by choice. Nowadays, this next generation of consumers wants to know where their purchases come from and what impact their money is making. There have been countless surveys that have found that the majority of consumers are willing to spend more in return for a stronger, positive impact, and are willing to align themselves with the brands that are showing this commitment.
One of our portfolio companies empowering consumers is Early Majority. The brand was founded on the belief that consumers have the power to become activists. Founder Joy Howard is working on innovating Early Majority’s business model and supply chain by reacting to consumer expectations while also empowering their purchasing decisions. The company hopes to take responsibility and accountability with the product by focusing on materials that reduce emissions and water waste. From a brand perspective, EM hopes to provide certain tools to consumers to encourage them to be a part of the story and to explore what it means to be a consumer. “You can change your business model only so far as people give a s*it about it,” Joy states. We’re super excited to back the all-female team and are confident Joy’s past experience at Patagonia, Lyft, Sonos, and Nike (and more!) will allow for Early Majority to redefine the sustainable materials space.
Another portfolio company empowering consumer choice is plant-based meat alternative company, THIS, founded by Andy Shovel and Pete Sharman. THIS captures our collective desire to explore flexitarian diets. Andy and Pete spent two years researching and partnering with world-leading texture scientists and flavourists. The meat-alternative, using pea and soy beans as its base, mimics the meat in taste, texture, look and smell but doesn’t come with the ethical and environmental impact. The brand gathered a lot of support in its Seedrs crowdfunding campaign, raising £4.4m, and achieved an impressive 700% growth in just one year. THIS perfectly fulfills people’s desire to reduce their meat consumption with great tasting, meat-free products, making it easier than ever for people to not only feel good but enjoy what they’re eating.
Similarly, on the consumers making meaningful action front, Treecard is tackling this on the Fintech front. The wooden Mastercard reforests the planet, one payment at a time. Treecard was initially backed by Ecosia, the green research engine that has planted north of 130M trees. Treecard is now on a mission to build a green fintech ecosystem by backing consumers’ sustainable purchasing intentions, by planting trees as users make purchases. We find Treecard really interesting because it makes consumers feel like they can actively take real action to make the world a better and more sustainable place.
And we are very pleased to welcome a new joiner to our Seedcamp Nation – The Electric Car Scheme. The team accelerates the transition to electric cars via salary sacrifice scheme at much lower cost. We truly believe that long term health of our planet starts with our decisions today and The Electric Car Scheme is on the frontline of setting the right incentivisation scheme to make the right choices: employees can benefit from a wide choice of electric vehicles with insurance and maintenance while companies of any size have an access to the government benefits without bearing a risk of bringing this benefit to the employess.
Companies enabling alternative economic growth models
The linear model, or the ‘take-make-dispose’ economy model has reached its physical limitations. The businesses that are adapting to a circular model or starting their supply chains from scratch to ensure circularity, will 1) create positive impact by being purpose-driven, sustainably and/or socially 2) increase their competitiveness within their sectors 3) ultimately appeal more to investors for funding. These companies are applauded for not fearing transition risk that may arise when moving from a linear model to a circular model. The circular economy is said to be valued at $4.5 trillion by 2030. Within our portfolio, we’ve highlighted a few companies whose models fall within the circular economy framework by maximising value and minimising waste:
Grover just recently secured $1 billion in financing which was the largest ever funding round for a consumer tech start-up. The platform is reinventing consumption with a simple, on-demand subscription model for tech products.
VitroLabs is leading an incredibly innovative way of growing sustainable leather. By planting a cell that comes from a harmless one-time biopsy from an animal, VitroLabs’ technology allows for the cells to regenerate and grow, producing a natural leather that has a significant reduction in environmental impact compared to both ‘traditional’ and ‘vegan’ leathers.
ClubZero replaces single-use packaging by using a sustainable, reusable food and beverage packaging system.
Vinterior is a marketplace that connects professional furniture sellers to buyers of vintage and design furniture, extending the life of thousands of material products. The two female co-founders, Leslie and Sandrine, have just raised their Series A to continue their mission to become the leading curated vintage marketplace for sustainable home decor. The cherry on top is the fact that wood (the predominant material used for furniture) generally stores carbon. As long as wood stays as wood and isn’t burned, be it a tree or furniture, then carbon isn’t released into the air.
Hackyourcloset is on a mission to extend the life cycle of the 2,080,544 tons of clothes that are produced and unused in Europe each year. The platform gives access to the first shared closets in Europe through an online experience reshaping how we consume clothes. “When I thought of building data-driven and shared closets to solve the urgency for sustainability,” co-founder Lisa says, “the question was can we get people to spend 50% less while getting a 100% more and reducing their monthly impact by 99%.” Hackyourcloset is an example of what happens when consumers, brands and startups come together and create positive impact at scale.
What we’re looking for moving forward
The amalgamation of consumers, investors and existing businesses are now aware of the opportunities that come from sustainable-driven businesses. These companies will not only spur economic and social mobility, but will create a lasting positive impact on the planet and long-term value creation for all stakeholders. We have already seen some startups and scale ups leading the way that have raised significant funding (Spiber, Icon, Trove, Apeel). The three themes we have highlighted frame some of our portfolio companies that we’re very excited about. However, in no way are we limiting ourselves, and we are constantly keeping an eye out for future founders and business opportunities that will become the role models in saving our planet. The decarbonisation economy will give way to new business models across various industries from the energy sector, to transportation, to manufacturing, to proptech, to agro-tech and consumer goods.
If you’re working on something interesting in the sustainability space, apply here or email us at email@example.com. Additionally, if you’re looking for a job, feel free to check out our portfolio companies job board here. And if you’re looking to read more, our fellow VC partners in the ecosystem (Speedinvest, Creandum, MMC Ventures) have also published a few thought pieces on the space.
Seedcamp’s sustainable footprint (so far…)
Sylvera: Building the technical infrastructure and verification layer underpinning carbon markets
Gardin: Nutritional and food quality analytics
Winnow Solutions: Improving efficiency in hospitality by reducing food waste powered by AI
Early Majority: Functional, stylish, eco-friendly outdoor wear
Treecard: The payment card that reforests the planet with your everyday spending
THIS: Producing realistic, plant-based meat products for the mass-market
Julienne Bruno: Plant-based frozen pizza
Troop: Unlocking the collective power of shareholder rights
Grover: Reinventing consumption with a simple, on-demand subscription model for all the products you love.
VitroLabs: Lab grown leather
CLUBZERO: Reusable food and beverage packaging system that replaces single-use packaging
Vinterior: A two-sided marketplace connecting professional furniture sellers to buyers of vintage and design furniture
Hackyourcloset: Your second-hand personal shopping experience
Clearago: All-in-one solution for connecting waste producers and collectors
Martie: Rescue perfectly awesome food from a perfectly awful landfill at 40-70% off retail.
Protaganist: is a collaboration space for the purpose economy–professionals and organizations working in climate change, the SDGs, deep tech, social impact, human rights, ESG, the arts and sciences.
The Electric Car Scheme: Government tax benefit on any electric vehicle
Granular: introduces certificates of renewable electricity to accelerate the transition to carbon-free electricity systems.
Paua: introduces an Electric Vehicle charge card giving the access to thousands of charging points from different networks.
Full-Speed Automation: builds no-code intelligent manufacturing software to focus on local production and reduce congestion associated with transportation leading to cleaner and more agile factories.