Aussie eco-startup Seabin has raised another $1.2 million through equity crowdfunding, as it gears up for global expansion and “exponential” growth.
The Birchal campaign hit its maximum target within just four days, securing funding from more than 1,000 investors.
Founded by Pete Ceglinski and Andrew Turton, Seabin produces floating rubbish bins designed to clean debris from seawater by catching plastics and other pollutants in a mesh bag.
This isn’t the startup’s first equity crowdfunding rodeo. In February last year, it raised $1.7 million.
But, like everyone else, Ceglinski didn’t exactly have the 2020 he was expecting.
In last year’s campaign, the startup quickly reached its $1 million minimum target, and looked to be on track to hit the $3 million maximum with ease.
Then, the reality of the COVID-19 crisis hit. The round closed at just over $1.8 million, but in an uncertain economic environment, a handful of investors backed out, bringing the total down to $1.71 million.
Under the circumstances, that was a “totally epic” result, Ceglinski tells SmartCompany.
The majority of the 1,800 backers were retail investors — people who may well be feeling the pinch themselves.
At the same time, Seabin had to reconsider its plans for the year, and for the funding. The founders couldn’t be sure they would be able to deliver what they had promised their new investors.
For a while, they couldn’t even move units from their factory to put them in the water, Ceglinski recalls.
“We’ve been double-speed”
The co-founders were faced with a decision: hunker down, hibernate and try to ride it out, or crack on with their plans and start putting shareholders’ money to work.
Ultimately, they opted to “punch on through,” Ceglinski says.
“We were going to double down and stick to our promises that we had in the investment offer … then, if there was another side of it, we would come out with something to show.”
In the 12 months since, Ceglinski and the team have started work developing the next generation of the Seabin product, including more sophisticated sensors allowing for data collection and automated impact reporting.
They were also able to bring their manufacturing, sales and distribution network in-house, meaning everything is now done in Australia.
Then, they started working on the pilot of their Smart Cities digital platform, which will change the startup’s business model. That included bringing in some critical new hires, Ceglinski explains.
“We thought maybe we could have some downtime and upskill,” the founder says.
“We’ve been double-speed.”
A rising tide
While Seabin has generated some $6.7 million in revenue from direct sales of the units, for Ceglinski, that showed market acceptance but wasn’t a sustainable business model in the long term.
Now, the startup is phasing out sales of individual units, and instead offering lease agreements for the hardware to city councils and local governments, providing technicians to service and update them, as well as data monitoring and education programs.
The hardware itself performs considerably better when it’s serviced frequently, Ceglinski explains.
And, the data elements means decision makers can show their progress and justify the investment.
There’s also the element of education, outreach and community engagement, designed to help prevent further pollution.
A pilot program is already underway in Sydney, and Seabin is on the cusp of launching in Spain and LA.
Ceglinski doesn’t reveal any exact projections, but notes that instead of making one lifetime sale, the new model means the business will secure ten years of recurring revenue — more if you include upgrades.
He expects to see an “exponential jump in revenue.”
For Ceglinski, the timing was right for another funding round.
First of all, the founder is sure that, last year — before COVID-19 reared its head — Seabin was on track to hit its $3 million target.
“Personally, I had some unfinished business,” he admits.
But equally, against all odds, he and the team managed to deliver on the goals laid out last year. Now it’s time to focus on Seabin’s growth plans, “on scaling and taking it global,” Pete says.
And while he doesn’t rule out seeking venture capital funding in the future, this is a community-driven business, and it made sense to reach out to that community for support again.
When Seabin first proposed its Smart Cities pilot for Sydney, there was some uncertainty from the local council, Ceglinski recalls. That is until an army of shareholders took up the fight online.
“They were essentially lobbying for what we do,” he says.
“We’ve got thousands of vested shareholders.”