It’s been a big week for eco-startup Zero Co, which secured $11 million in new funding and broke a ream of records in the process. But this success is indicative of a broader trend in Aussie startups, with sustainability at its core.
Earlier this week, Zero Co announced it had secured $6 million in venture capital funding from Square Peg.
At the same time, it launched an equity crowdfunding campaign, hitting its minimum target of $1 million within a record-breaking five minutes.
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It topped out its campaign at $5 million in just six-and-a-half hours, making it the fastest closing of an equity crowdfunding campaign in Australian history. The raise attracted so much interest that the increase in traffic caused Birchal’s servers to crash.
Founded in 2019 out of co-founder Mike Smith’s frustration at funding plastic waste in some of the most remote parts of the world, Zero Co provides its customers with reusable bottles for household cleaning items, made from reclaimed plastic.
The startup sends customers pouches of replacement products, allowing users to refill their bottles. The pouches are then returned for cleaning and re-refilling via postage-paid envelopes.
But it’s not the only startup tapping into the reusable and circular economy trend.
Victorian startup The Daily Routine sells capsules that can be dissolved in water to create plastic-free hand soaps, while The Dirt Company offers a model similar to Zero Co’s, for laundry detergent.
Another soap-tablet business, Single Use Ain’t Sexy, also recently closed its own Birchal campaign, raising $600,000 in 48 hours.
Gavin Appel, founder of startup advisory Ignition Lane, observes that we’re seeing more innovation in industries that have been relatively stagnant for the past two decades or more.
Household goods and the sustainable economy may well be next.
A lot of this is being driven by the increasing focus, globally, on reducing climate change and protecting the environment. It means founders are shifting their focus to solving these problems, and investors are taking note.
“The problem they’re looking to solve is a major crisis that’s affecting the entire planet,” Appel tells SmartCompany.
“That mission resonates with the broader community.”
It’s unusual for a business to close a VC round and an equity crowdfunding round within the same week.
But impact is becoming increasingly important in venture capital, and with interest rates low and social consciousness high, individuals are also looking for new ways to make their money work for them, and for the good of the world.
With more and more climate-impact startups emerging, Appel expects to see more success stories like Zero Co’s.
There is long-awaited innovation underway, with founders tackling new challenges with new technologies and innovations.
“They’re the new problems and investors are getting excited by it,” Appel says.
“I do think we’ll see more capital flow into it.”