2020 in Review: Sustainability Edition

SFC Capital reinforces its commitment to impact investing and takes a look at some of the sustainable ventures it has backed to date

The Global Carbon Project released that their researchers estimate that lockdown measures in response to the COVID-19 pandemic triggered a 7% drop in global emissions, with some researchers suggesting that a drop of this level hasn’t been recorded since 1945. 2020 was a year that forced us to re-invent our day to day, for the safety and security of ourselves and those around us. Observing these shifts occur globally, one has to wonder what new habits we can carry with us beyond the pandemic to minimise our emissions on both micro and macro levels. 

The pandemic ultimately cast a light on how inefficiently we operate. Last year, we saw an influx of driven founders that were quick to identify these inefficiencies and formulate unique solutions that create lasting change applying for funding with SFC Capital. This agitation excites us and reinvigorates us as we work to maximise impact and returns for our investors simultaneously.

SFC Capital’s ongoing commitment to sustainability has always been an integral part of our investment due diligence process. Impact is inherent to innovation, so too is problem-solving. We encourage entrepreneurs with the foresight, awareness and understanding that they have the potential to re-invent antiquated processes and products by implementing grit, a growth mindset, and the right balance of passion and calculation.

We recognise our responsibility as the UK’s most active VC and early-stage funder, we realise that who we support dictates the scope and landscape of the British innovators’ ecosystem, and further, that impact is not limited to sustainability but diversity too. This said, moving forward, at SFC Capital we will continue to reinforce our commitment to impact investing, adjusting our thesis to the realisation that as a collective we are more than capable of shifting the status quo and making small changes that have detrimental effects on our environmental and social well-being; individual and societal. 

To summarise our period of retrospection, we wanted to highlight some of the sustainable ventures we seeded to date: from new meat alternatives to air quality monitoring, ESG tools in financial services or new forms of mobility, our generalist strategy has allowed us to back some great innovations that have a positive environmental and societal impact across a broad range of industries.

Jack and Bry

Jack & Bry is on a mission to make the tastiest, meat-free meats. People want to eat less meat, more often, but struggle to find highly nutritious options without the heavy processing. Jack & Bry developed a jackfruit solution. With its high fibre and low-calorie qualities, Jack & Bry brings flavour hugging and fleshy plant-based dishes to the table. Their jackfruit pepperoni launched in 164 Zizzi restaurants and 350 Papa John’s restaurants, selling over 20 million Jackfruit Pepperoni slices thus far. Now being stocked in Sainsbury’s on Zizzi retail pizzas, Jack & Bry has turned significant revenues in their first year of trading and hope to increase these figures as they launch their burger, sausage, and burger bundles on Deliveroo in Q1 of this year.

Vortex IoT

Vortex IoT is building sensing devices to monitor air pollution and network systems for harsh environments, where conditions are hostile, power supply is limited, and AI + data security is critical. Despite the pandemic putting many projects on hold in Q2, Vortex IoT proved hardy, achieving record sales as well as new R&D grant work. Impressively, they’ve also won projects with 3 major public bodies to deploy their rail and air quality products; a £400k deployment of their rail product with Network Rail, a new £620k project with West Midlands 5G, and a new project for Air Quality Monitoring with the London Borough of Hammersmith & Fulham, which will be the densest deployment of air quality monitoring systems in the UK. Consequently, they are increasing their headcount to provide for the realisation of these new projects. Vortex IoT will be kickstarting a new fundraising round to accelerate and propel their growth further.

Swytch Bike

Swytch Bike is the world’s lightest, most compatible removable eBike kit, allowing users to convert their bicycles into electric bikes with ease. Swytch proved to be pandemic-resilient, with social-distancing measures moving people off the roads and into the cycle lanes. Featured on the BBC Click Technology show, the Gadget Show and Fully Charged, Swytch has seen their pre-launch sales double and project this trend to continue. To maintain this growth in the long term, Swytch is expanding their sales team, as well as building an engineering and R&D team to fortify product development. These efforts and traction are cumulating in a projected profitable fiscal year. This is a great result that has positive implications for the potential outlook for the business in 2021 and beyond.

Petalite

Petalite is an engineering company based in Birmingham taking a next generation battery charging technology for electric vehicles to market. They have developed the technology and IP for commercially-ready systems to supercharge batteries to 100% in under 15 minutes. The company had a strong 2020; it closed a major funding round in April 2020, and won three Innovate UK grants to develop and certify its commercial charger prototypes. Petalite has successfully developed its charging technology to a sales demonstration stage (TRL Level 6), and this new round of investment will allow the company to take the product to a commercialisation stage (TRL Level 7). Petalite expects to have two AC charger products certified and saleable by Q1 2021 and is on target to launch its revolutionary DC charger product in 2022. Petalite was also admitted to the Tech Nation growth platform this year; Tech Nation is a UK Government-backed technology accelerator program which will increase Petalites profile and assist in generating Business Development opportunities globally.

Agsenze

Agsenze’s mission is to revolutionise the global agricultural industry by leading the way in ‘smart livestock agriculture’. The company’s main product is Herdvision, a 3D-scanning software helping farmers monitor the condition and health of their cows, from the chemical, physical to the biological. The product has been developed for 4 years and is ready to go to market. Since early 2019, Agsenze has been collaborating with Arla, a farmers’ cooperative controlling over 40% of the dairy production in the UK. Arla are rolling out a new welfare standard called ‘Arla 360 UK farmer programme’, which will be applied to all their farms, and Agsenze is aiming to position Herdvision as the data solution for that program. To date, 9 pilot Arla farms are testing the product and a joint PR was issued this year. The company expects a full market launch across the UK in early 2021. The company closed a new funding round in April 2020 to provide the necessary capital to execute this plan, in addition to receiving several Innovate UK grants which fund the company’s R&D efforts.

HiyaCar

HiyaCar aims to reduce car ownership by capitalising on those already parked on the street, idle. Their car-sharing platform creates a virtual fleet to which car owners can list their cars, and their neighbours can hire it. Their peer-to-peer model is driven by engaging community mindset, as well as comprehensive insurance and roadside assistance offered on all hires. Their safe verification system and keyless technology enables users to drive with confidence, comfort and convenience. HiyaCar aims to minimise car sales by maximising car owner’s utility of their existing vehicles, hoping to change the way Brits use cars forever.

Nossa Data

Nossa Data is a female-led venture tackling ESG data management, reporting and analytics, driven by the core belief that companies need to adequately measure and improve their ESG performance in order to outperform in the long run. With ESG becoming mainstream and consequently inspiring increasing investor demand to prioritise non-financial impact as well as the imposition of new regulatory requirements, Nossa Data is launching at an opportune time. The great number of pertinent indices creates difficulty for companies working on meeting reporting and rating requirements. Nossa’s solution allows companies to do so efficiently, with the aggregation of peer analysis, third party data sets, public data and internal data that prepares external and internal reports as well as actionable feedback for companies looking to optimise their ESG positions. Co-developed by their publicly listed pilot clients, Nossa Data closed their pre-seed round with the ambition of further product development, converting their sales pipeline and enhancing their platform.

BirdsEyeView

BirdsEyeView is a B2B InsurTech startup working to combine advanced aerial intelligence solutions with cutting-edge analytics to revolutionise the crop insurance market, harnessing the power of satellite imagery and artificial intelligence to provide security for farmers globally. By operating as a managing general underwriter, BirdsEyeView enables farmers to purchase simple and tailored crop insurance from their mobile. Motivated by an increase in the severity and frequency of climate change induced natural disasters, the product aims to protect economic security, food security, and encourage sustainable farming practices by way of lower premiums. The use of hyper-local satellite data mitigates the complications inherent to on-site loss adjustments that lag by way of time consumption, cost, and valuation disagreements. Their pre-seed round is taking the company through their proof of concept, collaboration from institutional insurers and development of their beta product.

Transcend Packaging

Based in South Wales, Transcend Packaging specialises in providing sustainable packaging products to quick-service restaurants, including the likes of McDonald’s and Starbucks. Following a strong 2019 – which concluded in muscular revenues for FY19 – Transcend Packaging had an excellent 2020 despite the challenges raised by the pandemic. Transcend has become one of Europe’s largest paper straw makers, producing in excess of 1.2 billion straws p.a., and is on track to triple its revenue despite COVID-19. The company is seeing strong growth, encouraged by favourable regulations – such as the ban on single-use plastic straws in the UK and Europe. The company is expanding its product range into paper cups and cutlery after partially converting production lines to supply over 15 million protective face shields to the NHS and the UK Department of Health and Social Care in April. The shields are plastic-free and fully compostable, which has proven extremely popular, with demand for the range increasing. The pivot helped safeguard the jobs of over 70 employees as orders for the hospitality sector dropped during lockdown. Transcend has also raised more than £10m of funding, led by IW Capital and SFC Capital, to facilitate the growth of the business, which it will use to expand its range of paper-based packaging solutions to further reduce the quick-serve industry’s dependence on single-use plastics.

Nimble Babies

Nimble Babies was born out of a chemist’s desire and panic to keep his new-born niece safe from the harsh chemicals he found in her cleaning products. Nimble Babies makes plant-powered cleaning products hand-picked to match the things that need cleaning, without being overly dosed with industrial agents that pose potential risks to young children. Their vegan products are stocked by major retailers like Amazon, Ocado, Boots and Sainsbury’s, and have found success as an award winner in the infant consumer product space. Their product line is expanding, facilitating parents’ lives and babies’ well-being. 

Fussy

Fussy is a refillable plant-powered deodorant helping turn the tide on single-use plastic by disrupting your morning routine. A subscription model, Fussy delivers refills every 3 months. Originally launched on Kickstarter, Fussy saw almost £100,000 raised, and 2,300 customers come on board in 21 days, closing this equity round to scale, implement an influencer strategy, form strategic partnerships, and expand outside of the UK. Their ergonomic product and sustainable model is led by branding specialists within and without consumer products.