- Investments into climate-conscious startups that try to reduce waste are growing.
- Sojo offers clothing repairs on demand, while Olio aims to reduce food waste.
- VCs invested more than $300 million into the sector globally in 2021.
Startups that pioneer a “circular economy” – decoupling commercial growth from the consumption of finite resources – want to win over a new generation of climate-conscious consumers.
The clothing-repair app Sojo is among the startups leading the charge.
The London-based company offers clothing repairs and alterations through a food-delivery rider-style model. Users book through an app, and a rider collects the item, which is taken to a seamster and returned within five days.
The average consumer in 2016 bought 60% more clothing compared to 2000 but kept each item half as long, according to a McKinsey report that year. At the same time, protecting the environment is a top stated concern for millennials and Gen Zs, more than a quarter of whom say their buying habits have been influenced by a business’s impact on the environment, according to Deloitte.
Despite buying secondhand, Josephine Philips, Sojo’s founder, found herself purchasing clothes that didn’t quite fit, with the intention of altering them herself.
“But I have absolutely no idea how, like much of my generation,” she told Insider. “I don’t even know where to go, and even if I did, it’s too much time and effort because we’re used to everything at our fingertips.”
The entrepreneur is now on a mission to modernize the “incredibly fragmented” tailoring and repairs industry that “has been the same since the 1800s.”
Philips isn’t alone.
The sharing app Olio enables communities to give away food and other household items that would otherwise be thrown out. The company, which also plans to introduce a borrowing section, allows people to list foods nearing their sell-by date for their neighbors to collect.
Tessa Clarke, Olio’s cofounder, says the root cause of the climate and biodiversity crisis is the consumption model that underpins economic growth.
“Olio has gone from being a food-waste app to an app that connects people,” she said. “Really our end vision is about reinventing consumption so that when you want to consume, the first thing you will think is, well what already exists in my local community? What can I kind of take for free that my neighbors don’t want? What can I borrow that my neighbors are not currently using?”
There are a host of other players. Whirli is a subscription service for toys. Grover recycles electronics. LastPad is creating reusable sanitary items. Fat Llama is pioneering the “rental revolution” through borrowing. Kitche helps consumers save money and prevent food waste by tracking receipts and suggesting recipes.
Investors are betting on the shift in habits.
Globally, VC investors have poured $375 million so far this year into circular-economy startups, with Europe leading the way, according to data from PitchBook.
European startups have lured $248 million while companies in the US have landed $116 million, compared with $180 million and $330 million totals in 2020, respectively.
The venture-capital firm Octopus Ventures, whose portfolio includes Olio, predicts a rise in marketplaces that let people take, borrow, or rent food, clothing, and electronics.
The early-stage investor Rebecca Hunt says Gen Z is driving the shift toward the sharing economy and for “big-ticket items” in particular.
“The reality is that we have probably only seen about 10% of the innovation on retail and sustainability that I’d expect to see over the next decade,” Hunt said. “This inevitably means there is an enormous amount of opportunity for entrepreneurs and distributors to build very meaningful businesses.”
The trend is visible in wider society. This year’s medals at the Tokyo Olympics were made from recycled electronics, while the luxury department store Harrods last month announced it will rent out clothes from high-end designers, allowing customers to bag a $1,000 dress for $20 a day.