Environmental startup Zero Co has raised $6 million from VC firm Square Peg Capital just as the venture launches the biggest crowd-sourced funding (CSF) campaign in Australian history.
The 11-month-old Byron Bay company, which is reducing plastic waste generated from common household products, is already generating more than $1 million a month in sales of refillable personal-care and home-cleaning products, having signed up more than 43,000 households.
Founder Mike Smith describes the closed-loop system where products are delivered carbon negative direct to door, emptied from refill pouches into reusable “Forever Bottles”, then returned in a complimentary reply-paid envelope and reused as “like the milkman, re-imagined”.
“We’re incredibly excited to have Square Peg join Zero Co’s audacious mission and are blown away by the support of our community who have shown such strong interest in becoming shareholders of the business,” he said.
“I can’t wait to grow our team of passionate business partners and work together to solve the single-use plastic problem.”
Zero Co launched in November 2020 following a Kickstart campaign that generated more than 7000 orders worth $742,000.
It already has some heavyweight backers, including Koala founders Dany Milham and Mitch Taylor, former St George Bank CEO, Rob Chapman and Right Click Capital founder Ari Klinger. Kim Jackson’s Skip Capital, Chapman and Kanbay International founder Raymond Spencer have also kicked the tin on a $2 million private round.
Square Peg Capital partner Dan Krasnostein said they’re pleased to back Zero Co’s mission to rid the world of single-use plastics and its Birchal CSF campaign opens to the public.
“Community sits at the heart of Zero Co, so it’s particularly special that we’re joining them as investors at an exciting juncture where thousands of Aussies have the opportunity to also become shareholders through their October crowd-sourced funding,” he said.
“The campaign is yet another example of how unique Mike and the teams’ first-principles thinking and customer-orientation is, and it’s fantastic to be on this journey together.”
The company has also ramped up its target for the Birchal campaign to $5 million (from $4.3m) as the expressions of interest phase closes tonight.
That figure is $2 million more than the previous record of $3 million set by Shebah Rideshare in March 2019 and matched by fintech Thrive in February 2021.
Smith said offering Zero Co customers a stake in the business is an integral part of building a powerful community to help the company’s ambition of solving the world’s plastic problem at scale.
“We’re building a people-powered solution to the global plastic problem and we want to align the interests of our customers with those of our business and our planet. There’s no better way to do that than for our customers and the general public to become our shareholders,” he said.
The offer opens at 10am Tuesday, October 19, for people who pre-registered with Birchal, with investment from the general public opening from 10am, Thursday, October 21.