Sourceful, the platform that uses data to enable companies to source and manage eco-friendly products for their business, has raised $12.2 million in funding – helping advance its mission of making global supply-chain sustainability more rigorous, transparent and achievable for every business. The seed round was led by Index Ventures, with participation from Eka Ventures, Venrex and Dylan Field, founder of Figma. Danny Rimer, partner of Index Ventures, joins the board.
Sourceful started from a desire to challenge the idea that consumers are to blame for the world’s environmental problems. ‘We built Sourceful because we wanted to strike at the root cause,’ says Sourceful’s CEO and co-founder Wing Chan. ‘It’s all very well to ask people to ‘shop responsibly’, but the reality is that consumers only have the choices that businesses offer, and it’s not fair to put the burden on individuals to constantly sacrifice cost and convenience.’
Founded in June 2020, Sourceful has worked with brands across the UK, EU and US to source eco-friendly packaging, merchandise and components. It has shipped over 1 million items and currently has over 40 carefully vetted suppliers in the UK and China. Sourceful's customer base spans food and beverage (Foundation Coffee House), fashion and accessories (Fenton), healthcare (Elder), and fast-growing online marketplaces (Floom and Stitched).
Chan was previously the CMO and CTO at The Hut Group, a global tech platform for direct-to-consumer brands that broke records when it listed on the London Stock Exchange in 2020. He co-founded Sourceful along with COO Shiran Zheng, who also worked at The Hut Group, VIPSHOP and Unilever, and Chief of Staff Mary Wang, previously at Credit Suisse and UBS. Overall the executive team comprises over 50% women and over 85% from under-represented minority backgrounds.
Approximately 83% of a consumer industry’s carbon footprint is in its supply chain, and a recent MediaCom survey found that 84% of people think that brands have a responsibility to be more sustainable. The recent landmark report from the Intergovernmental Panel on Climate Change revealed that the planet is warming much more quickly than anticipated, and the urgency to reach net zero carbon emissions has never been stronger.
However, despite mounting pressure from regulators and consumers, companies wishing to reduce their supply-chain emissions face several roadblocks. One is the lack of rich data or shared language around specific items: ‘bioplastic’, for example, might mean one thing to one supplier, and a different thing to another one. Business-to-business sourcing is also a highly fragmented and increasingly global market – and unlike the apps available for consumers, there’s no seamless way to shop and pay for business inputs. The consequence is that it’s next to impossible for companies to properly scope out their options and understand their true environmental footprint.
Sourceful tackles the problem in several ways. First, it allows companies to shop for emerging environmentally-conscious products in its marketplace of handpicked and carefully monitored suppliers.
Secondly, Sourceful has created a universal standard or protocol that can be used by buyers and suppliers alike to assess the sustainability impacts of different sourcing choices. These standards look at data on greenhouse gas emissions over the whole lifecycle of a product, from manufacture to shipping and logistics through to end of life. By surfacing this data, Sourceful not only allows companies to analyse their existing supply chains, but also identify areas for improvement.
Finally, it uses data-driven optimisations to provide intelligent inventory-management and warehousing services. This means companies can proactively replenish and restock products, giving them more time to focus on their brand and cutting the need for significant on-site storage.
With a new capability set to launch in 2022, businesses will be able to find, customise and design packaging, understand the sustainability impact of their specific choices and make decisions based on real-time data. The pre-release version is already allowing businesses to minimise their carbon footprint and to make products more cost-effective and of better quality.
Fenton, for example, is a high-end jewellery company that specialises in transparently sourced engagement rings. Working with Sourceful, they executed a redesign that resulted in a ring box that used 100% vegan leather, and all paper-based components were FSC certified and 100% recyclable. Fenton was able to dramatically improve the quality of packaging, reduce the number of vendors whilst also reducing costs by 50%.
‘Today, businesses simply don't have the tools to act: affordable solutions are scarce, accurate data is thin, and supply chains are complex,’ says Danny Rimer of Index Ventures. ‘Now, for the first time, Sourceful’s platform enables businesses to move from intention to action. Using Sourceful’s data driven platform, businesses can access the best suppliers and understand the implications of their supply chains in a way that wasn’t possible before. Sourceful is being led by founders with deep insight from one of the largest e-commerce infrastructure platforms in Europe, with a track record of hiring and managing high calibre teams.’
Sourceful will use the new funding to scale its current operating model and build out its technology platform for sustainable sourcing. Sourceful will also invest in talent across technology, sustainability, marketing and operations. The team has grown fivefold since the start of 2021 and is aiming to reach 60 employees by the end of the year. In addition, Sourceful has co-invested into Sourceful Climate, Europe's first platform to give businesses access to support frontier carbon removal.