Investor Insights
November- 2020
Our focus this month is sustainable fashion – a new and exciting investment opportunity.
The pandemic has disturbed many industries this year. Most notable has been the fashion industry, especially as our focus, as consumers, has been on more pressing matters. However, the major reduction in travel has revealed itself to markedly lessen pollution. Governments around the world have been waking up to the need for action on climate change motivated by both the strong demands of the young people, and by the UN Sustainable Development Goals, of which goal 13 is ‘Climate Action’.
The reality is that fashion is one of the most wasteful industries of all with McKinsey estimating the sector is responsible for over two billion metric tons of greenhouse gas a year – equivalent to the entire economics of France, Germany, and the UK combined [article]. The World Bank estimates that the fashion industry is responsible for more global carbon emissions than all international flights and maritime shipping combined [article]. However, fashion is a key component of the global economy with some 430 million people worldwide working in the fashion and textile industries (one in eight of all workers) [article]. Taking all these points into consideration, it is no surprise that the fashion industry is undergoing an evolution in the investments in the innovation and sustainability area; an important component in the surge in investment is the ESG sector worldwide.
Most consumers have now begun to pay attention to the impact of their purchases on the climate. Building on consumer awareness of the impact on the environment and responding to the sustainability challenges the fashion industry is evolving the business environment to take things to the next level. Venture capitalists and funds injecting cash into businesses that have an emphasis on social and environmental causes have been on the rise. European investors poured €120 billion into ethical investments in 2019, which is nearly €75 billion up in comparison to the previous year [article].
Steph Stephenson (Co-chair of the Cordes Foundation) said, “I have really noticed that as the sustainable fashion conversation and the impact investing conversation are growing, people are discovering the opportunities for overlap between the two.” [article]
Declining customer spending, and disrupted supply chains, have played an important part in the move of the fashion industry towards sustainability – a trend expected to accelerate in the near future. In fact, sustainable fashion has taken center stage in the shift towards impact-investing; clearly demonstrating that sustainability isn’t just a passing trend but is a macroeconomic drive towards a greener future. Not only that consumers are especially mindful of the environmental and social consequences of their fashion spending, but they do want to buy more purposefully and meaningfully.
Inside this issue:
With our primary mission of supporting new sustainability-driven companies, our focus this month is on sustainable fashion. We have been following a number of innovative companies that are bringing new solutions and new products to the market. Review these below and talk to us for more information.
Circular Fashion Economy
More than 85% of worldwide clothing is discarded with some 13 million tons of textiles ending up wasted in landfills in the USA every year, accounting for 9% of total non-recycled waste [article]. Replacing this “take-make-dispose” phenomenon, that is undeniably unfit for the modern world, has triggered the attention of companies, manufacturers, and consumers.
The firm that we are following closely, has designed a sustainable footwear destined to be a key element of the circular economy for fashion. They have launched a marketing campaign that has reached an impressive level of traction based entirely on founder funds. They are now seeking compatible investors to ramp up their production, marketing, and distribution channels.
If the circular economy intrigues you, talk to us today.
Source: Common objective, What is circular fashion?
Source: Common objective, What is circular fashion?
Opening an important secondary market for luxury fashion
The luxury retail market is seeing circular economy solution as an important driver in luxury purchases to cater to the concerns of affluent young sustainability-focused consumers. As luxury products tend to be both durable and timeless, the secondary (resale) market has been significantly boosted by their online retail growth.
Luxury resale is growing four times faster than overall luxury
Luxury resale becomes a faster growing luxury trend based
on 4 consumer drivers: digital, affordability, collectability
and preference towards sustainability.
Source: Luxury resale: A Second-hand Strategy for Luxury
Brands, Luxe Digital, 2020
Luxury resale is growing four times faster than overall luxury
Luxury resale becomes a faster growing luxury trend based
on 4 consumer drivers: digital, affordability, collectability
and preference towards sustainability.
Source: Luxury resale: A Second-hand Strategy for Luxury
Brands, Luxe Digital, 2020
The secondary retail market is expected to be worth $51 billion by 2023 (growing twenty times faster than the ‘All Retail Apparel’ market). This equates that the luxury second-hand retail market is growing four times faster than a retail luxury market [article]. Overall, the resale market is expected to double its market share in ten years and is projected to grow 5-times in five years while the retail is expected to shrink [article].
Secondhand Market set to hit $64 Billion in the next 5 years
Source: thredUP, Resale Growth Report, 2020
Secondhand Market set to hit $64 Billion in the next 5 years
Source: thredUP, Resale Growth Report, 2020
Circular Luxury Fashion Company
The firm we are supporting upholds the resale ideology to implement circular fashion models to bridge luxury brands with second-hand markets. Working to reframe the conversation on fashion and weave a sustainable innovation process into responsible shopping, retail luxury shopping brands have joined their outstanding technology solution.
Their solution to the world of fashion is an innovative technology that services and allows retail consumers to resell their old luxury fashion items on multiple second-hand marketplaces of brands. Using this technology retail brands connect with their customers and help them resell their old purchases and for the exchange offer, repurchased digital shopping credits.
This integrated resale ecosystem does not just enable brands and retailers to make responsible choices, but it also encourages consumers to be mindful of their purchases and pass on loved items from one to the other. The firm has extended its next round and is now seeking an investment of $1 Million to scale up its operations.
Their bright future speaks volumes as they move forward with a capital acquisition from reputable fashion houses that have a substantial market share. Next year will be fully operational for them when the high expected revenues are to reach. This is a booming market and a good time opportunity for investors to embark on. Interested? Talk to us today.
Where to next?
A desire for sustainable fashion and an interest in impact investing is growing. People are discovering the opportunities that meet both needs. Those who have the means and money to invest are helping the shift towards more sustainable business models and supply chains. The future of fashion businesses is bright because of this refreshing perspective.
While the world saw many dark days in the last months, there also have been lessons for all of us. Closing the year with this newsletter, I share a warm sense of gratitude towards those who have walked with us in these transitional times.
Together we will grow wiser in the choices we make, the content we consume, and our impact on the world at large. Our world is our responsibility to care for, both today and for generations to come. Our growing awareness of the need for sustainability and making the right choices will ensure that we are safe, protected, and successful in the years ahead.
As the African proverb states – “If you want to go fast, go alone – if you want to go far, go together.”
I trust that the New Year will ring in new vigor, fresh energy, and strong intentions to do more for the world in which we live.
carbon market participants into a global ecosystem for financial and environmental gains, with a focus on energy, water, and food. It serves as a distributed hub and connective tissue to link multiple international carbon exchanges and other buyside carbon emitters and custodians with supply-side carbon offset projects and ESG project owners globally to drive distribution. For the purpose of keeping carbon credit ledger data up to date, their software also communicates with reputable third-party registries.
and reforestation to deliver results that are in line with the UN Sustainable Development Goals. It specializes in giving clients advice on energy efficiency, clean energy options, tr
After a year of service, the e-ferry’s operators concluded that the system has a highly sustainable energy efficiency of 85%, almost twice that of diesel boats. With this background, the US$20 billion market expectation for electric watercraft seems more than reasonable. To support this industry, we are following a firm that has designed, and begun delivering, an electric-powered watercraft. Destined for the lucrative leisure market, this is a mere stepping stone to the huge water taxi market for which a design is already complete.
technology that detects one of the deadliest types of cancer and treats it without damaging healthy cells and tissues. Its electromagnetic stimulation, combined with a nanotechnology system, has demonstrated the preclinical treatment to be safe and effective. The medical device has been classified as class III to chronically treat and reduce cancer’s mass significantly from further development. The firm has started Phase I and seeking investments to support this phase. Based on Phase I results, which will be within 12-15 months, they plan an IPO for Phase II, the last one before the commercial launch in North America by 2024.
The firm’s platform matches investors with advanced learners by exploiting the fully scalable and high-return potential of non-loan Income Share Agreements (ISA’s). Investors in ISA’s may finely tune their investment criteria to match their corporate objectives, which may include CSR targets. Currently, the firm is proposing two types of investment opportunity: in the infinite possibilities of direct investments in ISA’s and, more conventionally, investments in shares (and, as the firm is designated by the French state as an innovative firm, offers the possibility of French residency/citizenship).
