May 28, 2022

With growing concern about the environment and how we as humans continue to pollute it, a growing number of people are looking for ways to lead a more sustainable lifestyle. Today, a startup called Grover has built a business around one aspect of that: encouraging people to buy less consumer electronics like phones, monitors, and electric scooters, and eventually offering them lucrative subscription plans in exchange for new inventory. Or electric scooters, used gadgets – have announced a major round of funding to expand their business.

The Berlin-based company has raised $330 million — mostly $110 million in equity and $220 million in debt — money that it plans to use to expand both devices as it seeks more users. But they are also building more tools and financial services to personalize people’s experience and encourage more business on their platform through programs like loyalty programs.

Energy Impact Partners leads a Series C equity stake with co-investor partners, Corelia Capital, LG, Mirae Asset Group; Previous donors Viola Fintech, Assurant and Coperion are also participating. Fasanara Capital provides a loan. The combination of debt and equity is typical of a company that is essentially building a leasing business: it’s the same approach that Grover raised $71 million a year ago for his Series B.

The company confirmed that the value of Grover’s round exceeds $1 billion.

Grover has shown steady growth in recent years – CEO and founder Michael Kasso said Grover has doubled its membership and business base over the past year with its presence in Germany, Austria, the Netherlands, Spain and the US. It currently has half a million subscription items available in its catalog, 2 million registered users, and 250,000 active subscribers (some have signed up to use more than one gadget). This growth is due to several market trends at once.

The first of these is greater resilience and a re-evaluation of the so-called “circular economy” approach, driven not only by greater awareness of environmental issues, but also by mutual support around Covid-19, with many people communicating (sometimes for the first time) to share resources with those living nearby with them people to overcome the difficulties of the pandemic. Sometimes resources were used that were given away or sold cheaply: this opened the door for many to a different kind of thinking.

This collective change was also driven by a second trend, the tightening of the global economy, which forced consumers to consider spending less on some discretionary items.

“We believe we are making it easier to access a portion of your budget,” Casso told gaming-updates.

And the idea of ​​spending money on a product that is usable but still in good condition now seems more attractive than before.

“We are also seeing very strong demand for second or third year products,” Kasso said. “Some people want the latest products and this is especially true for brand new phones, but a large number of people are happy with the iPhone 11 or even the iPhone 10. You see this in the secondary market too,” he said, for example, in the secondary market (which at the beginning of this held a big round with a big score) where people can buy refurbished devices. “It’s a huge company, outperforming even the primary market in some markets.” Kasso said he sees the aftermarket as a major competitor in his field.

On average, a product has at least four owners over “many years,” but some items are exceptions, such as a GoPro camera in stock that’s 27 times larger than it’s in circulation.

Grover started with consumers and still counts on them as its main customers, but is also seeing a growing interest in B2B, where some consumers are now signing up for products they want to use throughout their business lives, and companies have started too. . Equip your teams, offices, Grover temps, and more generally use multiple devices as part of a larger effort to reduce their overhead and fixed costs.

The startup has also developed a range of products that Kasso calls “embedded finance,” financial services it provides in addition to the subscription business that Grover didn’t build from scratch, but using fintech APIs created by others, modified.

In this case, it offers users a Solaris Bank-built Grover card that people can use as their payment card, giving users 3% “cash” every time they spend money on the card, but earn money for their monthly subscription.

Casso said card acceptance has a stronger association with people who subscribe more to a company, often one to three products. He said advanced Grover users can spend up to $60 monthly on their subscription.

Grover now has a one-year buy option where, after that time, users can buy the item they signed up for, and about 10% of its customers choose that, he said, but most rentals, returns and exchange rates are available. for their purchases. for the next article. You can also rent in the segment from 1 to 18 months.

Funding in the corporate world comes at an interesting time: we and others have anecdotally heard that funding, especially aftermarket services and big deals, has largely dried up in recent months, due in part to public listings. On this and other issues such as conflict in Europe, with the war in Ukraine and the actions of Russia hang on all of us because of the slowness of the United States and other exits and general caution.

In this context, Casso said that Grover did not encounter any problems in his own fundraising efforts, although he could certainly see “a change in the markets since January.”

“I don’t think we were some kind of boom-and-bust company,” he continued. “We are clearly moving towards this estimate, so we have seen less of the impact of this feedback than others.”

In fact, there is hope that areas focused on sustainability and services that help ordinary consumers live in a way that respects this concept with less friction are not “trends” but complete this change.

“Grover has been able to advance the consumer electronics subscription economy, which is an important step in creating a zero-energy world,” said Najo Musa, managing partner of Energy Impact Partners, in a statement. “The intersection of society’s linear consumer habits and climate change is an important area of ​​focus” For the second EIP fund, which closed at $1 billion last year. We are confident that Grover will restore society’s relationship with consumer technology, allowing us to continue using the products we need while minimizing the damage to our planet. Our investment in Grover is part of our mission to help startups around the world get the opportunity to accelerate the transition to a more sustainable future, and we look forward to working closely with Grover as they navigate this next exciting phase.

Leave a Reply

Your email address will not be published.