Impactful Startups V.011

This series provides weekly insights into my top startups (Pre-Seed // Seed) that are striving to make an impact across the globe.

Today I’m shining the light on Open Water, a bottled water company focused on fighting ocean plastic pollution. The company offers water in 100% recyclable aluminum packaging that gets recycled more efficiently and more often than plastic, glass, and cartons keeping plastic out of our landfills and oceans. The Company donates a portion of each sale to ocean conservation projects. Open Water’s lineup includes still and sparkling water in reclosable 16-ounce Alumi-tek bottles and still water in standard 12-ounce cans. Based in Chicago and founded in 2014 they’ve built a great business.

Founded by Jess Page, Nicole Doucet they’re a proud member of 1% For The Planet and is a certified Women-Owned business (WBENC). Their story is pretty neat, their summers revolved around body surfing in the ocean and watersports at the lake. They took the clean waters and plastic-free beaches for granted. Now, 1 million plastic bottles are used every single minute, and more than 90% of them will end up in landfills and oceans.

Plastic bottled water is a problem, but the industry keeps growing despite the wide availability of sustainable alternatives like reusable bottles and refill stations. They needed a more pragmatic solution, so they set out to start a bottled water company that was different. They launched in 2014 and have eliminated the need for over 20 million plastic bottles.

Simply put they’re a company on a mission to help save the ocean, a theme we’ve seen before. To date they’ve eliminated 427,000 LBS of plastic.

There are some shocking facts about plastic pollution in the ocean on their site:

  • 91% of plastic never makes it to a recycling bin. Most bottles end up in landfills and oceans.
  • Plastic doesn’t get recycled, it gets downcycled into lower quality materials.
  • By 2050, there will be more plastic than fish in the ocean by weight.
  • Over 267 marine species have been impacted by ocean plastic pollution. This includes whales, turtles, and most seabirds.
  • Plastic never goes away. It breaks down into smaller and smaller pieces that get ingested by marine animals.
  • Plastic pieces make their way up the food chain and onto your plate.

With those facts we go on the learn about why aluminum is the best alternative.

  • Empty aluminum beverage containers are recycled more than twice as often as their plastic, glass, and carton counterparts.
  • Open Water uses an average of 73% post-consumer aluminum in every bottle and can. Other packaging materials (including some aluminum options) don’t fare so well on this front.
  • Aluminum recycling is a true closed loop. That means that the material from one bottle can go right back into making another identical bottle, which doesn’t happen with plastic and cartons.
  • Open Water is the 1st and only certified Climate Neutral bottled water brand. We offset all of the emissions created not only by our packaging, but by our company operations as a whole.

How about funding?

  • To date they’ve raised a $340k Seed Round from CircleUp (CircleUp is the investment platform providing capital and resources to innovative, early-stage consumer brands.)

So who is the right investor for this opportunity? With a $340k Series Seed complete back in 2016, I would imagine additional capital would help the business further expand. I think traditional venture funds would take interest to this opportunity as it has a traditional business model, mixed with an impactful initiative.

Exit Strategy: Open Water has countless exit opportunities. Likely a large strategic would be the best fit. Maybe a small private equity player or a sponsor backed business. Really the opportunities are out there and scaling is the main issue at hand right now.

Modeling out case scenarios based on the ultimate goals and progress thus far will allow for some clarity on a potential exit horizon. Next, calculating the impact multiple of money (IMM) will put pre-deal impact evaluation on par with financial evaluation. To calculate IMM, simply take social benefit ($) / invested capital ($) = IMM. Be sure to account for partial ownership depending on ownership within the cap table. At a high level successful investors within impact investing can expect investment performance to be inline or even stronger than traditional venture investments. Cambridge Associates in 2015 published its first impact investing benchmark. Their study shows just how attractive the returns can be.

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