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New study reveals investor preference for sustainable start-ups

June 5, 2023

The study, conducted by FTI Consulting, found that German venture capital and private equity investors rate sustainable companies 13 per cent higher in valuation.

A recent study commissioned by Amazon has shown that investors strongly prefer start-ups with a clear focus on sustainability. The study, conducted by FTI Consulting, found that German venture capital and private equity investors rate sustainable companies 13 per cent higher in valuation. Conversely, start-ups with poor sustainability records face a potential valuation decrease of up to five per cent.

The study also highlighted the increasing demand for information on the sustainability practices of start-ups among investors. In the past 12 months, over two-thirds of surveyed German investors (70 per cent) have sought information about the sustainability initiatives of start-ups they consider investing in. This growing interest is driven by personal beliefs and the sustainability commitments of investors’ companies. Furthermore, a significant majority (77 per cent) of investors emphasized the need for more support to encourage start-ups to adopt sustainable operations.

In conjunction with the study’s findings, Amazon announced the selection of 16 start-ups to participate in the second Amazon Sustainability Accelerator. Four German companies made the cut out of the 1,500 start-ups that applied from across Europe. The accelerator, a collaboration between Amazon, EIT Climate-KIC, and WRAP, supports start-ups developing new recycling technologies and more sustainable products.

The German participants in the accelerator program include FUNQ’, a company offering a superfruit syrup for self-mixing, and Papair, which provides a more sustainable alternative to conventional packaging through its recycled paper bubble wrap.

Rocco Bräuniger, Country Manager Amazon.de, emphasized the advantage that sustainability-focused companies have in today’s investment landscape. He noted that investors are increasingly seeking solutions to address climate and waste-related challenges, making sustainability considerations a crucial factor in their decision-making process.

The Amazon Sustainability Accelerator is a 12-week program tailored to support founders in launching and scaling sustainable businesses. It provides participants with workshops, mentoring, customized curricula, and access to a network of like-minded entrepreneurs. In addition, the program offers funding in the form of an equity-free grant and credits for AWS Activate, as well as access to Amazon’s offices in Berlin and London.

The accelerator aims to help start-ups develop a climate impact assessment to enhance their environmental friendliness. It also allows participants to present their companies to experienced investors and expand their networks for potential future investments. Last year’s cohort saw an average sales increase of over 250 per cent through Amazon and other channels, with two German companies raising over 5 million euros in financing post-program.

The selected start-ups in this year’s accelerator cover a range of consumer goods and recycling technologies. Among them are companies such as Bo, a UK-based e-scooter manufacturer, and Nimbi, which produces compostable razors from biomaterials. In the recycling technologies category, Descycle from the UK offers environmentally friendly solutions for metal processing, while Terrawaste from the Netherlands specializes in the chemical recycling of non-recyclable plastic waste.

The Amazon Sustainability Accelerator continues to provide a platform for promising start-ups to drive innovation, develop sustainable technologies, and positively impact the planet.

Categories : World Focus

Tags : Amazon Business Investment SMBs Sustainability

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