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Growth is great, but growing greener is taking on a new urgency for mid-sized businesses against a backdrop of climate change awareness and uncertainty for our collective future. The UK government is urging SMEs to commit to the Net Zero goal as part of a global campaign, via its UK Business Hub, in order to promote more environmentally conscious ways of working.
While businesses are in growth phase, they still have the power and are nimble enough to make fundamental widespread company changes that can impact the direction of the business for years to come. They also have the power to develop a culture that fosters an environment that takes into account corporate social responsibility from the very beginning of the business’ conception – this is why planting the right seeds at SME size is so important.
SMEs’ combined environmental impact is in many ways more significant than big corporations’, according to recent commentary from The Open University, rendering them a mighty force to be reckoned with and also destructive in their aggregate carbon footprint.
Making changes is easier said than done, though; SMEs are typically less well-resourced and face challenges around implementing practices that make their operations more sustainable. This must be taken into consideration. That said, there is a clear opportunity for the collective firepower of small businesses to gain support from their partners and customers by shifting to a greener mindset communicated through their company culture and rolling out practices that can make impactful long-term changes.
The term sustainability is often thrown around but drilling down into the social aspect of the concept is most relevant for smaller businesses in the growth stage. Mostly the conversation focuses on consumption costs and the environmental side of operations, but for green initiatives to make a real impact and meet compliance standards, businesses need buy-in from their people. Relying on people-power is especially important for mid-sized businesses; for a sustainability strategy to really work, they need to be onboard from the outset. Employee engagement means creating a set of shared values around the issue that everyone can get onboard with, and speaks to individual personal – as well as professional – values.
Sustainable business is about creating practices that can last, and much of this relies on the creation of a solid and nurturing culture. Creating a fabric of shared and realistic values helps motivate a cohort and in turn allows for a much higher margin of productivity. To enact real change, everyone in the business must be on the same page about shared goals and how to get there – a green ethos is achievable this way.
Practical approaches to sustainability are often what’s missing and hard to achieve for smaller businesses – unlike their mighty corporate counterparts, it’s unlikely there’s a dedicated team monitoring for legislation changes like carbon tax rises and impending restrictions. A great way to demonstrate commitment to sustainable business is through investing in carbon offsetting schemes and packages, either locally or internationally. Funding projects that focus on reforesting and rewilding, for example, is a good way to do this.
Taking a step back and viewing the green credibility of supply chains can be a daunting task for SMEs – understanding how each piece of the overall puzzle contributes to your carbon footprint can cause headaches. However, now, many suppliers must be upfront and provide visibility by declaring their carbon emission status, which makes it easier to select the most responsible ones to work with. Making no compromises on your businesses’ shared sustainability values and culture must also apply to your wider supply chain, too.
People are at the heart of a business so their viewpoints on how to move forward in a sustainable way should always be taken into account and used to steer the ship. SMEs may not need to look as closely at carbon emissions produced by business travel programmes, for example, but when it comes to the cost of overheads, measuring consumption has become a lot harder since the shift to hybrid working.
Allowing for flexibility in work location underpins a healthy culture post-pandemic; it gives people the agency to make the best decision about how and where they work to provide the most value to the business. With this in mind, and to ensure flexible working can work from a sustainability standpoint, there are tools available like carbon calculators that can give a better idea of emission production which can help business leaders monitor energy consumption across the workforce.
Introducing a values-based approach for sustainable business is the best way to drive change, ultimately. A culture that openly discusses the best initiatives and routes to take in order to maintain a sustainable business strategy is guaranteed to thrive.
People want to work for companies that do the right thing. And involving them in conversations when it comes to determining the direction of the business is the best way to promote trust in where everyone is heading. Setting common goals on ethical decisions that impact wider communities will help to boost morale and could even mean that people are more likely to stick around to see how the business thrives as it scales up.
Businesses that demonstrate their green credibility and measurement also have a better chance of attracting and securing the next generation of talent, by being clear about their commitment to working in a way that is ethical and aligns with their own values, and being transparent about how they plan to get there if there’s still work to be done. Beyond the practical environmental benefits of sustainable working practices, creating a community culture of like-minded people is certainly the best way for a business to stand the test of time.
Committing to developing a culture built to last starts with a pledge – regardless of where you are in your journey, joining the Breathe Culture Pledge gives you the recognition and resources you need to take your culture to the next step.
JamJar Investments has raised over £100m in its new fund to support early-stage consumer brands across the UK and Europe.
The capital came from institutional investors, founders and a crowdfund including a cornerstone commitment of £48m from British Business Bank’s Enterprise Capital Funds (ECF) programme.
London-based JamJar was founded in 2013 by Adam Balon, Jon Wright, and Richard Reed, the founders of Innocent Drinks which was sold to Coca-Cola for over $700m (£534.4m).
“JamJar is looking forward to helping new category-defining brands win their fight. Consumer consciousness is in our blood, and we are proud to be the first fund to absorb all Seedrs fees meaning our crowd has come in on exactly the same terms as larger LPs,” commented Katie Marraché, partner, JamJar.
JamJar’s first fund was created two days after the founders left Innocent in 2013. Since then it has backed a portfolio of high-performing companies, including What3words, Deliveroo and Oatly. JamJar normally invests between £500,000 to £3m in Seed or Series A rounds.
JamJar’s new fund looks to target 10 investments a year, with half of the fund being reserved for follow up investments.
Founded in 2014, the British Business Bank is the government’s economic development bank that aims to help the UK move to a net zero economy by giving access to finance for small businesses.
The British Business Bank’s main programmes are responsible for providing over £8.5bn of capital to nearly 95,000 small businesses.
“The British Business Bank’s Enterprise Capital Funds programme is key in helping to develop and maintain effective venture capital provision in the UK, lowering the barriers to entry for emerging fund managers and for those targeting under-served areas of the market,” said Ken Cooper, managing director, venture solutions, British Business Bank.
Last week London-based Climate VC launched its impact-first investment strategy.
March footfall to UK retail destinations showed how tough it has been — and will continue to be — to get back to ‘normal’ post-pandemic. The latest figures from Ipsos Retail Performance on Tuesday showed footfall stays stubbornly down from 2019 levels, even though there are signs of improvement.
The figures are significant because they focus on the non-food area of which fashion is a massive part and they also look specifically at shoppers going into stores rather than just being in the general area.
Across the UK, footfall fell by 22.9% compared to 2019 in the non-food sector for the five weeks up to March 27.
Towns outperformed cities by 8.3% points as city centres continued to struggle, and the best performing region was Northern England where store visits were down by ’only’ 18.6%.
But on the plus side, the UK as a whole was up 9.9% month on month and cities rose 4% while towns were up 11%.
High streets remained over 23% down compared to 2019 but they were up 15.7% compared to February. Retail parks were down only around 15% compared to 2019 and were up 5% against February, while shopping centres were down nearly 24% on a three-year basis and up over 11% month on month.
Oliver Hillier, senior retail analyst at Ipsos Retail Performance, said: “Despite footfall still being down compared to 2019, the unseasonably warm weather had a positive impact on footfall across the UK, with footfall up compared to the previous month.
“However, concerns that the Chancellor’s Spring Statement didn’t go far enough to protect consumers against the rising cost of living will likely impact footfall levels throughout the spring, as many households look to cut back on non-essential items to cover increasing utility costs and the recent rise in council tax.”
Impact tech startup Again has secured £2.55m in pre-seed funding led by Eka Ventures.
London-based Again is building a decentralised network of automated, micro-cleaning facilities called CleanCell that will allow brands to reuse packaging using automation and robotics.
Again’s CleanCells gives its users data on packaging inventory and cost savings.
The pre-seed investment will be used to build Again’s CleanCell technology and launch three to five CleanCells in the UK later in the year.
Again claims its CleanCells use 76% less water, 90% less energy whilst being able to clean thousands of packaging each month. Its technology, Again says, also means that it costs the same as single-use packaging for smaller brands.
“Reusable packaging is the future but today it’s prohibitively expensive for brands. We’re in the early stages of building a circular economy and we see our role being the infrastructure that underpins the packaging aspect of this on a mass scale,” said Matt Kennedy, founder and CEO, Again.
“This can only be done with buy-in from across the value chain and we’re excited to be working in partnership with renowned brands.”
Additional investment in Again’s pre-seed round came from Maersk Growth.
The startup has partnered with Budweiser Brewing Group, Diageo (Johnnie Walker Black and Smirnoff) and Biffa to launch its pilot scheme.
Its partnership with Biffa will use an electric vehicle provided by Renault to collect waste bottles from Arsenal’s Emirates Stadium, Greene King, Clays and a group of London nightclubs.
Eka Ventures is a $95m early stage impact venture fund.
“Again’s focus on using the existing logistical infrastructure and using technology and data to make reusable packaging as simple and affordable as single-use is exactly the kind of company we look to back at Eka,” said Jon Coker, Eka Ventures.
The funding round is the latest sign of growing appetite among investors for climate tech startups.
Last week, impact venture fund Climate VC launched to invest in 120 UK-based early-stage climate startups in the next three years.
Other impact funds include Elbow Beach Capital’s £20m venture vehicle as well as SIS Venture’s Scottish Impact First fund.
The announcement of Again’s funding builds on a record year of investment for impact and climate tech startups. In 2021, UK impact tech startups raised £2bn, up from £1.7bn in 2020.
Premium marketplace Secret Sales has been gearing up for international expansion in recent periods and that expansion has now begun with the business launching in the Netherlands and Belgium as the first step in a wider European rollout. It also has plans to move into another 12 European countries in the next two years.
An initial 450 international and regional “hero brands” are partnering with the premium e-commerce platform to sell discounted inventory in a “brand-enhancing and profitable way”.
The secretsales.nl and secretsales.be webstores are “fully localised for the customer, featuring local languages and payment methods with no additional duties, as well as offering free delivery and 60 day in-country returns”.
Products are available at up to 70% off regular retail prices and brands and retailers digitally connect their supply chain and inventory systems to Secret Sales “to manage stock more efficiently throughout the year, reducing stock movements and costs, while increasing sales and driving greater margins”.
The company said that more than €700 million of inventory has gone live on both sites.
As well as the launches, the company has also closed its latest investment round “to further accelerate growth” in other European markets. It wants to become “the largest marketplace for discount fashion in Europe”.
CEO Chris Griffin — the entrepreneur who, along with Matt Purt, acquired the business two years ago — said the two new countries are “a natural fit for our first phase of expansion in Europe. Our marketplace is addressing universal challenges the retail industry faces and offers a long-term, clean and profitable solution. We are creating a new culture around non-full-price inventory.”
Secret Sales has grown fast in the UK as it offers the chance for fashion, beauty and homewares brands and retailers to clear surplus stock “in an upmarket environment, and helps introduce new customers to individual brands’ full price channels via a GDPR compliant opt-in”.
While managed from Britain, it’s building a local team within the Netherlands to work with brand and retail partners and customers in both new countries.
Digital bank Starling has been profitable for the past 18 months, the UK challenger bank’s CEO and founder Anne Boden has said.
Founded in 2014, the British digital bank broke even for the first time in October 2020. It has been profitable ever since, with Boden’s comments confirming that Starling is on course to post its first annual profit when it publishes its next accounts.
“We’ve been profitable for the past 18 months – we’ve grown and taken huge market share, but unlike some competitors, we’ve done that in a profitable way because we’ve focused on customers that actually generate income for us in the long term,” said Boden, speaking at the Innovate Finance Global Summit on Monday.
Starling becoming profitable is a sign that the UK’s fintech market is maturing.
This week, British challenger digital bank Zopa said it has become profitable 21 months after gaining its full UK banking licence in June 2020.
“Hitting profitability in just 21 months is a testament to our unique model that meets customer needs by focusing on how they borrow and save – the two things with the most impact on finances,” said Jaidev Janardana, CEO, Zopa.
Janardana added that it makes Zopa one of the fastest digital banks to achieve profitability after gaining its banking lisence.
Zopa Bank told UKTN it calculates profitability “the normal, default way of measuring profitability using the IFRS9 standard”.
Other digital challenger banks have struggled to convert customers into profits, with rivals Monzo and Revolut still loss making.
Boden said that other fintechs have grown accounts “but in the wrong sectors”, which has meant they have “needed to feed off more and more VC capital”.
Boden added that investors give limited time to demonstrate a business model and asked how long the VCs are willing to give.
According to Starling Bank, it currently has 3% of the retail market share and 7% of SME lending.
Starling Bank is reportedly on track for its public debut by 2023. Boden said that while the fintech sector has “given the big banks a run for their money”, she doesn’t see challenger banks gaining the dominant market share enjoyed by Google in search engines.
“Starling will grow until it has the market share of an HSBC or Lloyds,” Boden said.
Later this year Zopa will join the increasingly competitive BNPL market, which last month saw new player PollenPay launch and Openpay exit the UK market.
Last month Zopa Bank offered sponsorship of 50 work visas of eligible Ukrainian applicants already in the UK and in October became a unicorn in a £220m funding round.
This follows a bumper 2021 for UK fintech investment, with companies raising $11.6bn in capital.
Ted Baker announced on Monday that it has launched a formal sale process following additional interest after unsolicited bids from private equity group Sycamore Partners.
The news sent the company's shares over 14% higher on the London Stock Exchange and valued it at £271 million.
The company said it had rejected the first two offers that Sycamore made on the grounds that they undervalued the business. But it added that it has now received an “improved proposal” from the group and that since Sycamore originally emerged as being interested in buying the company, it has “also received other unsolicited third-party bid interest”.
The board stressed that it “believes the business is well positioned to create significant value for shareholders” — which could be interpreted both as applying to those shareholders who are the investors that own it as a listed company today, as well as a private equity group or other retailer that might own it in future.
And it said that it continues to make good progress with its transformation and that despite the impact of Omicron on Q4, it delivered sales growth of 35% along with a much better trading margin.
Its statement to the London Stock Exchange also explained its reasoning for the official sale process. “In view of the interest expressed by potential offerors, and having consulted its major shareholders, the board has decided to conduct an orderly process to establish whether there is a bidder prepared to offer a value that the board considers attractive relative to the standalone prospects of Ted Baker as a listed company,” it said.
It didn’t specify what that value might be and it's clear that if it doesn't achieve the right price, it's prepared to continue as an independent, listed business.
The firm has agreed various points with the UK Takeover Panel and one of them is that parties interested in making a proposal will not be required to be publicly identified.
Ted Baker added that it “intends to conduct a targeted process, focused on those parties who understand and value the full potential of this unique brand”. The first phase of the process is expected to be based on public information only and interested parties will be invited to submit non-binding indicative offers to its financial advisers, Evercore and Blackdown Partners.
The company hasn’t yet spoken to Sycamore about whether it wants to be part of this process.
London Technology Club (LTC) has launched a fund that aims to raise £30m to invest in promising fintech, AI and mobility startups.
This will be the third investment fund from the London Technology Club in the last three years and aims to inject its £30m into 20 to 25 investments over the next year.
The London-based investment company will be prioritising British, US, European and MENA-based startups.
Konstantin Sidorov, founder, chief executive and general partner at LTC, said: “The technology revolution of the 21st century has positively transformed the way we do business, shop, travel and receive healthcare, but for this rate of innovation to continue we must ensure that tech enterprises are backed with the growth capital they require.”
He added: “Our third fund will channel investment into the leading tech companies of tomorrow to enable them to reach their potential.
“The growth will generate long-term returns to investors, employment opportunities for the next generation, and the benefits of innovation to consumers, businesses and the community.”
LTC previously launched the Pledge Fund I, which ended up raising £17m and resulted in a capital return of 30% in under two years.
The investment club was founded in 2018 by Sidorov, an early investor in major tech successes like Spotify.
LTC was founded with the goal of creating an “investment community” by bringing together private investors, venture capital firms, institutional investors, and technology experts to provide both investments and education and industry networking opportunities.
Earlier this month, LTC launched an overseas investment hub in Dubai, with the aim of tapping into the growing opportunities in the Middle East and North African region.
Some of LTC’s previous partners include Barclays, IG Group and Petrolex.
The firm will be looking to capitalise on the UK’s thriving fintech sector, which raised just over £8.5bn in venture capital last year.
Up-for-sale UK health & beauty retail giant Boots is seeing its post-pandemic recovery taking shape, announcing sales jumped 15.2% in the quarter to 28 February, driven by a 22% lift in like-for-like sales.
It said the performance was underpinned by improving high street footfall, rocketing online sales and “particularly strong” demand in the beauty segment.
In the trading update, Boots said online sales leapt 60% ahead of pre-Covid levels in the quarter and accounted for 15% of the retailer’s sales overall. Store footfall also rose by 52% year-on-year with basket size up 15% on pre-Covid levels.
Sebastian James, managing director of Boots UK & Republic of Ireland, noted it was a “very exciting time” for the chain.
He added: “Boots continues to bounce back strongly from the pandemic and delivered another solid performance this quarter, with sustained retail and pharmacy sales growth and market share gains across all categories.
“Our strategic focus continues to be on transforming our beauty, healthcare and digital offerings and this quarter we made excellent progress – with strong take-up of our new and existing healthcare services while maintaining our leading position in the growing beauty category.”
Whether or not the positive trading performance will affect the price-tag/demand for the Walgreens Boots Alliance-owned business remains to be seen as the parent confirmed the “strategic review” of the UK health & beauty business is progressing, amid strong takeover interests in recent weeks.
It’s understood US private equity firms Apollo and Sycamore partners are among firms to have placed non-binding offers. The billionaire Asda-owning Issa brothers, who are backed by TDR Capital, are also in the running to buy Boots.
Bidders are expected to submit final offers for the business around Easter, with indicative offers so far valuing the chain above £6 billion.
Suitors are lining up to take over UK health & beauty retail giant Boots. According to the latest report, New York-based investment giant Apollo Global Management is now in the lead position with a £6bn takeover bid.
The report from Sky News follows weekend reports of a potential £7 billion sale for the Walgreens-owned business by both Apollo and US peer Sycamore Partners. They are understood to be competing against TDR Capital and the billionaire Issa brothers, owners of the Asda UK supermarket chain.
The sale of Boots was thrown into doubt in recent weeks after a consortium of Bain Capital and CVC Capital declined to submit a first-round bid.
However, city sources told The Sunday Times they are sceptical that Sycamore, which is also circling fashion chain Ted Baker, will make a firm offer for Boots.
That leaves Apollo Global as a strong contender with the investment giant understood to be talks with banks including Bank of America and Credit Suisse to provide debt funding, Sky News reports. Apollo has so far declined to comment,
Although Apollo is likely to be able to secure the required financing for a Boots bid, debt markets have become increasingly difficult since Russia's invasion of Ukraine last month, analysts noted.
A new round of bids for Boots, which trades from more than 2,000 stores and employs over 50,000 people, is expected early next month.