Knowledge

Why we invested in Faircado

WHY WE INVESTED IN FAIRCADO: THE STARTUP REVOLUTIONISING ONLINE SHOPPING WITH AUTOMATIC SECOND- LIFE ALTERNATIVES. 

Its AI-powered browser extension makes sustainable choices more accessible and mainstream for millions of consumers. 

The fashion industry is a colossal energy consumer, outpacing aviation and shipping combined to contribute to 10% of global emissions. By 2030, these emissions are projected to surge by 50%. As the demand for new products continues to soar, waste remains a significant issue: 92 million tonnes of clothes end up in landfill each year, equivalent to a dumper truckload every second.

While consumers’ desire for new items drives this environmental cost, our closets overflow with items we no longer need but that others could use. Embracing a circular economy can break this ineffective cycle. Our investment in Faircado is based on its ability to rewrite the rules of consumption, bringing unused items back into circulation to reduce emissions and ease the strain on natural resources. 

A streamlined approach to resale markets

Faircado is a trailblazing AI-powered second life shopping assistant that functions as a browser extension to help consumers automatically find pre-owned alternatives when shopping online. Since 2022, Evoléna de Wilde d’Estmael, Ali Nezamolmaleki, and the team at Faircado have been dedicated to addressing consumer demand for convenient, eco-friendly shopping solutions, promoting the purchase of pre-owned items to position re-commerce at the forefront of e-commerce’s sustainable future. 

While Faircado targets multiple sectors such as fashion, personal electronics, books, furniture, and jewellery, its potential for reducing emissions initially focuses on the fashion industry, one of the highest emitters. Second-hand fashion can extend the lifetime of a garment by at least 1,7x, with circular fashion eliminating at least 67% of emissions related to primary production. Moreover, increased sustainable consumer behaviour could account for up to 21% of emissions reduction until 2030 accounting for at least 218.61Mt CO2e of the 1,041 Mt CO2e.

Resale giants such as Vinted, Vestiaire Collective and eBay have long served as go-to platforms for finding pre-loved items, and have seen significant success: In 2020, Depop’s new users increased by 163%, with traffic growing by 200% and sales by 300%. Similarly, Vinted reported a 61% rise in sales last year to around $643 million. This surge in consumer-to-consumer redistribution models indicates an increasing demand for sustainable markets, particularly among younger generations. 

But the resale market is a maze, requiring users to navigate multiple platforms. Faircado addresses this challenge by streamlining the process, automatically finding second hand goods for online shoppers wherever they go. 

AI precision and consumer convenience

Faircado's in-house, AI image-matching algorithms gather key information such as product images, titles, and brands to provide users with tailored resale recommendations. Currently, Faircado’s extension supports over 1,600 websites, including Amazon, Zalando, Patagonia and Apple, offering consumers like-for-like items across fashion, electronics, and books. By using advanced AI, Faircado transforms a fragmented market into an efficient one, precision-matching items to bring specific alternatives to consumers, with the potential to move significantly larger volumes of products. 

Faircado’s innovative business model also holds the power to change consumer behaviour. As we’ve seen with Ecosia and Adblock, while people may express a willingness to adopt new online practices, breaking ingrained habits remains the first major hurdle. Take the fashion industry as an example again, where Gen Z’s preference for sustainable products is often eroded by factors such as cost and convenience. Faircado addresses this directly: its Chrome extension empowers users to convert from primary retailers to second-hand marketplaces, making one single change to permanently reshape habits. 

Faircado currently draws from a database of over 60 million products from 50 partners including eBay, Back Market, Grailed, Rebuy, and Vestiaire Collective. It is in the unique position of enabling customers to switch to those platforms without competing directly. Faircado therefore holds the potential to aggregate most  pre-owned marketplaces in an easy-to-access database, reaching billions of shoppers online. 

Accelerating the circular economy 

There are challenges to overcome before onboarding the global online population.  We are proud to lead Faircado’s latest €3 million funding round, joining a strong consortium of climate tech and strategic investors, including Accel, General Catalyst, Lightspeed Venture Partners, NEA, and Northzone via the Slush 100 Startup Prize, as well as Impact Shakers. Our immediate focus will be supporting  Faircado's team as their sparring partners, offering insights into mass-market consumer tech, circular economy principles, and scaling strategies. We’ll support the development of Faircado’s AI technology to ensure perfect item matching in a growing database of used items across multiple sectors. 

The other anticipated major hurdle will be distribution, and increasing awareness to drive user adoption of the extension. Leveraging our success with Ecosia and AdBlock, we’ll collaborate closely with the Faircado team to develop a distribution strategy and bring it to concrete execution. 

The EU’s push for a circular economy is gaining momentum, with recent policy calling for all EU Member States to recycle at least 60% of their municipal waste by 2030. Faircado will play a pivotal role in driving this shift, incentivising consumers and sellers to embrace sustainable consumption principles on a massive scale. We’re thrilled to throw our weight behind this exceptional team of innovators and the significant impact they’re making to promote a regenerative world. 

To find out more, please contact: 

Tim Schumacher

General Partner

tim@worldfund.vc

Tim Schumacher, World Fund

Managing Partner

tim@worldfund.vc

June 19, 2024

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