Can you make a positive impact on the environment while also investing in companies? Well, this question has been in the minds of a number of people, and there is now an answer to this question in the real world.
Oneplanetcrowd is a sustainable crowdfunding platform based in Amsterdam. It is a sub-organisation of StartGreen Capital, an early stage investor and one of the largest fund managers in the Dutch clean tech segment. StartGreen Capital aims to realise sustainable solutions to societal challenges and its crowdfunding platform has been contributing to the development of a more sustainable or social world. Here is how Oneplanetcrowd grew to be an impactful scaleup in Europe.
Power of the crowd
While iPhone and iPod are always called the most successful consumer device ever, people closely following the tech also mention Pebble. Pebble debuted as the world’s first smartwatch and it did not have the backing of any major tech company, instead the company crowdfunded its way to success.
“With a target of only $100,000, this 2012 crowdfunding of Pebble on Kickstarter raised $10M and created a new, powerful way of financing innovation directly by the people,” says Maarten de Jong, co-founder and general manager of Oneplanetcrowd.
For De Jong, this crowdfunding event was also a democratisation of capital. StartGreen Capital, which has been funding many sustainable innovations through its funds, decided to set up an investment platform to support consumer investors looking to “directly invest in innovative entrepreneurs and renewable energy projects.”
Banks: Competition or Collaboration?
Crowdfunding platforms have played a crucial role in providing the necessary funding to support sustainable businesses and projects. They have stepped and supported projects that banks could not financially support.
“Opportunities to get financing from banks have become more limited and bank loans also have certain conditions and fees attached to them. Crowdfunding has become a popular alternative to bank financing over the past few years. Research shows that it is expected that SMEs financed by alternative financiers will surpass bank financing in 2023,” says De Jong.
“The biggest advantage about crowdfunding is the fact that companies not only receive the necessary financing, but they also gain exposure and the support of hundreds of committed investors who act as ambassadors and provide publicity and marketing value,” he adds.
For sustainable and social entrepreneurs, Oneplanetcrowd offers convertible loans and there is research indicating that SMEs financed by alternative financiers will surpass bank financing in 2023. By offering a customised solution to the needs of these sustainable businesses, crowdfunding is not just an alternative to bank loans but a better option as well.
While crowdfunding leads banks in the sustainable investing space, banks have also turned a corner by collaborating with platforms like Oneplanetcrowd. In Oneplanetcrowd’s case, the platform closely collaborates with Rabobank and ASN Bank and often finance projects together.
De Jong adds, “The advantage for the crowd when doing a co-financing with a bank is that the crowd can be sure the bank performed a thorough screening of the project, in addition to the screening we performed ourselves.”
However, when it comes to risky projects, banks often take a cautionary approach and crowdfunding thus proves to be the way to go. De Jong gives the examples of wind and solar parks, which often require citizen participation that banks cannot provide. According to him, this is where Oneplanetcrowd’s experience and track record for organising local crowdfund campaigns comes in handy, to ensure the requirements for local participation are met.
Banks have been ridiculed for the way they finance startups but the rise of crowdfunding platforms and the way banks are collaborating with them shows there is change. This change could pave way for more sustainable projects to get funded and support societal change.
Difficulty to build an investor base
When Oneplanetcrowd debuted, it had ten customers launch sustainable products and propositions for the crowd on its platform. These customers had to raise between €5,000 and €20,000 but only two of them reached the target. De Jong says they “immediately learned that it wasn’t that easy to build up an investor base.”
Today, Oneplanetcrowd easily funds an average of €1M per company with its investors. De Jong says the investment landscape has evolved to such an extent that they know “how to find and keep new investors.” However, the challenge is still there and that is mainly because of the competitive investment landscape.
Growth and milestones
Oneplanetcrowd has been so successful that it has amassed a loyal crowd of over 43,000 investors and has grown from four projects with a total of €225,000 in 2012 to 24 projects and more than €20M in 2022. In September, the scaleup announced that it crossed €100M milestone in capital raised.
It has helped some of the well-known names in the industry including VanMoof, Fairphone, and Seepje raise capital on its platform and these companies were responsible for helping Oneplanetcrowd reach the milestone.
At the time of writing, Oneplanetcrowd is helping to finance Nextkidney, an innovative medtech that provides a revolutionary solution for home dialysis treatment for kidney patients. Nextkidney has raised almost €2 million within two weeks.
For the team at Oneplanetcrowd, the next goal is simple: transform from a national crowdfunding platform to a European platform. To meet that goal, Oneplanetcrowd recently received the new European Crowdfunding Service Provider licence (ECSP) from the AFM, which gives it the status of being a professional investment platform.
“The ECSP allows us to provide services across the EU as a single market,” says De Jong. “This will increase the pool of potential investors for renewable energy projects, SMEs and scale-ups and ensure investors have a wider choice of projects and better protection.”
Dealing with energy crisis
Last month, Ard van de Kreeke, the founder of Growy, explained to Silicon Canals the challenge associated with raising funds for a sustainable tech startup. For De Jong, Oneplanetcrowd aims to be the solution to this challenge, starting with renewable energy.
“Renewable energy is more relevant than ever. To make the energy transition possible, we need a lot more clout. This is why we have been offering an increasing amount of solar, wind and bioenergy projects on our platform,” De Jong says.
Since solar, wind, and green gas projects are usually financed through loans, De Jong says a number of investors are looking to invest in renewable energy projects with fixed returns. He says their sustainable energy project loans come with a steady net average return of 5.5 per cent.
With a maturity between 1 and 15 years and moderate risk profile, these sustainable projects support repayment per quarter, half of full year. The highlight being that Oneplanetcrowd has not written off any energy project to date.
Modus Operandi, revenue, and funding
Oneplanetcrowd generates its revenue through different kinds of fees. The scaleup charges a servicing fee of 0.8 per cent per year on the outstanding principal from its investors for the management of their investments. De Jong says a number of investors are looking to invest in renewable energy projects with fixed returns.
In addition to the management fee, entrepreneurs also pay an assessment fee for the financial analysis carried out by Oneplanetcrowd. It also charges a publication fee when the project goes live on its platform and lastly, a success fee is charged when the target amount is reached.
In addition to revenue in the form of these fees, Oneplanetcrowd is also backed by investors such as Unknown Group, Oost NL, the European Investment Fund, and Coenraad de Vries and Laura Rooseboom of Start Green Capital. It also counts more than 250 of its crowd investors as shareholders. De Jong says they aim to raise €25M on its platform this year and is also rounding up a funding round to support its European expansion plans.
Oneplanetcrowd’s success comes on the back of a small team of 12 people who cooperate very closely with the team of StartGreen Capital, another 35 professionals De Jong says they also consider colleagues. “We are currently looking for an additional investment manager to reinforce our team,” De Jong says.
For Oneplanetcrowd, the direct competition comes from other large crowdfunding platforms but it challenges them by distinguishing itself “through the quality of the analysis of the projects, we offer on our platform.”
On Oneplanetcrowd, the platform only offers opportunities to crowdfund projects that contribute to one or more of the UN’s Sustainable Development Goals. Before launching a campaign, the platform makes a thorough assessment of the project and De Jong says only 5 per cent of the received propositions make it through the assessment process and result in a crowdfunding campaign.
This thorough assessment is done by professional investment managers and business analysts. Amidst the competition, De Jong says their crowd often praise the platform for its loan management and how they communicate with its investors on their portfolio companies.
Choosing the right sustainable crowdfunding platform
With ECSP having made it easier for investors to identify platforms of good quality, De Jong believes that finding sustainable investment opportunities has become easier than ever.
“When it comes to sustainability, the investor can check if the proposition has set clear KPIs in terms of the impact it promises to make as well as the reporting the platform requires,” he adds.
For entrepreneurs, founders, and SMEs, De Jong has simple advice. He wants them to look at how active is the investor base of a crowdfunding platform. Once that clarity is gained, he suggests focussing on “how much capital will come from the platform’s current investor base,” before he confirms that it is 70 per cent on average on Oneplanetcrowd.
He also says that investors can check if the project has set clear KPIs in terms of the impact as well as the reporting required by the platform. “It’s easy to claim sustainability, but when clear and measurable goals are set and reported upon, the investor can be sure there is no question of ‘greenwashing’,” says De Jong.