Sourceful, the all-in-one platform for sustainable sourcing, has secured a $20 million Series A funding round led by Index Ventures, backers of Deliveroo, Dropbox and Just Eat. Founded in 2020, Sourceful works with brands across the globe to shrink their environmental impact by helping them find, create and deliver products that are better for their business and the planet. Coatue and Eka Ventures also participated in the round.
Today, supply chains are both holding businesses back and weighing the planet down. Consumer industries represent three of the top four most-polluting sectors, accounting for around 35% of global emissions. Approximately 83% of those emissions come from their supply chains. Ecommerce packaging in particular has a worsening environmental impact as online sales grow by 15% annually, with little visibility or data available on its production and source material footprint.
By starting with packaging, the most ubiquitous challenge, Sourceful’s platform allows businesses to find products within a marketplace of vetted suppliers across the UK and Asia. The platform also enables businesses to seamlessly create products to match their unique business needs, with real-time data helping customers understand the price point and carbon footprint of each unit or order based on design variations.
Sourceful achieves this through its Life Cycle Assessment (LCA) methodology, which is verified to the leading global standards (International Organization for Standardization) for estimating environmental impacts.
Sourceful’s ISO verified carbon footprint estimation approach analyses the product choices its clients make, through every level of the supply chain, including the extraction of raw materials, manufacturing of products and transportation, which are often hidden to businesses and consumers. The technology provides a solution to businesses who continue to be exposed to risk, either by not being able to verify the sustainability claims of their suppliers, or by having no visibility over large stretches of their supply chain.
The global supply chain technology market is estimated to grow from $25 billion today to $100 billion by 2030, with fragilities during the pandemic highlighting opportunities to modernise the industry, while demand continues to increase among businesses and consumers for sustainable options and environmental transparency.
Sourceful’s CEO and co-founder, Wing Chan, said:
“Pressure is mounting on businesses to reduce their emissions, due to the environmental urgency, increasing consumer demand, and the growing regulatory burdens around climate disclosure.
“Companies want to offer consumers sustainable choices, but they don’t have the tools to find affordable alternatives to improve their supply chain, which remains one of the biggest drivers of businesses’ emissions. And businesses are still unable to accurately measure the total carbon footprint of their supply chain, despite it being responsible for more than 90% of companies’ emissions across the globe.
“We often hear about the ‘green premium’ making emission reductions unaffordable at scale, but we’ve seen the inverse with packaging. Presented with better choices, reducing footprint can also reduce cost.”
Sourceful will use the Series A investment to continue its expansion into international markets, with business presence in Europe, Asia, and the US, alongside doubling the size of its 65-strong team within the next two years. The raise will also enable Sourceful to develop four new product categories, including integrating lifecycle assessments for plastics into the platform.
Danny Rimer, partner at lead investor Index Ventures, said:
“Supply chains represent one of the world’s biggest sustainability roadblocks, but they also contain one of our biggest opportunities to reduce global emissions.
“Sourceful is spearheading the effort to reduce the carbon footprint of supply chains, with the expertise, data and AI to give businesses the choices and the transparency they never had.
“Following Sourceful’s recent ISO verification, we believe the brand can go truly global and work with the world’s biggest businesses, to help build tomorrow’s sustainable world economy.”
David Cahn, partner at tech investor Coatue Management, said:
“We share Sourceful’s belief that the power of data and software can be leveraged to enable businesses to improve the sustainability of their supply chains. With better technology, companies can make better decisions and more accurate commitments to consumers.”
Ellen Meijer, life cycle assessment consultant at PRé Sustainability, who chaired the ISO panel that verified Sourceful’s methodology, added:
“PRé was happy to be involved in the critical review of Sourceful’s LCA methodology. We support their aim to make LCA results available to support decision making, and the methodology used to generate these results is critical for the reliable assessment of global warming potential.”