Grover, a Berlin-based startup that offers pay-as-you-go subscriptions for consumer tech, has just raised €37m in funding in a series A round this week. Founded in 2015, the company offers customers the possibility to rent products ranging from hoverboards to espresso machines in exchange for a monthly fee, thus affording them the ability to test and use them for as long as they want without having to purchase them. When a consumer decides to stop renting a given product, it becomes available for other subscribers to rent. Servicizing consumption in this manner—that is, selling the functionality of products, rather than the products themselves—is expected to help reduce waste, according to the European Commission.
As part of our big data analytics operations, AtomLeap has been tracking over 3,000 startups that are developing business models based on the principles of the circular economy, which promotes waste reduction, material efficiency, and recycling and upcycling. Grover is only one of the more than 250 German startups in our database that are working to promote alternative consumption models in order to reduce waste. This concentration of circular economy ventures makes Germany the country with the third highest number of such startups in the world, after the UK (393) and Sweden (282). Together, these three countries account for almost a third of the circular economy ventures in the world (see figure 1).
That said, innovating our consumption-based economy is no easy feat, nor is building business models around sharing, recycling, upcycling, and waste reduction. Corporations the world over have yet to solve the challenge of determining how to remain profitable while radically changing their offering from products to services. Naturally, startups are also struggling to accomplish this feat. For instance, in Grover’s case, the company endeavors to cover 50% of the cost of repairing goods that break while they are rented out. However, determining who bares the responsibility for breaking a product—and therefore who should pay to fix it—is likely to remain a challenge for the company going forward. If, for instance, a product breaks because of natural wear and tear, the Grover subscriber that is renting it at the time it breaks may be unwilling to pay to fix it. If, alternatively, a user breaks a product but Grover is unable to determine that fact, the company will be obliged to pay half of the cost of fixing it regardless.
Berlin, a circular economy innovation hub
A third of the German startups in our database that focus on the circular economy—that is, 74 companies—are based in Berlin. Driven by an increasing awareness about environmental issues, its innovation-based economy, and by financing options made available by the regional and the federal governments, the EU, and private investors, the German capital is at the forefront of circular economy initiatives at the moment.
Aside from Grover, a few interesting Berlin-based initiatives that AtomLeap has been tracking are:
Re:box—a design store that allows innovators to rent and re-use materials for prototyping.
Mundraub—a tree cadastral and map of municipal trees, the fruit of which residents can consume.
Foodsharing.de—the largest platform in the DACH (Germany, Austria, and Switzerland) countries aiming to prevent food waste.
GKR—a startup that sells modular plant arrangements to green buildings and for decoration.
Are you a startup team that, just like Grover, is looking to sustainable consumption and green technologies? Do you need help to grow your company and/ or commercialize your solution or product? Then look no further. Go ahead and contact the AtomLeap High-Tech Accelerator using the contact form on our website.