Who Gives a Crap raises $41.5 million in a milestone moment for impact investment

Eco-friendly toilet paper startup Who Gives a Crap has secured $41.5 million in its first ever round of funding, as chief executive Simon Griffiths strives to build a business making — and giving away — billions of dollars.

It’s a significant first raise for a startup that’s been bootstrapped for nine years, but it also proves increasing interest in impact startups, even from traditional investors, and paves the way for more to come. 

Launched back in 2012 by Griffiths and co-founders Jehan Ratnatunga and Danny Alexander, Who Gives a Crap first got off the ground after a successful crowdfunding campaign on Indiegogo — a campaign that saw Griffiths himself perched on a toilet for 50 hours, until the business hit its minimum target.

The startup has been bootstrapped ever since, only taking on some debt financing to manage working capital, Griffiths says. That debt has been repaid for some time, he adds.

In nine years, it has made more than $20 million in profits, and donated half of that to non-profit partners working on clean water and sanitation projects.

In the 2020 financial year, Who Gives a Crap donated a record $5.85 million, a boost of 750% on the previous year.

Speaking to SmartCompany, Griffith puts the massive uptick partly down to the bizarre panic-buying of toilet paper we saw early on in the COVID-19 pandemic (and occasionally throughout), as loo roll became “the hot commodity”.

In the 2021 financial year, profits dipped again, with Who Gives a Crap donating $2.5 million. It marked an stabilisation, he says, but there were also ongoing disruptions to supply chains — caused by the COVID-19 pandemic — that have made things tricky over the past 12 months.

Now it looks like the worst of the rollercoaster is over.

“We’re kind of back on a trajectory that’s a little bit more predictable and easier to forecast.”

This funding will be used to continue what Who Gives a Crap is already doing, but ramping up the pace.

“We’re really proud of what we’ve done,” Griffiths says.

“But where we really need to get to is billions of dollars of donations, if we’re going to help the 2 billion people who don’t have access to adequate sanitation.”

To get there, the focus will be on launching new products, expanding further in some of its newer markets, and hiring the people needed to make it happen.

The funding also gives Who Gives a Crap the balance sheet required to embark on some of the bigger projects in the pipeline, such as improving its environmental credentials, and getting to net-zero emissions.

For Griffiths, success comes down to the amount of impact created, he says. That means giving everyone in the world access to clean water and sanitation.

“To seriously put a dent in in that problem … means building a company making tens-of-billions of dollars in revenue.”

A star-studded investor list

The round was led by Brussels-based Verlinvest, whose executive director Raphael Thiolon is set to join the board of the startup.

London-based The Craftery and Jam Jar Investments also contributed.

Beyond that, the investor list reads as a who’s who of the Australian startup scene, including Mike Cannon-Brookes’ Grok Ventures, AirTree Ventures and impact fund Giant Leap.

Who Gives A Crap also secured contributions from high-profile individual investors including the likes of Adore Beauty founders Kate Morris and James Height; Culture Amp’s Didier Elzinga and Doug English; Canva co-founder Cameron Adams; former Unilever chief executive Paul Polman; and a handful of sports stars, who invested through Athletic Ventures.

While some of the investors — Giant Leap, in particular — have a clear MO of investing in impact startups, it’s certainly not a criteria point for all of them.

The first few years of Who Gives a Crap were about proving the theory and the business model, Griffiths says. Then, it was about growth and scaling, ramping up the donations into the millions.

Now the founders have proven not only to themselves and to consumers that the model works, they’ve managed to convince the capital markets, too.

“The idea of giving away half your profits was certainly not very cool, from a capitalist perspective, a decade ago,” Griffiths says.

“I think we’re been able to help shift the mindset on that,” he adds.

“This is hopefully a better, new way of thinking about capitalism that will influence what comes after us as well.”

A shift in capitalism?

On the face of it, gifting away half of your profits sounds like a hard sell to any investor who is, ultimately, looking for a return.

Yet we are seeing more and more investors focusing on businesses that tackle the big challenges facing the world.

Griffiths was also careful in choosing who he brought along on the journey.

There were three key criteria for investors. First, there had to be mission alignment, he explains.

Second, Griffiths was looking for “patient capital”, he says. This was always going to be a long-term investment.

“We’ve got a 30-year thesis that we’re executing against,” he says.

Finally, he was looking for deep expertise across operations, culture, consumer mindset and growth.

All of this — and the mission alignment point in particular —meant there were some investment discussions that quickly fizzled out.

But Who Gives A Crap is already a well-known brand with plenty of fans in the startup sector, and the fact it was able to attract such a significant amount of money from such a renowned group of investors speaks volumes, Griffiths says.

This wasn’t just a raise for impact-focused investors. It was a smart investment for anyone. That marks a changing of the tide, which will only create more avenues for growth for more impact-focused businesses, he adds.

“Probably the most exciting thing is just seeing this shift towards profit-for-purpose businesses becoming something that is really taken seriously by the private capital markets,” he says.

“That makes me super excited about, not just now in this moment that the world is in, but what the world is going to look like ten years from now as well.”

It appears Griffiths isn’t alone in feeling this way.

In a statement, Mike Cannon-Brookes called Who Gives a Crap “an impressive Aussie underdog story”.

“I hope other entrepreneurs are inspired by their story of building a profitable, fast-growing business that is also environmentally sustainable,” he added.