Dutch social company Fairphone, which makes modular consumer electronics and claims to be more sustainable and ethical, has secured some funding to continue developing a smartphone company focused on the circular economy.
The €49 million (~$53 million) investment in “growth capital” from an international consortium of impact investors led by new shareholders Invest-NL, ABN AMRO Sustainable Impact Fund and existing investor Quadia, its Regenero Impact Fund, which is more than the startup has raised since its inception in 2010. (Fairphone has already raised $40.7 million through Crunchbase — spanning nine rounds of funding, using a variety of sources from crowdfunding to venture capital and debt).
Other existing Fairphone investors, DALHAP, DOEN Parceived and PDENH also participated in the new capital raise, while other investors, including PYMWYMIC and over 1,000 crowdfunders, exited at the time. While Fairphone said it will use some of the new funds to pay off some existing debt.
But the main investment question is growth.
The European startup is well-positioned to capitalize on the opportunities presented by the bloc’s push for a green transition, fostering a shift to circular business models, with a key goal of making the European Union carbon neutral by 2050.
EU regulators also consider the “right to repair” a priority for mobile devices and other consumer choices, a future requirement that Fariphone is already meeting thanks to its modular and repairable devices, putting it way ahead of the industry (waste generation).
Fairphone said the new funding will be used to strengthen its brand positioning and create greater awareness of fairness and sustainability in the electronics industry.
In addition, the company aims to accelerate the integration of fair and recycled materials into its product portfolio, for example by expanding its “value chain” mining programs in Africa and South America and fair wage programs in Asia.
It will also devote resources to product development and better customer service, including further extending the life of devices.
Fairphone recently launched its own brand of wireless headphones, which contain recycled plastic, Fairtrade gold in the supply chain, and longer battery life compared to competing products. We know that the company is also working on releasing its own-brand modular, repairable in-ear headphones.
Eva Gouwens, CEO of Fairphone, commented on the investment in a statement: “Fairphone has transformed in recent years from a social movement to an impactful, mission-driven company. Thanks to all the shareholders who have supported us over the years. With a growing number of targeted investors, we will continue to raise awareness of fairer electronics and accelerate the growth and impact of our business.”
We’ve asked Fairphone for the latest sales numbers and will update this report with any response.
Update: Fairphone CFO Noud Tillemans said the company sold about 120,000 devices last year, up from 88,000 in 2021 and 23,000 in 2018.
“That’s more equity than we’ve ever raised in total,” he confirmed. “The 49 million euros is pure capital. Part will be used to pay off existing loans. I can only report that most of it is used for growth. Some of the early shareholders who invested 5 or 10 years ago were eager to get out.”
“We are delighted to support Fairphone’s growth ambitions as a true circular beacon within the electronics industry,” added Elisabeth Storm de Grave, director of Fairphone’s new investor Invest-NL, in another statement of support. “Fairphone is setting new standards for the entire industry with its unparalleled approach to developing ethical products with respect for people and the environment. Together, we are revolutionizing a short-term mindset the world can no longer afford and creating a sustainable future that works for everyone involved.’”
While Hanna Zwietering of ABN AMRO’s Sustainable Impact Fund pointed to a “growing trend towards conscious consumer behavior” and praised Fairphone as a “leader in the sustainable electronics industry”, she said the company has “proven it can make progress in the field of high-quality, modular and honest products.” Smartphones in the Most Competitive Markets”.
In a third statement of support, Josep Segarra, Senior Investment Manager at Quadia, added: “We are delighted to continue to support Fairphone through this significant investment, along with new co-investors aligned with their mission. Fairphone fits perfectly with our vision of the sustainable electronics industry, where we already support companies in the refurbished smartphone and home appliance segments. We look forward to further enhancing the company’s uniqueness and aim to accelerate Fairphone’s growth, create value for all stakeholders and ensure its long-term mission.”
Source: La Neta Neta
Jason Jack is an experienced technology journalist and author at The Nation View. With a background in computer science and engineering, he has a deep understanding of the latest technology trends and developments. He writes about a wide range of technology topics, including artificial intelligence, machine learning, software development, and cybersecurity.