Hazaar! It's the emerging ESG startups trend
Hazaar! It's the emerging ESG startups trend
This marketplace has hit on a better way to grow in 2023
Hello there,
If there’s a trend in early-stage startups that isn’t getting much attention yet, it’s companies looking to support the Environmental, Social and Governance (ESG) requirements of businesses.
From cloud computing optimisation dashboards to specialist reporting tools, founders are preempting emerging legislation that will leave businesses looking for ways to make their sustainability requirement easier to manage.
Today’s startup started as a more conventional buy-and-sell marketplace but has hit upon a business model targeting the university sector as interest in ESG grows. Scroll down to learn all about Hazaar.
Judging by the number of startups I’ve talked with, or heard about, which have other ESG-focused ideas recently, this won’t be the only startup we’ll cover in this space this year.
– Martin
Can Hazaar make universities greener?
The Facebook story began with a student launching a service for other students, which evolved into something bigger.
While Hazaar is certainly not Facebook, there are some similarities in the story here. In a short time, it’s evolved from a student-focused buy-and-sell marketplace into an offering to help universities achieve their sustainability goals.
Founder and CEO Harriet Noy describes Manchester-based Hazaar as “a circular economy solution for universities”.
Beyond commission
The initial offering was an app that allows students to sell items they no longer need, and then meet in person to hand over the goods. By eliminating postage, it cuts wasteful packaging and travel from the purchase.
But while the app is still very much the front-facing part of the startup’s offer, the business model has become more of a B2B offering to the universities themselves. Noy explains:
“When we started, I was looking at the likes of Depop and eBay, and I built my business model based off those companies that I knew - a 10% commission. And that's the model that we had up until actually fairly recently. We realised that the 10% commission is a great model at scale, but we would need millions and millions of pounds of investment even for that to turn into a good business model.
“We had a lot of universities approaching us, saying ‘we really want your app, can you launch with us?’ And I was saying ‘no’, because we couldn’t afford to launch there. And I thought, ‘wait, why am I saying no when we provide universities with so much value?’
“All universities currently are up against very ambitious net-zero targets, and most of them are working towards certain certificates and awards within their sustainability departments, so they're looking for new ways to reduce their carbon emissions.”
So now Hazaar is launching a monthly fee to universities to offer the service to their students and staff. In addition, they get a monthly pop-up market where students can come together to buy and sell in person, with payments taken through the app.
Hazaar also helps solve the problem of students leaving perfectly reusable items in their university accommodation when they move out. Universities need to clear the accommodation for the next tenant, and don’t have an easy way of putting the left behind items back into use.
Hazaar can offer end-of-year drop off points for students to ditch unwanted items, which are then sold at on-campus markets and via the app at the start of the new academic year.
Per Hazaar, a trial with the University of Birmingham saw 3,400 items collected, 1,500 items resold, 45 tonnes of CO2 saved, a total of £19,000 in student savings version buying new, and 312kg of clothing and bedding donated to charity.
Making sense of university sustainability
All of this is fine, but it needs to be easily reportable to really make sustainability managers’ ears prick up. So Noy says Hazaar is working with the University of Birmingham–which prides itself in being ahead on carbon accounting matters–to develop carbon prices for each category of item sold through Hazaar.
This will allow the startup to offer regular reports showing a university’s carbon saving and other relevant metrics such as the number of items diverted from landfill. This data can feed directly into sustainability reporting and acts as good marketing to climate-conscious prospective students.
Noy also sees Hazaar as a way of eliminating the inconvenience from doing the right thing for the environment by bringing recycling to the heart of campus, while feeding the fast gratification of modern ecommerce due to the in-person exchanges. The app suggests safe places to these handovers, in case you had any concerns there.
There’s an opportunity to work with private student accommodation providers, too. Noy says. Operators of large private accommodation blocks have the same problem with finding ways to clear reusable items left behind by departing students. Hazaar is exploring a partnership with one such provider, which would expand its customer base beyond universities.
Early numbers
It’s early days, but Hazaar is beginning to pick up usage. The app launched at the start of the current academic year in Birmingham, Manchester, and Leeds. Noy says as of the start of this month, the app had 9,000 registered users, around 3,500 listings on the app, and about 1,000 transactions with an average value of £19.
“All of that growth has been based on word of mouth marketing, because we haven't had the budget to play around with paid social or anything like that. I think the opportunity there is absolutely huge. Once we have a bit more money behind us.”
The classic ‘test it on Facebook’ move
Hazar is a natural evolution from Noy’s time as an Economics student at the University of Birmingham, during which she co-founded a plastic-free society. She says this led to her acting as a ‘middleman’ between students and staff to encourage more sustainability-focused activity.
Noticing that students often need items like textbooks and event costumes that previous years’ cohorts have already bought and no longer need, she launched the first version of Hazaar on Facebook Marketplace in 2020. After she put posters up around campus, the page grew to 2,000 members “overnight”, and 4,500 members in a few weeks.
The idea quickly spread. Noy says interest from students around the UK led Hazaar expanding to around 30 pages for different universities on Facebook Marketplace.
From there, Hazaar grew with Noy as sole founder into a team of six today (two full-time, four part-time). Each city the app is active in has a student who is a ‘head of Hazaar’, along with a number of student ambassadors. This is similar to how services like Yelp have developed their presence in new cities over the years.
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