Giving packaging a 2nd (3rd, 4th...) life

Reath is accelerating the circular economy

Hello there,

Single-use packaging is a notorious waste, but it can be tricky for businesses to run reusable packaging schemes. Today’s startup is in the process of raising a seed round for its solution to help businesses like Marks & Spencer do just that.

Scroll down to read all about Reath. As usual, PreSeed Now members get much more detail about the company and its market. If you’re a free subscriber you can give it a go with a free trial below.

Meanwhile, congratulations to Matt and Alice at Entrepreneur First for raising a $158m Series C round to help them work with more promising founders at a really early stage, often before they‘ve even formed a startup. The very first company featured by PreSeed Now formed through EF, and hopefully there will be many more featured in this newsletter in the future.

Speaking of which, I’m building up a pipeline of great early-stage startups to feature here over the summer, so please get in touch to tell me all about your startup or one you think I’d love to hear more about.

— Martin

This issue is supported by Manchester Angels. Read more about them in our 21 June issue.

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💷 Now raising

A look at a UK startup currently raising a round…

Ecommerce aggregators have been around for a long time, but aisle 3 is doing things differently. Founders Thomas Vosper and James Valbuena, both experienced in the ecommerce world, have developed ‘Cloud Basket’ technology, which enables shoppers to buy from multiple unrelated retailers in one transaction, while earning cashback - all without ever leaving the aisle 3 site.

They’ve started by targeting the red-hot market for sneakers, and say they’ve attracted hundreds of registered shoppers since launch earlier this year. The startup is looking for around an extra £100,000 from ecommerce, fintech, or deep tech investors to close out their round, which they say already has US and European investors committed.

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Reath helps brands embrace a circular economy

Reath cofounders Emily Rogers (L) and Claire Rampen

When I was a little kid, I remember we gave our used milk bottles back to the milkman, and my parents would sometimes even return empty cider bottles to a local shop to be re-used. Returning packaging for reuse is far more pressing an issue than it was in the ‘80s, but somehow, we lost all sense of a circular economy for packaging in the ensuing years. 

It turns out that no matter how much today’s businesses might want to reuse their packaging, it’s incredibly difficult to achieve. Reath is a startup based in Edinburgh that wants to change this, and it’s already working with the likes of Marks & Spencer towards making reuse of packaging the norm rather than a novelty.

To get up and running with Reath, businesses need to attach a machine-readable tag (think RFID or a QR code) to their packaging, meaning that each individual piece of packaging has its own ID. The business needs to set up procedures to scan the packaging–either manually or automatically–throughout its lifespan.

From there, Reath’s software lets businesses understand how long it takes to get packaging back for reuse, how many times it’s been reused, and other data essential for running an efficient, circular system.

This is useful for making the most of any tax advantages from reusing packaging (thanks to simple, accurate reporting), is handy for managing product recalls, and also helps meet consumers’ expectations around sustainability from the brands they connect with.

Discovering the circular economy

As so many startups do, Reath started with a personal pain point. Co-founders Claire Rampen and Emily Rogers were frustrated by their limited options for reducing the amount of single-use packaging they consumed. And as they looked into the figures, they found that much of what they put out to be recycled actually ended up being incinerated - not exactly environmentally friendly. 

Rampen and Rogers both had experience in tech (Rogers in inventory management and data management, and Rampen in a bike-share startup and at Telefonica). Together they landed on reusable packaging as a startup idea worth exploring.

“We went out and interviewed over 100 businesses, we turned up at some of their doors and tried to look at their manufacturing processes, tried to really understand why they weren't reusing packaging - what the two main challenges were,” says Rampen. 

The pair discovered some common problems. Firstly, legislation for consumer goods ends up encouraging single-use products. For example, Rampen explains: “you're meant to stamp a batch code onto packaging, so that you can do a product recall if you ever find out that there's been a contamination.

“But one of the challenges is that packaging then has an indelible stamp on it that can never come off, which means that packaging is essentially single use, because you can’t then put it out on the market with a new batch code.”

Secondly, they found that managing a circular system is a challenge when you have limited understanding of where all the packaging is in the system and how long consumers tend to hold onto a product before sending it back. “Just ordering 100 new units from a supplier that were virgin-fresh was much easier and less complex than the circular economy,” says Rampen.

And finally taxation around packaging often encourages companies to prioritise a lower weight over durability, making reuse more difficult.

A graphic from Reath’s website

Reath was designed to address these challenges, because there are good reasons for businesses to take a circular economy approach seriously. Circular packaging systems can be a boon for brands whose consumers value environmentally friendly practices. But also, there’s an opportunity for cost savings, Rampen says.

“Often B2B packaging isn’t naturally more durable, and a lot of it’s going missing. So being able to track that and understand the circularity of it is really important. And then also to be able to reduce [businesses’] packaging tax burden. Right now companies pay for every tonne of packaging they put on the market, they pay a tax for that. If you can prove that you're then reusing that, it's a way that you can start to offset those taxes.”

Standing out as competition grows