Novi is building a B2B marketplace for brands that care about sustainability
It’s that old chestnut: You are a fancy-pants brand wanting to make a product that makes you feel all warm and fuzzy inside because you only use fair-trade, sustainably grown ingredients and materials, but you don’t know where to turn. Next thing you know, Novi comes bursting through the wall holding a freshly squeezed pitcher of solutions to all your problems, newly backed by a $40 million bundle of checks from Tiger, Defy and Greylock.
Novi is a B2B marketplace for sustainable, innovative ingredients and packaging, helping its thousands of customers bring products to market with more sustainable materials. Essentially, Novi is taking a data-rich network of suppliers, manufacturers, retailers and brands, making it easier to formulate, discover, sample and purchase sustainable and innovative ingredients and packaging as they build new products. The idea is simple: If you make it easier for brands to make sustainable products, the excuse not to do so goes away, and hopefully we make the planet burn a little less brightly under the burden of our rampant consumerism.
“Early in my career, I joined the Air Force and I wanted to work on hard problems. I had this incredible career as a data scientist in the Air Force. And then I went on to build data teams for tech companies such as Eventbrite,” explains Kimberly Shenk, CEO and founder. “I got pregnant in 2017 and started to become very aware of the products I was using and the ingredients in my products. I got obsessed about learning about the toxicity to human health and to the environment. In 2017 I started a brand — NakedPoppy — to address this. I was leveraging all the passion I have for data science to build personal care products that are better for your health and the environment. I experienced firsthand all the difficulties in actually bringing a truly sustainable product to market.”
Schenk discovered that it was hard to find trusted materials and that for a small company without a huge, sophisticated supply chain analytics operation, it is hard to assess the materials. NakedPoppy started building a database to help capture its findings along the way, and in the process discovered that this could be the beginnings of the new company. Other brands started showing an interest, and Novi was born at the intersection of its founder’s interest in data and her personal experience of trying to build a sustainable brand.
Novi’s existence as a B2B marketplace is particularly interesting, given that we’ve seen a huge trend on that front evolving recently:
“At the most basic, we help brands find sustainable materials and build sustainable products. We are doing that as a B2B marketplace and so the data is that suppliers list their materials — things like ingredients or fragrances or packaging — and they give us a wealth of data,” explains Schenk. “As the trusted third party we assess the materials for different standards that they may care about so they can come and find materials that are trusted for their sustainability impact and then build a better product.”
The company collects its data in a few different ways. On the supply side of the business — such as chemical suppliers — there are a wealth of scientists, who are good at capturing data, but who don’t have a structured way of storing or distributing the data to interested parties. That’s where Novi comes in, digitizing and categorizing the information. The company also works with certification bodies to capture what is certified as biodegradable, vegan, fair trade and so forth. In addition, there are data sources for measuring and using data to ascertain how sustainable something is, so that gets hoovered into the company’s giant database as well.
“Pre-Novi, brands would spend weeks hunting down materials and interpreting disparate material documentation to determine if they met complex industry standards,” says Shenk. Novi collects, digests and digitizes all of this data, ensuring real-time accuracy against ever-changing standards and claims, which allow our users to make procurement decisions around sustainability more efficiently and with confidence.”
Of course, as with any data play, it’s a game of GIGO — garbage in, garbage out. It’s easy enough to slap a “sustainably grown” sticker on a pallet of wood and call it a day, and so far, there hasn’t been much incentive for brands to look much deeper than that. That’s one of the things Novi is eager to change.
“We guarantee the accuracy of our assessments, but if supplier falsifies data…,” Schenk says, claiming that it is actually pretty hard to falsify the data because of the amount of information associated with certifications. “That is not something that we can solve independently; there are of course certification bodies that certify responsibly sourced palm oil. They are going out and trying to make a change in how you certify something as meeting those standards. But as we start to elevate the suppliers are actually doing good and get them in front of brands who are really looking for better materials — that’s the shift that we’re starting to see change the industry.”
Novi doesn’t want to share exact numbers, but claims “thousands” of customers, working with brands like Croda, Grove Collaborative, Sephora, Target and many others.
Novi plans to deploy its new capital to build additional technology for both sides of the marketplace to comply with evolving sustainability claims, grow its selection of ingredients, fragrances and packaging, as well as expand into new verticals like home care and food — segments that Novi is already seeing organic traction in.