Leader in sustainable packaging for e-commerce brands hits its maximum raise target.
Minimum Funding Target: $500,000
Maximum Funding Target: $1,500,000
Amount Raised: $1,500,000
Total Investors: 745
Average Investment: $2,013
Overview
In May 2022, sustainable packaging company Hero Packaging successfully closed their first Equity Crowdfunding raise by reaching their maximum $1,500,000 within 1.5 weeks of launching to the public. This raise was another example of Equitise assisting a fast-growing disruptor in the e-commerce space, capitalising on its extensive network of retail and institutional investors.
What Is Hero Packaging?
Hero Packaging’s mission is simple - to help e-commerce businesses join the fight against single-use plastic packaging. With what started as identifying a problem for their previous online retail business, co-founders Vik and Anaita have grown Hero Packaging to a company that provides home-compostable mailers to their customer base of over 40,000, and have saved over 15,000,000 plastic mailers from entering the environment.
Their ‘HEROPACK’ packages are made partly from plants, and the remainder from certified home-compostable ingredients, which break down in a home compost bin in 90-120 days, a stark contrast to the 400 years it takes for plastic shipping mailers to biodegrade.
Having recently entered into the US and Canadian markets, the team is focused on building a ‘one-stop shop’ for online retailers, and have also introduced a range of business accessories such as printers, labels, tape, and hex wrap, which are all more sustainable than other products in the market.
With revenue up 200% this financial year, and the onboarding of marquee brands such as Beginning Boutique, GAP, and Banana Republic, Hero Packaging is spearheading a movement to remove plastic from packaging not only in Australia, but globally.
Why We Liked The Opportunity
Massive market opportunity with industry tailwinds
The rise in e-commerce has driven rapid growth for Hero Packaging, with revenue of $2.5m in FY21, up 200% from FY20. Australian governments, at both state and local levels, have various plans to implement curbside FOGO (food organic & garden organic) bins, At a local government level Hero Packaging is working to enable their compostable mailers to be disposed of in this way. This long-term trend gives online retailers even more justification to switch to home-compostable shipping mailers above and beyond consumer demand.
Sights set on international expansion
Currently, Hero is Australia’s leading retailer of home-compostable shipping mailers, however they have their sights firmly set on international markets. Having entered the North American market at the end of 2021 and nurturing over 600 customers in a short period of time, Hero is perfectly poised to be a disruptor in a market with an expected compound annual growth rate (CAGR) of 14% to 2025. The real opportunity for Hero Packaging is to leverage their existing North American customer base to rapidly scale operations and achieve a strong foothold in the US market within the next 6 months.
Experienced founders with a track record of building successful brands
Both Anaita and Vik are deeply experienced across e-commerce and digital marketing, having built and supported the growth of numerous companies. They have built a social media following of over 60,000 and a brand that is loved by customers and end-consumers alike. Their brand building experience is a key competitive strength that they will leverage as they expand.
Key Takeaways From the Raise
Strong community engagement is the key to success
A key contributor to Hero Packaging’s successful raise was its highly engaged audience driven by their recurring customers. This raise was an excellent example of the community-oriented benefits of equity crowdfunding, with passionate and loyal customers being able to join Hero’s journey as they expand their operations and reach key growth milestones. With investors spanning from institutional investors to those who just simply love what Hero stands for, the diverse array of those interested in the offer is a testament to their broad appeal and impressive traction to date.
Institutional Investors are increasingly looking to equity crowdfunding
This raise saw extensive institutional investor interest, and saw Equitise drawing on our large network of sophisticated and institutional investors. Several VC and PE growth funds met with the Hero Team, exploring potential investments with a few of these conversations still ongoing. By providing Hero Packaging with multiple funding options, Equitise continues to differentiate itself from other equity crowdfunding platforms. Equitise continues to advise the Hero Packaging team in ongoing conversations with investors.
Fairly valued, profitable e-commerce companies are still in demand with investors
Accelerated by the pandemic, the Australian e-commerce industry is on a rocket trajectory, having grown 57% YoY in 2021. Whilst the market has cooled from the highs of 2021, the hero packaging raise demonstrates that high growth, profitable and well fairly valued e-commerce businesses are still in demand from investors.
Mission-led branding continues to resonate well with investors
Recent studies by McKinsey have shown that approximately 70% of consumers are worried about the environmental impact of packaging and would pay more for greener alternatives. This was reflected in Hero’s raise, with investors being genuinely passionate about the mission-led purpose heralded by the Hero Packaging team. The team’s deep understanding about the materials, manufacturing process, along with their ongoing work with local government to support greater end of life options for their products, demonstrates that the team is truly committed to the company's mission in a time when investors need to be aware of ‘greenwashing’ with little substance.
Looking Ahead
With Hero Packaging currently having over 600 customers in North America, a fully operational North American website, and a new US-based warehouse full of stock ready to sell, it has been great to already see onboarding with powerhouse American brands such as GAP and Banana Republic. We are looking forward to continuing to work with the Hero Packaging team, and are excited to see their growth and expansion in the future.