Sustainable Industry

Accelerators play a key role in the development of green startups

ESG wave has boosted the importance of greentchs and consultancies, which play an important role in ensuring access to investments, training and more

Reconciling production and sustainability has been one of the main goals of the industrial sector in recent years. Thus, the industrial sector has increasingly sought partnerships with green startups – also called greentechs – with a focus on technology and innovation that aim to develop and improve a business model based on innovative ideas. Today, the green side of such companies is vital for the sustainable development of the industrial sector. In Brazil, there are now 102 of them according to the Brazilian Association of Startups, and they provide solutions for waste management, reverse logistics, projects to reduce carbon emissions, effluent treatment, etc.

According to a report by Allied Market Research , the global green technology and sustainability market was valued at $10.32 billion in 2020, and is expected to reach $74.64 billion by 2030.

Given this backdrop, impact startup accelerators have taken on an important role in creating the enabling conditions for entrepreneurship. Accelerators support startups in their growth journey at their various stages, such as the growth and scale phase, management, processes, financial management, trade structure, personnel structure, scale model, etc.

Connection – With a focus on helping startups for ten years now, Inovativa de Impacto is a startup acceleration and connection hub managed by the Ministry of the Economy in collaboration with the Brazilian Micro and Small Business Support Service (Sebrae), and ran the CERTI Foundation.

It is a global program that covers everything from training to acceleration initiatives for businesses that have already started and are at a slightly more advanced stage. According to the program’s coordinator, Ana Hoffman, Inovativa de Impacto selects those startups that  go beyond profits generation and aim to drive some social or environmental transformation and are concerned with measuring and scaling up these solutions and their impact.

The acceleration program spans a four-month period and offers education, collective and individual mentoring and training. Every year, 80 impact startups are selected – 40 per cycle. By the end of each cycle, startups participate in the “Experience” event, where entrepreneurs present their ideas to investor committees.

In 2018, Yattó participated in Inovativa de Impacto’s acceleration program. The company was created within the Federal University of Minas Gerais (UFMG) in 2014, as part of a scientific initiation project initially aimed at developing sensors for thrash bins, and which evolved to become a waste collection software. It has become a base technology for collectors across the country. Today, it provides consulting and advisory services in reverse logistics and circular economy.

According to the CEO of Yattó, Luiz Grilo, acceleration played a major role in the startup: “We were 19-year-olds with no market background and no experience as entrepreneurs. The acceleration gave us the market exposure that we did not have, and this sped things up and gave a direction to our business”.

According to Luiz Grilo, today more than 10 thousand tons of waste is recycled, more than 500 cities are served by the Yattó network, more than 400 environmental agents have been impacted and BRL 10 million in waste revenues are generated.

Know-how – “The ESG wave brought the need for more perspectives on problems that are solved by greentchs and, particularly in Brazil, we are witnessing growth potential. There are now funds that focus solely on greentchs. As a country, we have the vocation to play a leading role in this domain. We have the potential to become the capital of greentch,” said João Ceridono, partnerships coordinator at the Quintessa impact accelerator.

Founded in 2009, Quintessa focuses on solving social and environmental issues for businesses. It has a program to provide direct assistance to startups. Since 2017, it has been partnering with large companies, institutes and foundations, which offer open innovation programs to connect with startup solutions.

“We provide a know-how service to startups and we see that it makes a huge difference. We act as an interface between teams of entrepreneurs that are developing as a business and the specific universe of startups. It is a consultancy service that generates huge value for startups to be able to grow and raise the necessary investments and thus engage with large companies,” said João Ceridono.

As many as 250 green startups have benefited from the Quintessa acceleration program so far. These include Boomera, a startup that developed the CircularPack methodology, which transforms waste into a product line through technology, design and partnerships with waste picker cooperatives. Thanks to the program, Boomera’s revenues reported a six-fold increase and now offers a comprehensive solution for solid waste management.

“This advisory ensured that the inputs and insights from the mentoring process were increasingly customized, making everything much more productive and assertive,” said the CEO and founder of Boomera, Guilherme Brammer.

“We were able to bring the complex waste recovery business closer and closer to people’s lives and make the concept of circular engineering a given so that we can write a much more promising and sustainable future today,” he said.

Investments – In addition to the know-how offered through mentoring and assistance in managing a business, the accelerators can also provide support in relation to capital investment for the development of a project. Amaz, also an impact accelerator, works with this type of support, in addition to mentoring and monitoring startups.

Amaz emerged from the Partners of the Amazon Acceleration Program (PPA), and is coordinated by the Institute for Conservation and Sustainable Development of the Amazon (Idesam). It relies on a BRL 25 million blended finance fund for investment in impact businesses over the next five years. It is the first acceleration program that focuses exclusively on the Amazon region.

“Amaz accelerates and invests in impact projects that are seeking and generating innovative solutions to the environmental issues facing the Amazon. As part of this pressing need for Amazon conservation, we believe that these innovative businesses can be a solution to achieve a new level of development for the region,” said Ana Bastida, investment and acceleration manager at Amaz.

The accelerator targets medium and small businesses that are already developing their product or service in the market and generating revenue. It aims to run five acceleration cycles with six startups in each cycle, in a total of 30 accelerated startups by the end of five years.

During the first six months, startups will undergo an intensive process where they receive a contribution of BRL 200,000. They will participate in training sessions, will receive customized legal, accounting and branding advice, in addition to participating in experience exchange rounds with other companies and specialists. Once this is complete, startups can raise more than BRL 400,000, in a total potential investment of BRL 600,000. The program runs for 5-10 years.

“I believe that accelerators play an important role in catalyzing the process, both to ensure access to investment capital and access to training so that these businesses can set up a management and governance structure and thus improve. They also play the important role of connecting these businesses with each other and with the relevant actors in the ecosystem. Accelerators are an important interface between entrepreneurs and actors in the ecosystem,” said Ana Bastida.

As a startup that works on the regeneration of the Amazon by deploying agroforests in degraded areas, Florestas S.A. is participating in Amaz’ current cycle of acceleration. This startup has also set out to improve the income of small producers while keeping the forest standing.

According to the CEO of Florestas S.A., Thiago Campos, “the Amaz consultancy brought new connections and new perspectives that have accelerated primarily our impact. We already had an interesting financial model, but we expanded our impact projections even further.”

By 2030, Florestas S.A. aims to recover 800 hectares of degraded areas, generate direct income and a sense of professional fulfillment for 80 producers, fix 80 thousand tons of carbon and protect and recover 4 thousand hectares of legal reserves.