Investments

HowGood Rates Product Sustainability, Sees $4.2M Series A

Investments for the week ending March 10 came in a bit under $1 billion. Not a bad haul, and one that keeps up a pace that outshines past weeks, when the tracker saw a bare-bones parade of barely triple-digit deals.

In the latest period, the $976 million logged was weighted toward B2B at 61 percent of fund flows. The biggest deal within the sector came as a series of institutional investors provided debt financing to Kabbage for $525 million. That funding will be slated for small business loans via securitization.

The next largest deal on the radar was BankMobile, which was sold by Customers Bancorp for $175 million. The deal is one that seeks to bring mobile banking to underbanked consumers and also, in terms of demographics, to millennials.

The United States again showed up as the most active region in activity, with 76 percent of the investments registered during the week.

HowGood Rates Product Sustainability, Sees $4.2M Series A

Contemporary movements within the food industry, such as the “clean-label” push, and regulatory changes from organizations like the Food and Drug Administration look for ways to redesign nutrition and ingredient labels on consumer goods as a way to increase transparency and grow consumer trust.

But that’s only part of it. Consumers are more interested than ever to know what’s in their food not only for health reasons but also as a means to understand the environmental and trade impacts of the products they buy.

Enter HowGood. Founded in 2007, the Brooklyn-based data startup assesses and ranks consumer products, companies, individual ingredients and chemicals used in the growing and production process for their environmental, health and trade impacts.

At the end of February, HowGood closed a $4.2 million Series A round of venture funding led by FirstMark Capital with participation from Contour Ventures, Humanity United and Serious Change LP, among others. The Series A brought the HowGood’s total funding to date to $6.2 million, including a $2 million seed round in 2014.

“Much of the information that we’re asking consumers to interpret is complex, especially around sustainability issues,” said Alexander Gillett, cofounder and CEO of HowGood. “Rather than asking consumers to understand, for example, the difference between free-range, pasture-raised, certified humane, etc., we make the process simple and doable even at the point of purchase.”

Consumers can access these ratings via HowGood’s website or mobile app. Some stores have even started carrying HowGood ratings’ signage, and for some products, consumers can scan the item’s barcode to access ratings on mobile.

As of now, Gillett said, HowGood has ranked over 200,000 individual products. The company spent a five-year period partnering with over 1,000 food industry experts — ranging from individual farmers to scientists to non-governmental organizations — as well as over 350 data partners to build out its ranking system.

Outside of the data partnerships, HowGood has a team of researchers for cases when data may not be available — as can be the case when assessing smaller growers. Additionally, HowGood assesses industry players based on their corporate history and consumer social responsibility index.

“The goal here,” said Gillett, “is to build the largest database of food data that has ever been compiled, to use the insight of the experts to debate the issues and create known positives and known negatives and quantify risk.”

HowGood plans to put the recent round of Series A funding to use in a number of ways, including building out its database with more product and company information as well as expanding its reach on a national level. Gillette noted that HowGood is in talks with several stores about coming on board.

HowGood will also continue to look at additional channels to get its data to sustainability-minded consumers.

“We want to create an entirely new layer of consumer data,” Gillett said, “and to build out the availability of this information across the country.”

While investors are keen on the startup’s growth, Gillett noted that HowGood routinely receives push-back from companies about their ratings.

“Sometimes, companies just disagree with us — and that’s going to be part of it. Especially with companies who don’t rate as well as they want to and feel passionate about what they’re doing,” Gillett said. “The reality is that we have to evaluate them against the entire food ecosystem. Not everyone is going to be delighted with their score. But it gives them an opportunity to improve.”

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