Why crowdfunding makes sense for organic companies

In recent years, several organic companies have raised funds for investments on crowdfunding platforms. This is not only financially interesting, but also from a marketing perspective.

For its plastic-free future, the producer BioVegan has collected more than half a million euros within 48 hours. The plan is to raise a total of one million euros in private loans via the crowdfunding platform Finnest.com. With the money, the producer BioVegan plans to change its production to plastic-free alternatives. They also want to intensify their cooperation with vanilla-farmers in Madagascar. The interest rate for the loan is determined by the private lenders and ranges between 2.75 and 7 percent; the most attractive offers are selected. The lenders can choose whether they want the interest to be paid out as money or in product vouchers.

BioVegan is already using the platform for the second time. In the last four years, there were 27 campaigns of companies of the German organic industry on Finnest.com alone. Voelkel raised 1.5 million euros for a new bottling plant, Bauck financed its new mill in part with swarm loans from Finnest. Organic companies can also be found on other platforms. For example on Startnext, several organic and zero-packaging shops have raised initial funds.

Fundraising with adverting effects

The average interest rate for the collected credits is around 5 percent. This is far more than would be due for a bank loan, but some start-ups don’t get as much as a look from banks. In addition, a well-done crowdfunding campaign has a considerable advertising effect.

According to Finnest.com founder Joerg Bartussek, a crowd funding campaign can help attract attention, similar to stock market entries. This contrasts with conventional financing, where often only the company and the respective finance institute are aware of the measure. He says that on the marketing side, loyalty programmes can provide an extra portion of customer loyalty, for example by allowing the investor to receive the interest in the form of company products – on particularly favourable terms, of course.

For Bartussek, the companies’ participation in crowd investing makes organic products more personal. In crowd funding, the customer is in the focus of the approach – and can even become an investor, i.e. a partner for positive development. In this way, emotional attachment and monetary interest are optimally linked.

Read also:

Sonnentor committed to a grandchildren-friendly Austria

The herbal specialist Sonnentor has initiated an association for the promotion of an Austrian environment suitable for grandchildren. This association is committed to agriculture free from pesticides and wants to support organic farmers whose crops have been contaminated by pesticide drift.

Oliver Gothe of Fair Squared: „Increasing digitalisation will determine the commerce of the future”

In the run-up to the Sustainable Cosmetics Summit, Oliver Gothe talked to organic-market.info about the chances brought by digitalisation as well as the challenge of dealing with greenwashing by competitors from the conventional market.

Sustainability bank Triodos invests in crowdfunding platform

Triodos, the Dutch sustainability bank, joins Crowdinvesting in Germany: Triodos Sustainable Finance Foundation acquired around 20% of the platform Bettervest.