Index and Coatue invest $20m in sustainable packaging
Illustration: Gabriella Turrisi/Axios
Sourceful, a startup that helps e-commerce companies create sustainable packaging, raised $20 million in Series A funding led by Index Ventures.
Why it matters: As consumers become more educated around supply chain sustainability, Index's portfolio companies, which include consumer startups and large d-to-c companies, will need to rethink every aspect of their existing suppliers.
Driving the news: Sourceful raised the Series A to help e-commerce companies design more eco-friendly packaging, offering a first step in reducing companies' Scope 3 emissions in accordance with the proposed SEC rules.
- Index Ventures led the round after also leading its $12.2 million seed in September 2021. Coatue and Eka Ventures also participated in the most recent round.
- Sourceful CEO Wing Chan declined to disclose the round's valuation. Index Ventures partner Danny Rimer will retain his board seat from the seed round.
How it works: Sourceful uses a mix of publicly available and proprietary data to calculate emissions projections on individual packaging components.
- Its software lets companies design packaging virtually and see where they can reduce overall emissions. For example, a company can opt to forgo plastic wrapping inside a mailer or change to paper.
Context: If approved, the proposed SEC rules would require companies to track and report Scope 3 emissions. Companies have pushed back, arguing that doing so is a complex and inaccurate depiction of their overall emissions.
Yes, but: Chan maintains that whoever is making a product is responsible for its emissions, including those generated in its supply chain.
- Sourceful could take it one step further, Chan tells Axios, by allowing companies to make some changes that can reduce their emissions.
Our thought bubble: A majority of Scope 3 emissions come from products themselves, the manufacturing process and logistics networks. Changes to packaging may feel meaningful but end up being negligible in the grand scheme of things.