Member Article

Green team investing for the future

Jonathan Gold, director at Rivers Capital Partners, looks at environmental concerns from a venture capital perspective.

There seems to be plenty of doom and gloom over the state of the environment in the press these days, but with good reason. Our world has limited resources, and the environment can’t adapt to the speed with which we’re altering it; so, it seems quite obvious that until we develop the world hopping technology of the movies, we’re going to need to take some serious responsibility for the abuse we subject our planet to.

However, for the majority, the pollution tainting the environment has not been eliminated, due in no small part to the fact that it is some of our most essential everyday activities that cause the most emissions. Travelling to work or school, heating our homes during the winter or the huge number of chemical processes used in providing household products. At Rivers Capital, we recognise these problems and the threats they pose for the future of the environment and for the generations following us. For a company that invests in the future, it wouldn’t do well for us to disregard it. So, we’ve seized the initiative and are setting an example for venture capital investment in environmentally friendly projects.

At Rivers Capital Partners we offer a different approach to venture capitalism; we focus on helping the entrepreneurs as individuals. The founders of Rivers Capital have all managed their own businesses, giving us a clear insight into the workings of a new company. We are based in Newcastle, but due to the experience and professionalism of the team, our environmental projects have implications for the rest of the UK, with the potential to reach internationally. Our five most prominent green projects are focussed specifically on addressing some of the problems of high-pollution industrial processes, and have already had notable effects on their respective fields.

Road transport accounts for a significant portion of air pollution in the UK and with 34 million vehicles on Britain’s roads, traffic emissions are major causes of such environmental damage as smog and carbon monoxide release. Some of River’s key investments aim to combat these problems, meaning the future for leisure road travel may not be as short as experts predict.

Hyperdrive Innovation, a recent investment develops cutting edge low-carbon vehicle technology, including range extenders for electrical vehicles, more efficient battery packs and even the conversion of military transports to hybrid technology – a huge fleet of vehicles that is often overlooked in the campaign for lower emissions. If, however, you don’t purchase one of Hyperdrive’s revolutionarily powered cars, you can still reduce your transportation carbon footprint with two other of Rivers Capital’s projects.

Drive Green Taxis is the only taxi service in the North East to boast an entire fleet of hybrid powered private hire cars; granting them outstanding fuel efficiency, a quieter and more relaxing journey and low emissions. If however, you are only going a short distance and you fancy taking the scenic route, ScratchBikes is providing the North East’s first bike rental scheme similar to those seen in London and Barcelona. With easy-to-use technology and less infrastructure, the company has made cycling a simpler and less expensive inner-city mode of transport.

Whilst these projects began in the North East, they are already causing a stir further afield. Following Rivers Capital investment, ScratchBikes has been extended to Oxford and the city of dreaming spires has embraced an easy bike rental scheme wholeheartedly; granting courage that the project will spread throughout the UK, ultimately having a significant effect on pollution in cities. Drive Green Taxis are proving to the world that private transport can be environmental and are changing the way taxi services are viewed. Similarly, with Rivers Capital’s help, Hyperdrive has grown and expanded after its acquisition of another green technology firm from the North East.

Of course, more action is needed to have a real effect on our output of emissions and so we invested in the Radfan, which tackles another of the largest energy guzzlers in Britain; central heating. The energy used in heating is by far the largest component of domestic energy use, contributing 66% of the total energy used in Britain’s homes; a report for the Department of Energy and Climate Change stated “To make serious inroads in cutting CO2 from housing, heating energy has to be part of any solution”. This is where HeatwaveUK, the producers of the innovative Radfan, step in.

The device is a simple yet ingenious solution to a fundamental problem with heating living space with a radiator – hot air rises. As a result, a huge proportion of the heat from a radiator travels straight up, collecting at the top of the room and inevitably being largely absorbed by the ceiling. As people in the room won’t feel the benefit of this lost heat, radiators are often cranked up much higher than would normally be required. The Radfan sits atop any household radiator and, using a curved hood and ultra-efficient low powered fans, it propels the heat into the centre of the room, allowing people to feel just as warm with a far lower setting on their radiator.

Emissions and global warming aren’t the only threat to the environment however. Many of the everyday cleaning products we use around the house contain chemicals and pollutants that are damaging to the ecosystems surrounding our homes. These harmful components are released to the environment when washed down the drain or through evaporation. Fortunately, the team at Home Scents, with Rivers Capital backing, are revolutionising the way people clean their homes. Using 100% natural ingredients, none of their household products contain the harmful petrochemicals or phosphates that so flood so many of the ‘big brand’ products.

Of course, we didn’t invest in these companies simply because we agreed with their environmental considerations – each one is an exciting and profitable business idea, and each has the potential to thrive both regionally and nationally. Our green projects are breaking the stereotype that in order to be environmental, they must lose something in either quality or profitability; these five revolutionary companies are thriving. With Rivers Capital providing financial backing from the Finance for Business North East Angel Fund and our professional guidance and expertise, the founders of Home Scents have gone on to win various awards, including Best Creative Business at the North East Woman Entrepreneur of the Year Award 2012, Drive Green have been able to expand their fleet and Scratch Bikes has spread around the country.

Environmental projects aren’t few in number, but unfortunately the commonly held belief that green companies cannot be as profitable as their less environmentally considerate competitors leads to many struggling to get off the ground. Hopefully, with Rivers Capital proving that green business really can be good business, more investors will follow our example and support those hoping to look after our planet, without being deterred by the false industry stereotypes about lack of profitability – after all, green is the colour of money!

This was posted in Bdaily's Members' News section by Rivers Capital Partners .