Invest in Waste Posthaste!

09.20.11

A big highlight of this September for Substance was the SOCAP Conference. At SOCAP there were social entrepreneurs pitching for funding to scale their ideas and investors looking for the next best business to fund that would provide not only financial returns, but meaningful social impact as well. The event’s tagline, money + meaning, is a concept that has been around for a long time but is now starting to reach a critical mass—even notoriety in the Economist.

I love this. The idea that businesses might actually provide what we need—clean water, air, or energy—and investors would deploy capital to said businesses, that is a novel concept. For anyone that has ever put together a portfolio for fun or played in a fantasy league, this post is for you. I have often dreamed of having the money to invest in my favorite social enterprises and here it is; The Substance I (Fantasy) Fund focused on waste. Why waste? Waste is abundant, it’s everywhere and the cost of goods sold – $0 (sometimes). The market for waste to energy is also projected to grow significantly in coming years.

Here are some prospects I would draft to the Substance I (Fantasy) Fund:

• AdaptiveARC – Great Scott! Roads? Where we’re going we don’t need roads… Yep AdaptiveARC is turning garbage (organic waste) into power through “Cool Plasma” Gasification. They don’t claim to be the first to attempt gasification, but according to a deck from the end of 2009, they projected $8M in revenue and 33% operating income margins (seems to good to be true).
• Eco Scraps – according to the Eco Scraps web site, Americans toss 30 million tons of food waste a year. These scrappy young gents from Utah participated in the SF program Sparkseed and, according to Inc Magazine, will hit $1.5M in sales in 2011.
• Husk Power Systems – I’ve been reading a little bit on this ambitious project that translates discarded rice husks into electricity for rural Indians. They seem to be getting a lot of (well deserved attention). From their web site:

Husk Power Systems (“HPS”) lighted the first village from its first 100% biomass based power plant that uses discarded rice husks to generate electricity in August 2007 and today it has installed 60 mini-power plants that power ~ 25,000 households in more than 250 villages and hamlets and impact lives of approximately 150,000 people in rural India.

• Back to the Roots – these dudes sell mushroom kits that grow gourmet oyster mushrooms out of Pete’s Coffee grounds and sell them in Whole Foods. They have cool branding and a great creation myth story involving school at UC Berkeley and food guru Alice Waters of Chez Panisse. They put on their site that they are aiming to help people grow 250,000 lbs of shrooms in 2011. At 1.5 lbs per package and $20 a pop, that would be over $3M in revenue. I would have to taste them first before drafting to the waste dream team though—I find oysters kind of slimy and prefer the portobello.
• Sanergy – not a ton of info on these guys, but a crew of MIT brains aiming to bring sanitation to Kenyan slums. The human waste would be collected and turned into energy that can be supplied to the grid. If anyone can bring home the waste to energy hardware in Kenya, this team probably could.

Just a sample for now… Who’s on your social enterprise fantasy squad?