Investing in Propelair: Q&A with Richard Smith, Director of Investment at Earth Capital

Earth Capital’s investment in Propelair came through in 2017, alongside investment from Investec. Here, Richard Smith talks about his experience in supporting Propelair and sustainable businesses financially.

Who are Earth Capital and what do they do?

Earth Capital is a global private equity investment management group. We are focused on sustainability technology that falls under the climate change nexus of energy, food and water efficiency. The managers across our group are investing in various strategies. These include growth capital and energy efficiency in the UK and Europe. We also invest in sustainable farming, grid-connected power project development and construction in Asia and Sub-Saharan Africa.

How long have you been involved with Propelair? Why did you get involved in the first place?

I got involved personally in late 2016. The family office related to our group had a small shareholding. I was initially assessing how our new fund might invest in a more material way. Our fund is focused on supporting growth-stage companies with positive impact – the argument for Earth Capital’s investment in Propelair was very strong.

Our group was familiar with the Propelair toilet and its potential to radically reduce washroom water consumption. We could also see the company was still in its early phases commercially. So we agreed with Investec to invest alongside them in a £5m round in mid-2017. I also joined the board at that time. Earth Capital’s investment in Propelair has since included support with some follow-on investments. We are also participating in the current round.

How have you seen the business evolve into what it is today?

Since 2017, Propelair has undergone some significant changes. On the product side, Propelair have made a few updates following market feedback from installers and customers, especially in the highest usage deployments. The senior team have all joined the business in and since early 2018. Since then, they have been building the processes and necessary platforms to ensure the business can grow more reliably.

This change has not always been straightforward. Yet, the company has seen remarkable growth in the sales pipeline in 2019. Propelair have also made changes to its IT and operating systems, which help ensure that production, operations and even accounting can perform well as volumes grow. Clearly, the COVID-19 lockdown has been challenging. But the team have responded well and continue to win new clients despite this.

Why is now a good time for people to get involved with Propelair?

I cannot offer advice on a personal decision to invest. But I can say that now is a good time for Propelair. All involved with the business are and have been working hard to deliver sales growth and international expansion. They have worked hard to ensure that existing customers are very pleased with the service and toilets’ performance. More broadly, we are seeing large corporate clients demand improved environmental performance and planning for ‘Net Zero’. These trends should be very beneficial for Propelair as well as for the other cleantech businesses we invest in.

Finally, in your opinion, what does the future look like for Propelair?

As any investor will tell you, the future is always uncertain! The company is planning for growth in the UK and internationally. Further, it continues to invest in its future product line, capacity expansion and new ways to deliver value to their clients. This includes value for installers, distributors as well as customers. They are also working on improving the experience for the ultimate end-users. Propelair remains a young business. So we will have many challenges to overcome. As a director, I am working to ensure the company has the right team and that the team has the resources it needs, so that they are ready and able to meet those challenges.