Investing in Propelair, with Richard Smith Director of Investment, Earth Capital
Who Earth Capital are and what they do.
Earth Capital is a global private equity investment management group 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 strategies from growth capital and energy efficiency in the UK and Europe, to sustainable farming and grid-connected power project development and construction in Asia and Sub-Saharan Africa.
How long have you been involved with Propelair and 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, and 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 – Propelair was a strong fit. Our group was familiar with the Propelair toilet and its potential to radically reduce washroom water consumption, though we could also see the company was still in its early phases commercially. We agreed with Investec to invest alongside them in a £5m round in mid-2017, and I also joined the board at that time. We have since supported with some follow-on investments and are also participating in the current round.
How have you seen the business evolve in to what it is today?
Since 2017, the company has undergone some significant changes. On the product side, there have been a few updates following market feedback from installers and customers, especially in the highest usage deployments. The senior team have all joined the business since early 2018 and they have been building the processes and platform to ensure the business can grow more reliably. This change has not always been straightforward but the company has now seen remarkable growth in the sales pipeline in 2019, but there are also changes to the IT and operating systems which help ensure that production, operations and even accounting can perform well as volumes grow. Clearly, the COVID shutdown 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 and 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 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, and continues to invest in its future product line, capacity expansion and new ways that it can deliver value to their clients, whether installers, distributors or end-customers, and improving the experience for the ultimate users. It remains a young business so will have many challenges to overcome. As a director, I am working to ensure the company has the right team, that the team has the resources it needs so that they are ready and able to meet those challenges.