Dutch social enterprise Fairphone, which makes modular and — the claim is — more sustainable and ethical consumer electronics, has nabbed a chunk of funding to continue scaling a circular-economy-aligned smartphone business.
The €49 million (~$53 million) “growth capital” investment — from an international consortium of impact investors, led by new shareholders Invest-NL, the ABN AMRO Sustainable Impact Fund and existing investor Quadia via its Regenero Impact Fund — is more than the startup has raised since being founded, back in 2010. (Fairphone had previously raised $40.7 million, per Crunchbase — spread across nine funding rounds, drawing on a range of sources from crowdfunding to VC and debt.)
Other existing Fairphone investors DALHAP, DOEN Participaties and PDENH also participated in the new raise — while a number of other investors, including PYMWYMIC and over 1,000 crowdfunders, exited at this point. While Fairphone said it’s using some of the new funding to settle some existing debt.
But the headline claim for the investment is growth.
The European startup is well positioned to capitalize on opportunities flowing from the bloc’s push for a green transition by encouraging a shift to circular business models, with a top-line goal for the European Union to be carbon neutral by 2050.
EU regulators are also eyeing ‘right to repair’ as a priority for mobile devices and other consumer elections — a future requirement which Fariphone is already fulfilling, thanks to its modular, repairable-by-design devices, putting it well ahead of the (waste-generating) industry curve.
Fairphone said the new funding will be used to strengthen its brand positioning — and create further awareness around fairness and sustainability in the electronics industry.
Additionally, it said it wants to accelerate integration of fair and recycled materials into its full product portfolio — saying for example that it will be extending its mining “value chain” programs in Africa & South America, and fair wage programs in Asia.
It will also be funnelling funds into product development and improved customer service — including to keep pushing the envelop on device longevity.
Fairphone recently launched its own-brand wireless earbuds — which contain recycled plastic, Fairtrade gold in the supply chain and an extended battery life vs rival products. We understand the company has also been working on bringing an own-brand pair of repairable and modular over-ear headphones to market.
Commenting on the investment in a statement, Eva Gouwens, Fairphone CEO, said: “Over the past years, Fairphone has been able to transform from a social movement to an impactful mission-driven company. I would like to thank all shareholders who have supported us over the years. With a growing base of mission-aligned investors, we will further raise awareness for fairer electronics and accelerate the growth of our company and impact.”
We’ve asked Fairphone for its latest sales metrics and will update this report with any response.
Update: Fairphone’s CFO, Noud Tillemans, told us the company sold around 120,000 devices last year — up from around 88,000 in 2021 and 23,000 in 2018.
“This is more equity than we raised ever before in total,” he confirmed. “The €49 million is pure equity. Some of it will be used to settle existing loans. I can only share the majority is used for growth. Some initial shareholders, investing 5-10 years ago, were keen to exit.”
“We are excited to support Fairphone’s growth ambitions, as a truly circular lighthouse case within the electronics industry,” added Elisabeth Storm de Grave, Principal at Fairphone’s new investor, Invest-NL, in another supporting statement. “With its unparalleled approach to creating ethical products with both people and planet in mind, Fairphone sets new standards for the entire industry. Together, we are disrupting a short-term way of thinking that the world can no longer afford, creating a sustainable and fair future for all stakeholders’”
While Hanna Zwietering, of the ABN AMRO Sustainable Impact Fund, pointed to what she couched as a “growing trend towards conscious consumer behavior” — lauding Fairphone as “a frontrunner in the sustainable electronics industry” she said has “proven it can develop high-quality modular and fair smartphones in most competitive markets”.
In a third supporting statement, Josep Segarra, senior investment manager from Quadia, added: “We are very pleased to further support Fairphone through this significant investment alongside new mission-aligned co-investors. Fairphone perfectly fits in our vision of the sustainable electronics sector, in which we have already supported companies in the refurbished smartphones and home appliances segments. We look forward to continuing to strengthen the uniqueness of the company and aspire to accelerate Fairphone’s growth while creating value for all stakeholders and safeguarding its long-term mission.”