Investment Notes: Tirtyl - zero-waste dissolvable cleaning products
Our Investment Notes deep dive into our investment decisions. We unpack what we loved, where we needed to build confidence, and how we ultimately gained conviction to invest.
Most personal and household cleaners are more than 95% water. Yet everyday, millions of tonnes of carbon emissions are generated when we ship mostly-water
cleaning products around the world - from manufacturers to supermarkets to customer’s homes - when most households have perfectly good water coming out of their very own taps!
Enter Tirtyl - a direct to consumer (D2C) company that makes personal and household cleaners in tablet form. Tirtyl Customers receive a delightful selection of tablet soaps in compostable wrapping, and a reusable glass bottle with a foaming pump. This model not only avoids bulky and wasteful plastic packaging; by enabling consumers to add water themselves, it greatly reduces the amount of carbon that’s emitted in the distribution process.
And best of all, customers don’t have to compromise on quality or convenience - Tirtyl’s soaps are delightfully scented (we personally adore Tangerine and Rose), work up a luxurious lather, and are much more convenient to store than bulky refill bottles. We’re not the only happy customer - Tirtyl has a rating of 4.9 on Product Review from over 1000 reviews.
Since their launch in 2021, Tirtyl cracked $1 million USD in sales in its first 12 months, is the top selling tablet handsoap in Australia and the #1 bestselling tablet soap on Amazon in the US. 2% of Tirtyl’s sales are also donated to environmental causes; in the last year, Tirtyl has collected over 1 million bottles of ocean-bound plastic waste.
We are proud to be backing Tirtyl as investors, supporting their pre-seed fundraise alongside an awesome cast of angel and strategic investors.
What we loved about the opportunity
Zero-waste consumer packaged goods (CPG) is category with strong tailwinds
Climate change is an issue at the forefront of all Australians’ minds; many of whom, as consumers, actively seek to make everyday choices that are better for the planet. Changing consumer behaviours has accelerated the adoption of brands where doing right for the planet is foundational to the company - such as Who Gives a Crap and Allbirds. With its planet-friendly products and approachable brand, Tirtyl is primed to ride the wave of change in consumer preferences.
Tirtyl is also disrupting a massive incumbent market - household cleaning products have a total addressable market size of $27 billion in Australia alone. With both residential and commercial consumers migrating to low-waste products, we are optimistic that a venture scale business could be built in the space.
Although Tirtyl is currently selling primarily to consumers, we believe tablet products make a lot of sense in commercial contexts - the smaller products are easier and safer to ship and store, dosage control means there is less waste, and avoiding carbon emissions is becoming increasingly important to businesses.
An excellent and forward thinking team
Founders May Bandi and Lachlan Hill are driven, sharp, mission-aligned and hungry to win.
Prior to founding Tirtyl, May was a Strategy Lead at global InsurTech CoverGenius, and ‘after work’ was the founder of a product that helps families compost at home. Previously, May has also been a General Manager of Rocket Internet companies in the beauty and wellness sector. Meanwhile, Lach was a consultant at Partners in Performance, and ‘after work’ championed an initiative called go25degrees - a movement which motivates individuals and businesses to decrease their air-conditioner temperature to 25°C - which significantly reduces emissions and energy consumption. The movement collected over 2.5 million signups and is estimated to have reduced emissions equivalent to the amount produced by 16 thousand cars.
We loved that both May and Lach have a longstanding passion for sustainability, and a track-record of motivating everyday consumers to do their part by taking simple actions.
We were impressed by how May and Lach had self-taught a lot of the skills needed to launch and scale a direct to consumer business - from product development, to building a website, to creating marketing materials, to operationalising logistics and supply chain, to delivering excellent customer experiences. For example, the team established their own 500 square metre warehouse facility in Brisbane, reducing their reliance on third-party fulfilment providers and enabling customers to better customise their product selection. At our time of investment, the team had already iterated upon many processes, all while bootstrapping the business - impressing us with their smarts, creativity, and speed of execution.
The next challenge will be to scale the business from a scrappy startup to a global consumer brand that customers love. To do this, May and Lach have assembled a team of all-stars. The founders believe that motivating high performance comes from a place of mutual respect rather than authority; they are actively designing for a high performance culture by building strong interpersonal relationships amongst the team.
There’s early signs that Tirtyl can be come a best-in-class D2C company with sustainable unit economics
Recently, there’s been a lot of chatter about the ‘rise and decline’ of direct to consumer companies such as Caspar (mattresses), Warby Parker (glasses), and Dollar Shave Club (razors). Here’s a provocative video on some of the failure modes of direct to consumer startups:
In this context, we were laser focused on Tirtyl’s ability to navigate these traps and build a business that’s not only profitable at a unit level, but also able to scale. Early signs indicate that Tirtyl is well on track - they have a product that people love (as evidenced by thousands of rave reviews); the cost of acquiring a customer is paid back in the first purchase; the majority of customers return to purchase refills; and the direct to consumer model means gross margins are healthy, even when its product is cheaper than most supermarket alternatives.
To achieve all this, the team have paid strong attention to getting their ‘digital infrastructure’ right from Day 1. They’ve invested intelligently in search engine optimisation (SEO), marketing through a range of channels, and continuously refining the customer journey. The team have also successfully expanded their lineup of products, from just 1 item (tablet soap) to a range of home cleaning products.
Of course, as VC investors we also have to look beyond the initial growth phase and build conviction that Tirtyl can scale to tens of millions in sales, and hundreds of millions in revenue. We were consistently impressed by the clarity of the team’s thinking around pathways to scale - including geographical expansion, partnerships with businesses (e.g. in tourism and hospitality), omni-channel strategies, and building a truly resonant brand. We love that the Tirtyl team don’t only dream big - they go forth and make big moves. For example, they launched on Amazon US at the same time as they launched in Australia, and ascended to the #1 spot in the tablet soap category. This has unlocked inbound interest from big businesses around the world, and the team are presently exploring distribution channels in markets around the world.
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The challenges we saw
Competition is rife; barriers to entry are low
Tirtyl is not alone in the zero waste CPG space; in Australia there is ZeroCo and US company Blueland.
ZeroCo, which recently received VC funding from Square Peg, ships customers reusable ‘forever bottles’, which customers then refill with a refill pouch. Customers can send empty refill pouches back to ZeroCo, and receive new refills. Although ZeroCo reduces reliance on single-use plastic containers, it still contributes significantly to emissions when it ships bulky liquid refills to consumers. In comparison, Tirtyl’s model is less operationally complex and has a smaller environmental footprint, while also being more convenient.
Blueland is a more direct competitor; its soaps and cleaners are also in tablet form. Blueland only recently launched its operations in Australia, and remains focused on growth in the US. In this head-to-head competition, we are backing the Tirtyl team to compete on the basis of its impact-focused Australian brand, its expanding suite of innovative, high-quality products.
Ultimately, we believe that multiple successful brands can exist in the zero-waste CPG space; there is significant market share to be taken from incumbent supermarket brands, whose products not only pollute the world with single-use plastics, but charge through the nose for it!
There’s certain areas where tablet soap underperforms gel soap - viscosity is chief among them. Unless carefully formulated, tablets can’t deliver the same delectable lather and smooth glide that customers are used to.
The Tirtyl team are hyper-focused on ensuring quality, and won’t distribute a waterless / concentrate product unless it’s up to scratch. All products are put through rigorous user testing to make sure their quality on par with mainstream supermarket brands. The team involve their customers in new product development, and develop products in high demand. For example, Tirtyl have recently dropped the home bundle - with concentrate laundry detergent, compostable cleaning towels, dishwashing liquid, and a universal cleaner.
How we built conviction
In the middle of a global pandemic, May and Lach quit their jobs and put everything on the line to build Tirtyl. They relocated from Sydney and London to the Sunshine Coast and bunkered down together in a share house, working everyday to launch and grow Tirtyl. They were unafraid to get their hands dirty (or should we say get their hands clean?), getting intimately familiar with every part of the business while bootstrapping their own growth.
Their conviction has helped them to build a brand that customers love, assemble an experienced team, all while staying faithful to their mission to do good for the planet. We’re strong believers in the product, the team, and the need for a shift to zero-waste products - and we’re excited to backing this CPG product for the next generation.
Keen to see whether the lather is as delectable as we claim? Use discount code AFTERWORK10 for 10% off your first Tirtyl purchase!
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