BACK TO START-UP BREAKFAST #2
FUNKY VEGGIE ANTI-PITCH AND 1001PACT
For this second start-up breakfast, we continue our hike on the paths of entrepreneurship and meet two young « entrepreneurs »: Camille Azoulai, co-founder of Funky Veggie and Eva Sadoun, co-founder of 1001pact.
Camille, then still a student, launched Funky Veggie in 2016 with the aim of democratizing healthy eating by making it more fun . In 2015, Eva co-founded 1001pact, a crowdfunding platform dedicated to investment with a societal, economic or environmental impact.
Our two start-ups, which are accelerating, still have a long way to go and are faced with questions: How will 1001pact approach its internationalization and its next fundraising? How will Funky Veggie integrate new products and manage an ever-increasing volume?
If they still have challenges left, Eva and Camille have already taken up many of them, let’s go back on the path they have taken and follow in their footsteps in search of answers to the great (or many?) questions of entrepreneurship.
For Eva and Camille, the adventure begins with the right combination
Eva, a specialist in finance, has always wanted to be a responsible entrepreneur. It is with her best friend Julien that she starts. They will start by creating an NGO in Togo, then launch two other projects that will fail quite quickly. Although she had been strongly advised against it, Eva has partnered with a friend. For her, the sharing of values, convictions and ultimately mink was a key factor in their success. Eva underlines the importance of this vision as a factor of resilience: you have to see BIG to stay stimulated and engaged in your project.
It is therefore in 2015 that they create 1001pact to overcome the equity gap that many social entrepreneurs face by using’crowd leverage’. This platform allows individuals to finance projects with a positive impact but also provides risk sharing allowing more co – investment with institutional actors.
The impact of the entrepreneurial pair does not stop there. However, with fairly similar profiles, Eva and Julien form a complementary pair, especially because of their appetites. Work sharing is a key issue and Eva clearly advocates focusing on what we do best.
Camille also insists on the role of complementarity between partners. Just returned from a year of exchange in China and still a student, she met her future partner Adrien during a « start-up weekend ». He, Adrien, is a financial and she, as a communicator, has the ideal complementary skills to launch a project. They launched Funky Veggie in July 2016 with the mission of democratizing healthy eating with products « without anything strange inside ».
Test your concept through a community: the POC
Funky Veggie faces a challenge: to invest its market without a euro. First of all, they begin to market Baskets (« Panyeah! ») that tick all the boxes of the healthy (vegan, organic,…) and quickly build themselves a community. A community that they will use from the beginning to find their next product.
For Funky Veggie, this start of activity was a real test period that allowed them to find their priorities and test their products, but also to identify and refine their market and positioning. Camille therefore decided to tackle supermarkets where healthy food is not very present. It is on the basis of customer feedback and experiments in their kitchen and then in a real lab that they develop the ball, their new snack bar.
1001pact also went through an enriching test phase, a POC for its activity. Because if the market problem was all found (the difficult financing of social innovation) the solution had to be tested. 1001pact is therefore testing its business with 3 projects that are successfully financed!
Getting support: yes, but how without financial resources?
Despite this success, 1001pact also experienced difficulties, particularly in terms of regulations (drafting of shareholder agreements, AMF approval, etc.). An experience from which they draw conclusions: « on certain subjects the help of an expert is often necessary ». A philosophy that Funky Veggie has also adopted, particularly with the help of experts in food packaging.
Camille and Eva both went through an incubator – especially for the competitive price of the premises – but both prioritise a more qualitative support (sectoral experts, lawyers…) sometimes essential to the development of the start-up.
Knowing how to take advantage of your ecosystem and network
To develop their projects, Eva and Camille have also taken advantage of their ecosystems and networks. The communication efforts and evangelization of the Funky Veggie brand through the marketing of the Panyeah have enabled them to build a committed community (and earn their first income). As mentioned above, this community has been a major asset in the development of their product, but it has also enabled them to succeed in a crowdfunding campaign to partially finance their production equipment. Camille has met the challenge of approaching her market without spending money; a « lean start-up » approach that allows development at a lower cost.
Funky Veggie also took advantage of its sector ecosystem by winning two specialized competitions: the Foodtech student prize and the Franprix start-up competition, which enabled them to market their balls in 51 stores in the Île-de-France region.
1001pact has also forged strong links with its ecosystem. They have indeed integrated the actors of their sectors into their project. From the beginning, they approached the impact investment funds and involved them in the construction of the platform by asking them for assistance in selecting investment criteria before incorporating them into the investment committee to finally see them return to capital. Impact funds, perhaps more disruptive than traditional VCs, provided valuable support to the project and ensured 1001pact a place in impact investing.
Engaging the actors of their ecosystem has thus been a profitable strategy for Camille and Eva
Finding funds: open to all funding opportunities!
Raising funds (or just financing oneself) is the crux of the matter for most early start-ups.
Funky Veggie chose the path of self-financing for these beginnings (Panyeah + crowdfunding) but also sought subsidies from the BPI. A word of advice from Camille: for an innovation that is not technological, get out of Paris!
1001pact has gone down a more traditional path and has had no (too much) difficulty in raising seed money with players like the BPI. It is for the second seed drive that things get tougher; discussions with funds are longer and inter-fund competition is a parameter to be taken into account. To avoid unpleasant surprises (withdrawal of a fund, lack of cash… what happened to Eva!) a valuable advice: always open up to all financing possibilities and stay in touch with your prospects. After the withdrawal of their fund, 1001pact was able to fill the gap with a cash advance negotiated with BNP and quickly resumed discussions with other funds to finally raise 500,000 euros. Eva is currently preparing its third round of funding (€2 million) to accelerate its internationalization. To find the right fund, you need an « investor who reflects the entrepreneur ».
To conclude: more challenges to be met for Funky Veggie and 1001pact
Funky Veggie first positioned itself in a niche market (healthy, vegan, gluten-free…) with the marketing of their Panyeah. Following this test and market development phase, they opened their offer to a wider range of consumers with the development of the ball and its arrival in the mass retail sector. A thoughtful transition that is part of the process of democratizing the vegan. An approach that requires particular attention to communication (Funky Veggie could have been Funky Vegan but a too militant name would not have served the cause) and to the products sold. Funky Veggie has been able to differentiate itself through its communication and create a strong brand that will surely be a lever for future success. However, many challenges remain to be met to ensure the sustainability of their activity and to continue to develop.
1001pact has taken advantage of a legal/regulatory innovation (crowdfunding and more particularly crowdequity) to position itself in a new market segment. Since its inception, 1001pact has created a place for itself in the investment ecosystem through cooperation with several funds. 1001pact was able to focus on its strengths (finance and impact) and outsource activities when necessary (communication, etc.). A great success with more than fifteen projects funded and soon the transition from 3 to 11 countries!
For more feedback from successful entrepreneurs feel free to register for our next breakfast!
Theo Maes, Analyst at Estimeo