Fledge Raises Funds As ‘Fledgling’ BURN Gets $4m For Africa Factory
Seattle startup incubator Fledge has closed the initial round of a venture capital fund to back companies addressing a broad market of “conscious consumers,” while a member of its first class landed $4 million to manufacture clean cookstoves in Africa.
The Fledge fund’s first close of $307,000 is sufficient to back the incubator’s 2012 cohort of seven companies—including efficient cookstove maker BURN Manufacturing (details below)—and the startups in the next class, which begins Feb. 18, Fledge co-founder and managing director Michael “Luni” Libes tells Xconomy in an email.
The “fledglings,” as participating companies are called, give Fledge 6 percent equity stakes in exchange for services and a $10,000 investment—a mix of equity and revenue-based financing, which is repaid as the companies grow. Libes notes that this twist on the usual startup accelerator/incubator model will allow Fledge to leverage investor capital to back more companies sooner.
Investors in the initial close come from Northwest Energy Angels, Social Venture Partners, independent Angel investors, and investors in HUB Seattle, united in the desire “to see more businesses that improve the world, while earning a profit,” Libes says.
He positions Fledge, launched last year, as filling a gap in the local startup ecosystem. It is currently structured around technology companies, Libes says, but underserves entrepreneurs interested in businesses that focus on consumers who care about the environment, energy, health, community, and sustainability.
“We expect to continue raising money for another year or two to reach our goal” of a fund sufficient to operate the incubator and invest in startups for 10 years, estimated at $2.2 million, he says.
BURN Manufacturing, part of the Fledge 2012 class, has secured a $3 million loan from the federal Overseas Private Investment Corporation (OPIC), and a $1 million investment from General Electric to build a factory in Kenya that would make high-efficiency cookstoves, with additional assembly done in Rwanda, Tanzania, and Uganda.
The stoves are an alternative to the rudimentary, inefficient, and hazardous cooking fires that are still the standard in villages and slums throughout the developing world. Some 3 billion people use wood, dung, or other biomass as their main source of fuel for cooking and warmth, according to the Alliance for Clean Cookstoves, causing a range of health and environmental problems.
A news release from the OPIC says cookstove smoke causes up to four million premature deaths annually.
The financing, announced last week by outgoing Secretary of State Hillary Clinton, will save a typical household up to $250 a year in fuel costs, in addition to dramatically improving indoor air quality, and reducing deforestation, says BURN founder and CEO Peter Scott, pictured at top.
The company expects to employ some 200 people in Africa and more than 20 in Washington.