After a dull in financing activity, environmentally friendly brands of Direct-to Consumer (D2C) are back in the spotlight, with investors loosening their wallets. These startups, which achieved $ 60 million in financial resources in 2022, experience a new traction after they have collected 29.2 million US dollars this year. This is a sharp back -up of only $ 0.59 million in 2024 and 17.6 million US dollars in 2023, according to Tracxn data.
Last week, Ecosoul Home entered the Soonicorn Club in Sustainability-oriented haven-oriented haven-oriented haven brand with a finance round of $ 20 million, which was listed by Accel and Bajaj Fin Securities. At the beginning of this month, Amwoodo, Startup of Sustainable Solutions, secured $ 4 million in pre-series, a financing listed by Rainmatter. In July, the Bambrewrew resident in Bengaluru collected $ 10.3 million for its environmentally friendly packaging solutions in a strategic round, while the D'Moksha brand, which had previously concentrated on overseas markets, began scaling overseas in India.
“Cheap environmental regulations and plastic restrictions have also promoted investments. Environmentally friendly D2C brands such as our skills are demonstrating growth and sustainability at the same time,” said Rahul Singh, co-founder and CEO of Ecosoul Home. The company has doubled its income in the past 12 months, expanded its portfolio to over 1,000 skus and is currently present in 12 countries. Ecosoul is listed on e-commerce and quick commerce platforms and generates 68% of its income online. In addition, Singh added that the company had set the goal of doubling income, starting five new facilities and expanding capacity in existing plants in the coming year.
Main driver of the investor interest
Industry observers note that the shift of the consumer – especially between millennials and gen z – is an essential driver for the interest of investors. This population group is actively looking for cleaner, toxin-free, biodegradable alternatives in the daily basics such as house and kitchen products, body care, clothing and beauty. The accessibility of the price points and the wide distribution were also of crucial importance for customer loyalty.
“Repeated orders or brand loyalty only occur if it is too cheaper to conventional options. Brands that have cracked this pricing and at the same time build real, accessible sales strategies. The portfolio company NAT Habin from BII, which offers environmentally friendly products for personal care, has scaled income from GJ25 in GJ 24 in Billion GBP.
“Investors are increasingly placing bets on D2C brands that can offer authenticity, traceability and scalable economic economy. ESG concerns, regulatory examination and shift of consumer preferences also contribute to this increasing interest in investments,” said Swagatika, CEO and fünscher from NAT HAB. The company will target an ARR of 500 billion GBP over the next 18 months, compared to 200 billion GBP, whereby offline, general trade and Quick Commerce is expected to contribute up to 20% of the income.
There are challenges
Despite the positive dynamics, the challenges exist. High F&E expenditure, regulations for regulatory compliance, guaranteeing the product fresh and scaling inexpensively under increasing input costs remain urgent concerns. Distribution adds further complexity. “The maintenance of the product freshness and the management of the complexity of the supply chain, especially if we expand offline, are important challenges. The cost efficiency is another value because raw materials and logistics become more expensive,” said that.
The balance of growth with profitability has therefore become of central importance for maintaining the trend. A report by the Imarc Group estimated that the market for green technology and sustainability in India reached $ 837.2 million in 2024 and is expected to grow to 8.6 billion US dollars by 2033 and increased by 27.36% between 2025 and 2033.