Founded by coder Tiffany Pham in 2014, Mogul connects 30 million plus women across 196 countries.

“Gender parity initiatives aren’t focusing enough on helping female employees reach the top,” Mogul said in a statement Wednesday about the new program, called Invitation Only.

Mogul joins an increasingly crowded field of startups, non-profits and global networks aimed at addressing continuing lack of diversity at the highest levels of corporate power. Most recently, Chief, a private network for senior female executives, raised $22 million. 

In addition to Expedia, Ericsson, Stanley Black & Decker, MediaRadar and Hansgrohe signed up for Mogul’s new initiative. 

“We are very excited to be partnering with Mogul on this pioneering movement to increase female representation as a whole, especially for senior roles,” says Kimberly Eyhorn, senior director of Global Executive Search at Expedia Group. “Executive recruitment firms are very expensive — with ‘Invitation Only’, we can now drive ROI, given the lower costs, and focus our investments and efforts on even further resources that benefit advancing women and diversity and inclusion at work.” 

Currently 28% of Expedia Group’s senior leaders are women, although they represent 50% of the company’s employees globally.

In addition to the new tool, Mogul provides a range of other resources.

“With the revenue Mogul earns, we regularly provide free educational resources to women in need through our partnerships with the United Nations and others,” CEO Tiffany Pham told Karma.

Mogul’s other clients include IBM, Amazon, Bain & Company, CBS, Home Depot and Western Union.

• At Fortune Global 500 companies, only 10.9% of top executives were women, according to public relations firm Weber Shandwick’s Gender Forward Pioneer Index.
• At the same time, several studies suggest more diverse leadership teams tend to improve returns.

The post Expedia Seeks to Diversify Leadership Pool With Mogul’s New Tool appeared first on Karma Impact.

Wind energy was responsible for 22% of the energy has consumed so far this year in Texas, the biggest electricity consuming state and long known as the heart of the U.S. oil patch. Coal provided 1% less, Electricity Reliability Council of Texas data show. While the state remains the country’s biggest coal consumer, cheaper natural gas and renewable energy are helping drive a move to a cleaner energy mix.

Mild spring weather spurred the transition to wind power, because most of the state’s coal plants are used for peak demand only. This could change as summer heat, which has already reached record levels in some parts of the country, bolsters electricity use through August.

Texas was responsible for more than 25% of U.S. wind electricity generation in the last three years, according to the Energy Information Administration. Most wind farms are in the state’s rural northern and western areas, hundreds of miles from population centers in the east and south. The Public Utility Commission of Texas authorized transmission expansion projects more than a decade ago that linked the state’s producing and consuming areas.

“Wind power has grown steadily over the last 10-to-15 years, especially in Texas,” Chris Namovicz, team leader for renewable electricity analysis at the EIA, told Karma. “Tax credits and state-level policies that require renewables have helped fuel this growth. More wind capacity has been built than the state required, but growth continues.”

The main federal subsidy for wind is a production tax credit, or PTC, which offers a credit for every kilowatt hour of energy that a farm produces over a farm’s first decade. However, this is the last year in which wind operators can start a wind farm and receive the PTC.

Texas, Oklahoma, Iowa and Kansas were the four-biggest wind-power producing states last year, responsible for 52% of U.S. output, according to the EIA. The four states benefit from the country’s best wind resources and low construction costs.

The subsidy’s expiration may be advancing the construction timeline of a number of projects, Namovicz said.
Other renewables are also rising. Texas climbed one place to sixth among states when it comes to solar power production, the Solar Energy Industries Association said. The SEIA is predicting that Texas will move to second place, behind California, by 2021 with the construction of more, solar farms in West Texas, many of them near existing wind farms.

The post In the Heart of the Oil Patch, Wind Takes Lead in Energy Production appeared first on Karma Impact.

As it cultivates its next generation of consumers, many of whom shun sugary beverages like Coca-Cola’s flagship drink, the company has invested $20 million in kombucha producer Health-Ade. The deal for the health drink occurred in May, according to Acuris’ M&A research platform Mergermarket, which cited unidentified sources.

Health-Ade, based in Torrance, California, is the third-largest U.S. kombucha producer, behind PepsiCo’s KeVita and GT’s Living Foods, Mergermarket said. The soda giant had invested in Health-Ade in 2014 through First Beverage Ventures, a limited partner of Coca-Cola’s Venturing & Emerging Brands division.

Coke sees a bright future in the probiotic drink. Last September it bought Australian kombucha distributor Organic & Raw Trading Co., which makes MOJO kombucha drinks. 

Coca-Cola has been pivoting and cultivating younger drinkers for decades as tastes change, beginning with Diet Coke in 1982 to the launch of Dasani water in 1999. Recently purchases include sparkling water company Topo Chico, cold-pressed juice producer Suja and this year’s $4.9 billion deal for coffee chain Costa Coffee.

• Carbonated soft drink sales have been on the decline for over a decade, and health and wellness drinks, such as kombucha, coconut water and bottled water, are picking up. 
• Wellness beverages now make up 41.4% of the overall U.S. beverage market after growing at a 3.6% annual rate since 2012, according to a report from the Beverage Marketing Corporation.
• In December 2018, Coca-Cola’s biggest competitor, PepsiCo, acquired SodaStream International, which enables consumers to make seltzer water at home. It also purchased protein beverage company Muscle Milk in February of this year. PepsiCo also launched its own sparkling water line, Bubly, in February 2018.
• Alcoholic beverage giants are also diversifying through non-alcoholic alternatives. Beer conglomerate Molson Coors, for example, acquired Clearly Kombucha in June 2018, and it holds a minority stake in the chai tea company Bhakti Inc.
• Karma Take: As consumers shun sugary sodas in favor of sparkling waters and healthier wellness-oriented alternatives, beverage producers will need to diversify to remain attractive to investors. Even if it includes scoby (symbiotic culture of bacteria and yeast).

The post Coca-Cola Invests in Health-Ade Kombucha as Pivot Away From Sugar Continues appeared first on Karma Impact.

Burning ethanol releases 39% fewer greenhouse gases than gasoline, the U.S. Agriculture Department said in April. In Brazil, which is the second-biggest ethanol-producer after the U.S. and responsible for about half of global exports, most vehicles run on ethanol due in part to tax breaks.

Though a renewable fuel, ethanol is still criticized. Vast amounts of energy are required throughout its production and land is set aside for growing sugar. 

“The land used and energy expended to make ethanol mean that it’s definitely not as environmentally beneficial as solar or wind,” said Chris Barber, head of refining biofuels analysis for ESAI Energy LLC, an energy consultancy in Wakefield, Massachusetts. 

• Biofuel use is expected to grow about 3% a year for the next five years, the International Energy Agency said in 2018. That’s short of the 10% required to meet the  Sustainable Development Scenario, the IEA guideline for cleaner, wider energy output.
• Favorable Brazilian government policies are expected to boost ethanol use in the coming years. Brazil’s sugar-based ethanol industry is more efficient than the corn-based fuel production in the U.S.
• In the U.S., ethanol production fell last year after federal rules changed to help small refiners; President Trump is said to plan measures to boost output, the Wall Street Journal reported last month.
• BP Bunge Bioenergia, the stand-alone entity created by the deal, will have 11 biofuels mills in Brazil, with 32 million tons of crushing capacity per year, BP said in a press release.
• Karma Takeaway: While the deal is a vote of confidence in the fuel, ethanol still takes heat for not being as environmentally friendly for the environment as solar and wind power.

The post Ethanol Demand Fuels BP, Bunge Merger as Globe Seeks Cleaner Power appeared first on Karma Impact.

Governor Andrew Cuomo signed the accord last week for two wind farms off Long Island with almost 1.7 gigawatts of capacity, a step toward the state’s goal of switching to emissions-free electricity by 2040. Each will be bigger than the U.K.’s Walney Extension, the largest offshore wind project in the world. Cuomo sees 1,600 new jobs, as demand for equipment and services surges.

“States on the East Coast are looking to increase their renewable energy and offshore wind and solar are the only options,” said Paul Flemming, managing director at ESAI Power LLC, an energy consultancy in Wakefield, Massachusetts. 

Most of the world’s offshore-wind capacity is in northern Europe off the coasts of the U.K., Germany, the Netherlands and Denmark. China, Japan and Taiwan are seeing a surge of investment that will make Asian waters another center for electricity production. The U.S. is a latecomer but is primed for growth as states demand carbon-free power and costs decline.  

Norway’s Equinor ASA and a joint-venture between Denmark’s Orsted A/S and U.S.-based Eversource Energy will build the farms that will supply electricity for more than 1 million homes when they come online in 2024. This will be a boon for Siemens Gamesa Renewable Energy SA, which conditionally received an order to supply turbines to the Orsted-Eversource project.

• New York’s announcement is expected to intensify competition among East Coast states for jobs and supply chain investment in the offshore wind market, which is projected to be one of the world’s fastest growing renewables markets during the next decade.
• Offshore development in the U.S. is ramping up after being hindered by high cost and lawsuits. The only commercial wind farm in the U.S., the 30-megawatt Block Island Wind Farm, came online in 2016. The project, supplying Rhode Island’s Block Island, has led to cheaper power while concerns about a negative impact haven’t panned out. There are now proposed projects in states from Virginia to Massachusetts.
• “Offshore wind has the highest barriers to entry of sustainable power because of the high cost, with costs easily topping $1 billion,” Flemming said. “The contracts are highly prized though, because on the farms are running there’s a steady stream of income.”
• While the turbine housings themselves are unlikely to be built in the U.S. anytime soon, other major components, including foundations, towers and blades, can be sourced domestically, according to a March report on the supply chain written by Stephanie A. McClellan and published by the University of Delaware’s Special Initiative on Offshore Wind.
• Karma Takeaway:New York’s accord may be the start of a tsunami of deal as states seek to meet the higher demand for clean energy. With the supply chain in its infancy in the U.S., opportunities abound for social-impact investors. 

The post New York Takes U.S. Lead on Offshore Wind Power appeared first on Karma Impact.

With the launch of a new $100 million fund, Maniv plans to at least double its portfolio from the 24 investments made from its first $44 million fund.

Maniv’s portfolio includes Revel, an electric moped-sharing company that launched in Brooklyn and Queens in May; Bipi, a Spanish car subscription service; Phantom Auto, which enables car-buyers to test drive remotely-operated vehicles; and Autofleet, a software platform that helps ride-hailing networks. Other investments include software, sensor, camera and cybersecurity start-ups focused on the automotive industry.

“We are extremely passionate about how mobility innovation can change our world for the better,” says Olaf Sakkers, Maniv’s general partner. “We’re in a critical moment of change.”

The automotive industry certainly thinks so. It invested $120 billion in start-ups in 2017-2108, according to an April survey by McKinsey & Co. The report also said that $220 billion has been invested in more than 1,100 companies since the decade began. 

“The demand for innovation in mobility will increase in coming years,” predicted a recent report from Viola Ventures, one of Israel’s leading VC firms. 

Michael Granoff, Maniv’s founder and managing partner, first became interested in better mobility after witnessing the 9/11 attacks in New York. He created Securing America’s Future Energy, a non-governmental organization, a moving force behind the 2006 energy bill.

“It had the first fuel economy standards increases for the first time since the 80s, and the first electric vehicle incentives in the world,” Granoff says. “It was really that process that introduced me to the idea that the only scalable way to break the monopoly of oil in transportation was to get electric.”

Granoff’s interest in electric vehicles brought him into early contact with Elon Musk and Shai Agassi, who were each working on battery-powered cars in the U.S. and Israel. He joined Agassi’s Better Place electric car start-up but the company collapsed in 2013 after burning through $1 billion of investors’ cash. 

Granoff moved to Israel in 2013, which coincided with a burst of activity in the country connecting technology with the automotive sector. This included Waze, which was acquired by Google for $1.3 billion, and Mobileye, which raised $5.3 billion in an IPO in 2014 before being acquired by Intel for $15.3 billion.

Dozens of start-ups began popping up in Tel Aviv. While General Motors was the only major auto manufacturer with an R&D facility in the country in 2015, today it’s been joined by VW, BMW, Ford, Yandex, Renault-Nissan-Mitsubishi, Hyundai, Honda and Porsche.

“I began to come into contact with some of these very exciting ideas. I backed them in an informal way personally and then set up the fund doing it in a more formal way,” Granoff says.

Granoff says venture capital is “the most effective way for us to be able to help companies and to match incumbent industry players with start-ups that have technology that is changing the industry,” enabling Maniv to create a bridge between fast-moving, undisciplined tech geeks and large, slow-moving industrial giants.

Maniv’s “sweet spot” is about $2 million at an early stage, but the fund also expects to participate in follow-up rounds.

While 18 of Maniv’s investments in its first fund were in Israeli companies, Granoff expects the new fund to have a more global range. Two of its first five investments were in Revel, in the U.S., and Bipi, in Spain. Three more investments have not been announced publicly.

“We’re seeing that there is an increasing interest in digitization of transportation in entrepreneurial communities around the world. We’re seeing a surprising number of interesting deals from Europe,” he says. “We’re seeing the same amount of deal flow from Israel as we have in the last number of years but we’re now seeing global deal flow at a much higher value.”

Maniv’s investors include Carasso Motors, one of Israel’s largest car importers and leasing companies.

“We are in a changing business environment,” says Avi Kenet, Carasso’s chief commercial officer. “We want to be in touch with the trends, with innovation, with novelties — anything that can help us plan and think how we want to adjust for the change in the industry.”

Kenet says the industry is feeling changes from four directions: connectivity, autonomy, sharing and electrification. Carasso’s involvement with Maniv “gives us a very good tool, a platform to understand better what the changes are and when they are supposed to take place,” he says.

As traffic chaos threatens to paralyze ever-growing cities, Granoff is convinced that the technological revolution in mobility will help solve the growing problems of urbanization, pollution and overcrowding.

“Humanity has engineered itself out of every difficulty that it’s faced,” he says. “The creativity and imagination of these founders is inspiring and without a doubt will create the solutions to the problems of modern mobility.” 

The post Maniv VC Firm Doubling Down on Future of Mobility appeared first on Karma Impact.

Founded only two years ago Joshua Posamentier and Abe Yokell, Congruent has discovered opportunities in everything from geothermal power to coffee roasting. 

The firm focuses on four main sectors: energy transition, food and agriculture, smart cities and mobility, and industrial/supply chain, which also includes advanced materials and efficiency technologies, said Posamentier, who’s also a managing partner at Congruent. 

“We are looking at no-compromise solutions to big problems,” Posamentier said. “We are generally not expecting people to change their behavior.” 

Posamentier spoke with Karma contributor Mark Shenk.

Mark Shenk: You have invested in a vast assortment of startups. Can you tell me if there’s one that’s especially exciting at the moment?

Joshua Posamentier: Emergy has been cause for a lot excitement internally as it was an alternative meat deal. Unlike Impossible and Beyond, Emergy foods will be competitive outside of the high-end sector here. First-world countries eat a high-protein diet while in much of the world wants more. 

People in other countries such as India and China want to consume more protein, with the middle class specifically desiring animal protein, and there’s not enough arable land in the world to support developing regions eating like the U.S. Emergy will be competitive in those markets in addition to domestically.

It’s delicious. It has a lower-cost base than others in the field, has great mouth feel, and looks good on the plate.

Shenk: High-end coffee shops are proliferating. Bellwether Coffee allows them to roast their own beans, beans that are sourced ethically. How does it work?

Joshua Posamentier: Bellwether Coffee has a product that allows a cafe to roast their own coffee. It’s electric and ventless. It streamlines the supply chain so much that it drops both the cost and the carbon footprint. This literally cuts the carbon footprint by half. Bellwether also manages the green coffee supply chain, which allows the company to influence growing practices. And there will be an option for the consumer to tip the grower.

Shenk: There’s a great deal of interest in solar and wind, but one rarely hears about geothermal power anymore. It’s interesting to see that you’ve invested in Fervo Energy, a geothermal startup. What attracted you to this project?

Joshua Posamentier: Fervo, which we just closed a few weeks ago, is exciting. Nobody has heard about geothermal in years. The last significant geothermal startup was Alta Rock, which had limited success. 

Fervo is applying unconventional oil and gas technology to geothermal. They’re using horizontal drilling and the other tools developed by the oil and gas industry and leveraging them for geothermal.

Shenk: Bill Gates-backed Breakthrough Energy Ventures also invested in Fervo. Did you pair up with them? 

Joshua Posamentier: Yes — we co-led that deal alongside BEV. They’re a unique shop with a really deep technical bench and are one of the few groups that’s not shy about hardware with deep technical challenges in the energy space. We’d expect to do more with them over time.

Shenk: You are very active in the solar sector. The companies you back are in niches I haven’t thought about, not in building the panels themselves. Can you explain what attracts you to these startups?

Joshua Posamentier: Omnidian takes care of operations and maintenance of residential and small commercial solar, while Raptor Maps looks at the other extreme at utility scale arrays, analyzing drone data to identify and diagnose issues on large-scale projects. They both are all about making solar more cost effective.

Shenk: Is there an average amount you invest, a range?

Joshua Posamentier: We focus only on early stage companies and have a typical first-check range of $150,000 to $1.5 million, but there’s not really a typical or average number.  We also hold deep reserves. Deals where, for our investment, we’d only own a de minimis piece of a company, are typically out of scope. We want to be a material part of a company — not just a checkbook.

Shenk: Do you often partner with other venture capital firms?

Joshua Posamentier: Because of the breadth of our investment areas, we don’t often overlap that much within any one firm. We’ve co-invested a few times with Closed Loop Fund on some of our circular economy companies. We’ve co-invested a few times with my old shop, Prelude Ventures, given the general alignment. I think we’ve got a couple each with 8VC and Wireframe Ventures. 

We’ve syndicated rounds with over 75 funds. One of the things we’re passionate about is building the right investor groups for companies we’re involved with — it can make a huge difference to companies over time.

Shenk: If you bring in partners, who are they? Family offices? Other venture firms? 

Joshua Posamentier: If you mean syndicate partners in deals, it’s mostly other venture firms, but also strategic corporate investors and family offices we’ve worked with in the past or have some specific value add in a sector the company is focused in.

Shenk: Your projects all share the aim of sustainability. Do you expect with this ethical-investing strategy you can match the returns of your peers?

We aim to make venture-grade market returns in sustainability. At the end of the day we want there to be more capital and drive the virtuous cycle of investment.

The post Congruent Ventures Backs Ideas Promising Sustainability Without Compromise appeared first on Karma Impact.

Fifth Wall pulled together 50 investors from around the world to raise $503 million, and the company had to turn away some investors. The pool is more than double the $212 million Fifth Wall raised in its first fund in 2017.

Commercial Realtors are seeking not just more property, but technology that makes their jobs easier, Fifth Wall co-founder Brendan Wallace told Karma in an interview.

“They’re looking to identify new technologies that can help them accelerate the commercialization of the space they already have, rather than simply buying additional space or adding new assets to their portfolio,” said Wallace.

Global proptech startups raised a record $9.9 billion in the first three month of this year, compared with $1.4 billion in the first quarter of 2018, according to a CREtech report. The momentum carried on as April, May and June all saw investments that passed $1 billion. 

• The three-year-old VC firm is looking to invest in real estate financial services, energy efficiency, mobile and logistics, as well as construction technology, according to Wallace.
• Commercial real estate has a reputation for being slow to adopt new technology, but Wallace thinks that is going to change because “real estate financial markets have become more liquid and more transparent.”
• Karma Takeaway: Investors’ appetite for proptech has grown substantially as real estate owners globally seek to use technology to optimize their businesses. 

The post Fifth Wall Closes $503 Million VC Fund As “Proptech” Demand Soars appeared first on Karma Impact.

The Paris Agreement of 2015 gave businesses added incentive to try alternative methods to secure funds and space for planting trees, according to a recent report from the World Resources Institute and The Nature Conservancy. Some approaches borrow from the idea of a sharing economy pioneered by companies like Uber, such as planting in smaller farm plots as an alternative to large commercial tree-growing methods. Firms are also testing planting trees to clean and manage wastewater.

“Investors are recognizing that there are opportunities, both in more traditional sectors, as well as the venture capital-startup sort of approach,” The Nature Conservancy’s Eriks Brolis, a co-author of the WRI report, told Karma in an interview. Brolis also manages a U.S. grant program that looks for ways to speed ways for natural lands to capture carbon.

While there’s no official market size estimate for impact investing tied to trees — the category is highly fragmented — median sales growth of companies mentioned in the report doubled in a year.  One 2015 study estimated the economic impact of the American “restoration economy” alone at about $9.5 billion, with another $15 billion in closely tied industries.

Traditional land-preservation funds are attracting attention from Wall Street banks like J.P. Morgan Chase & Co. , Goldman Sachs & Co., and Credit Suisse Group AG as governments and companies start on carbon and look for ways to stem costs associated with climate change.

Ten such funds were created in 2017 and 2018, an April report from the Global Impact Investment Network found. That’s a faster pace than the four created between 2008 and 2010. GIIN surveyed 34 investment vehicles that manage $9.4 billion. 

New Hampshire-based Lyme Timber Co. has owned and managed timberland and rural real estate in the U.S. and Canada for more than four decades. Lyme closed a $300 million round for its fifth investment fund in 2018. The company has profitably preserved more than 850,000 acres, according to its website.

Lyme uses easements, a kind of lease or temporary right to use its land, for a fee. Its agreements make sure land isn’t used for development. Sale proceeds are put toward managing acquired land through sustainable forestry, recreational uses like hiking, hunting and fishing, said Peter Stein, a Lyme managing director and leader in several conservation advisory . 

Returns are high enough to attract traditional private investors, Stein said, noting some participants now come from places like Goldman Sachs.

“Half of our investor base are self-identified ESG/impact investors,” Stein told Karma in an interview. “The other half is not, but they don’t seem to mind that we do permanent conservation with our land.”

A move toward machine learning and savvy data use is, in general, stoking demand, Stein said.

“Even the trillion trees, they sort of have to go in the right places,” Stein said. “And so it’s how do we use big data and machine learning to accelerate the knowledge about what sites are going to be most resilient for forests to be conserved and new forests to be created?”

Land Life Company, founded in 2013 and based in Amsterdam, uses data and a proprietary biodegradable protective cone that helps tree saplings adapt to harsh environments like areas destroyed by fire or deforestation. Its global projects include rebuilt highway embankments in Tijuana, Mexico to forests in of Spain and Texas as part of Dutch car lessor LeasePlan Corp.’s carbon offset program. 

Land Life’s projects are profitable, and it’s investing gains back into the business, Jurriaan Ruys, CEO and Land Life co-founder, told Karma in an interview. After $3.9 million (€3.5 million euros) in series A funding last year, Land Life doesn’t expect to need any outside fundraising for at least the next 12 months, if at all. Ruys said he’s adding to the firm’s 30 employees amid expansion. 

“We think we have an opportunity to grow smart and reinvest our operational cash flow, and grow the company that way,” said Ruys, a former McKinsey & Co. partner. “So far, that has worked pretty well.”

Greenprint Partners, based in Chicago, uses natural infrastructure, including street trees, to help clean and manage wastewater systems. It’s focused on low- to moderate-income neighborhoods hit by urban flooding and polluted water.

One Greenprint project, in Peoria, Illinois, added 100 raised garden beds and other features to manage a sewer system that regularly overflowed into the Illinois River. It uses a stormwater forest with poplar trees, known for their ability to absorb and clean polluted water

“Cities are getting savvier and savvier,” Rose Jordan, Greenprint’s marketing manager, told Karma.

Greenprint is seeking $2.75 million through a seed and fundraising round anchored by Spring Point Partners, Jordan said.

The post Planting One Trillion Trees Will Take Capital, But Can It Be Profitable? appeared first on Karma Impact.

Their solution is a cooperatively owned vacation-stay website called Fairbnb.coop, whose name sums up its aim. Working with local officials to reduce the negative impacts of tourists, Fairbnb plans to launch in six European cities by early August. Software development issues have pushed back the launch date from late June.

“We want to create a market solution that transforms tourism from a problem into an opportunity for local communities,” Emanuele Dal Carlo, a co-founder of Fairbnb, said in an interview with Karma. 

While growing popularity of commercial accommodation sites such as Airbnb has put increased pressure on cities’ services, few hosts on the sites bother to collect the local taxes or other fees that hotels are obliged to pay to offset the impact of visitors. 

Also, the owners of these sites have been reluctant to provide data to city officials so the scofflaws can be stopped or made to comply.  And studies show an increasing number of rooms and homes available on these sites are mini-businesses devoted to short-term rentals, not local residents renting out a room occasionally to make some extra pocket cash.

Leaders in cities from Amsterdam to Barcelona, as well as San Francisco and Tokyo, have been hit by complaints from locals who fear the increased number of apartment dedicated to tourists are destroying the character of historic neighborhoods. Affordable housing advocates say the tourism rentals have led to a worsening shortage of apartments and homes priced for locals. Also, tourist-oriented stores have replaced shops that offering the goods and services needed by long-term residents, from shoemakers to grocery stores.

The basic problem, Dal Carlo said, is that only individual companies and homeowners benefit from the Airbnb-style of tourism, while the entire community suffers from the impact.

Cities are trying to fight back by taking action to restrict rentals, regulate the industry and impose taxes. Even so, more than 100 European cities were found to be “over-touristed” in a European Union report last year, Reuters reported. The article noted that a third of the properties surrounding Barcelona’s popular University Square, for instance, were listed for rent on Airbnb, while the city of 1.6 million struggles to absorb more than 30 million tourists a year, and residential rents have climbed more than 30% over the past five years.

Fairbnb says it can resolve much of that concern.

Its proposition is simple, the company notes on its website: It works together with municipalities to ensure all rented homes comply fully with local laws, and bars hosts who have more than one home for rent in any given city; half of the platform’s brokering fee is donated to a non-profit or community organization in the local community; and the platform is a grouping of locally-based cooperatives with its executives’ salaries capped.

Fairbnb plans to debut with about 500 rental listings in six cities across Europe: Venice, Amsterdam, Barcelona, Valencia, Bologna and Genoa, according to Dal Carlo. The first three are among the European cities hit hardest by the Airbnb trend. A fourth of Venice’s 40,000 homes and apartments are used as short-term rentals, said Dal Carlo, who lives there.

Other pilot cities, including Genoa and Bologna, are not yet overrun, but Fairbnb organizers in those towns want to tackle the problem before it happens, he said.

Fairbnb has been raising money to perfect its technology through a crowdsourcing campaign on Indiegogo, gathering about $12,000 of its $34,000 goal so far. A second crowdfunding campaign, on GoTeo.org, has raised about $8,500 to fund a five-city tour in Spain where the organizers hope to explain their project and sign up additional homeowners.

Dal Carlo and his colleagues launched their quest for a better platform as long-term residents of cities affected by the Airbnb-ification of their hometowns.

“This is not a quick-buck scheme,” said Dal Carlo. In fact, its cooperative structure is designed to ensure no single investor can take control and change the nature of the project, he said,

“We’re open to investors, but more like the impact investors interested in a social outcome,” he said. “Or it could be an angel investor, but don’t come expecting to be billionaires in two years.”

Cities hit by the tourist-rental problem have been eager to work with his team, said Dal Carlo, who added that they are meeting regularly with officials in Amsterdam, Barcelona and Bologna to work out details including how to collect hotel tax.  

Marketing is not a major expense in Fairbnb’s plans. It plans to rely on press releases, conferences and word of mouth, hoping to attract local leaders who will set up Fairbnb “nodes” in major cities and tourist destinations. “We start as a social project,” Dal Carlo said. “It may be slower, but it powers the engagement of people around the world.” 

The project aims to be in 120 cities by the end of 2021, with an average of 35 to 40 homes in each locality. If the project succeeds, they hope to be able to capture up to 5% of the home vacation rental market in about five years. But without the prospect of billions of dollars in profit, they know they can’t displace the existing market leaders. 

“We’re not in this for money,” said Dal Carlo. “We hope the others will see us and say ‘Maybe these guys are on to something, maybe we need to rethink our model and copy them,’” Dal Carlo said. “And even if we fail, we are going to go to sleep with a clear conscience.”

The post Fairbnb Aims to Be Ethical Alternative to Airbnb appeared first on Karma Impact.