Circular economy: waste not/want it

Perched on the roof terrace of her Shoreditch offices, Globechain founder May Al-Karooni looks out over the office blocks. By the end of this summer, that view will be a memory. Globechain and its seven London staff are moving to plush new offices in Holborn, closer to the West End retailers that are now its best customers.

Globechain is that rare beast – a living, breathing circular start-up, based on the premise that one man’s poison is another man’s meat, finding takers for unwanted items that would otherwise go to landfill. The company helps big businesses to improve their green credentials and reduce their waste, giving unwanted items to cash-strapped charities and small businesses.

Six years after it launched, Globechain has followed a large retail customer into Spain and Germany and banking customers into Houston and Milwaukee. It has expanded from office and retail furnishings into fashion, about to enter a strategic partnership with a top five brand, and is eyeing opportunities in New York and the United Arab Emirates.

It’s a far cry from the early days when Al-Karooni was making cold calls to large corporates, from the three years she didn’t pay herself a salary.

Al-Karooni developed Globechain after the investment bank she worked for moved offices, dumping perfectly good fixtures and furnishings to refit everything from desks to carpet tiles.

“The cost was something like £50,000 per person – for 300 people,” Al-Karooni says. “I was appalled. I thought, why can’t they just give all this stuff to charity. And the company couldn’t answer that question – they felt it wasn’t their problem. Commercially, that’s madness.”

No one in the market connected businesses with unwanted items to prospective takers, whether charities or smaller companies. Connection-based solutions, from AirBNB to Uber, were becoming all the rage. “I thought, why has no one done this for the waste market?”

Al-Karooni quit her job. A web developer built a rough and ready site. A cold-call to the Arcadia Group landed her first major win, a year-long trial to rehome shop fixtures and fittings for 60 stores across Philip Green’s business empire.

Globechain went on to work with Nandos and the NHS. The NHS struggles to dispose of unwanted supplies and equipment, which can breach UK health and safety laws. Globechain has rehomed items with charities in Sierra Leone, Kenya Ghana, Guinea, Libya and Ukraine.

Business model

Businesses with unwanted items – everything from restaurant tables to shop display units – upload a photo and description. Would-be takers contact the seller, to say what they will do with that item – reuse, recycle or repurpose. Whoever makes the best case takes home the goods, and all for the price of the transport.

For a business based off London’s so-called Silicon Roundabout, Globechain is surprisingly low-tech. The business is web-based, not app-based – “You know how expensive it is to develop an app, right?” Al-Karooni says.

Starting out, Al-Karooni built her own database of prospective takers. Having rehomed all the unwanted Arcadia items, the question then was how to monetise the business.

Globechain charges donors of goods to make a listing. “That’s a fee they would otherwise spend on incineration costs, or to hire a man-and-van and pay a landfill tax to take away those items,” she says. “It’s a fee per shop, per restaurant or per construction site. It’s not set by weight – I don’t want this to be a weight issue.”

The taker pays for transport. “Having to make that commitment makes the takers stick to their end of the bargain. The quality you find on Freecycle or Gumtree isn’t that good any more – there’s a lack of respect that comes with getting goods for free.”

Al-Karooni launched Globechain without financial backing. “We tried and failed to land venture capital – ironic, given that was my background,” she says. “But back then, this was a completely untried business segment.”

Instead, she built Globechain’s market capitalisation on its environmental, social and governance (ESG) rating – based on impact.

“The most powerful aspect is where these items have gone and how they have helped people,” Al-Karooni says. “We reduce waste and generate impact – whether that’s fitting out a hospice, or creating a job for a refugee, or offering new skills to a former young offender. We built this product on demand – not on what we think the market wants.

“We gather ESG data to measure the impact of giving, everything from upskilling and creating employment to the classic, number of kilos diverted. We gather stories and videos from the charities, in particular, and create infographics.

“[Donor companies] can download that as CSV files. And most aren’t using that information to gain positive PR; it’s for internal comms, to monitor their CSR performance, to offset tax on cost of sales of products. Our construction clients use the data for tenders, to show how they build circularity into their supply chains.”

Globechain broke even in year three, turned a profit in year four and saw a sharp hike in demand last year. It has just landed a first round of venture capital worth “close to £1 million”, Al-Karooni says.

The money will go to grow the team.

Landfill

The figures for kilos diverted are impressive. Globechain has diverted some 5.2 million kilos of goods – more than 200,000 individual items – from landfill. The single largest listing was from a well-known DIY retailer saddled with 13,000 unwanted fitted kitchens. Seven charities took the kitchens, waste licence not required.

As Globechain grows, it will add online options to rate the taker, and perhaps move towards blockchain technologies.

“The way I see things evolving is more about our members getting more sophisticated than about Blockchain,” Al-Karooni says. “With blockchain, you can hack it; it’s also expensive, in terms of time and energy. It has to be open to everybody.

“Right now, Blockchain makes sense if you’re trading diamonds. But a charity working in a village in Africa may not have access to it. But we can definitely track items in a more sophisticated way, as the industry becomes more sophisticated.”

Moving to Holborn will help Globechain to target retailers in general and fashion sellers in particular, having secured work with Marks & Spencer, Top Shop “and a couple of very well-known designer brands – we have a lot of work in the pipeline with luxury brands”.

Target industries for the future include energy, connecting suppliers of waste material with companies producing biofuel from waste.

A serial entrepreneur, Al-Karooni previously launched a short-lived start-up that folded. “Looking back, I think of that experience as time and money spent on three MBAs,” she smiles. “That’s how much it taught me. I learned how not to run a business. It’s ego that ruins things. That, and not having the right teams.

“I’m stubborn. But having gone through the pain, I feel I understand which way the market is going. That’s helped me to understand exactly what people need and want from this business.”