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Branson-Led SPAC Takes Startup Public Eying A Plastic-Free Future

Virgin

Richard Branson has had his fingers in many different pies since founding Virgin Records more than 50 years ago. After diversifying everything from airlines and telecommunications to TV and space travel, the British billionaire is now moving into sustainable retail with a new investment in a San Francisco startup that aims to be plastic-free by 2025.

Grove Collaborative is an online retailer and Certified B Corp startup that creates and sells natural home and personal care items such as soap concentrates, food supplements, multivitamins, compostable wet wipes, all-natural pests sprays, reusable sandwich bags, and bamboo toilet paper.

Photo Courtesy Grove Collaborative

All the products Grove sells – including its brand and third-party brands – have been vetted for sustainability, efficacy, and supply chain practices. The company claims to be the world’s first and only plastic-neutral retailer, and its goal is to be plastic-free by the middle of this decade.

Photo Courtesy Grove Collaborative

Branson entered the picture in December 2021 when his company, Virgin Group, sponsored a special purpose acquisition company (SPAC) to take Grove public. The SPAC, called Virgin Group Acquisition Corp. II (VGII), will merge with Grove following an expected initial public offering sometime this year. The combined company will continue to operate under the Grove name and trade on the New York Stock Exchange under the “GROV” ticker symbol.

The deal was reported to be valued at $1.5 billion, which is a testament to the retailer’s growth trajectory. Grove has already signed on more than 1.5 million customers a decade after being founded. It posted 2021 revenue of $383.7 million, up 5.3% from the previous year. But it continues to operate at a loss, which might be one reason the company reportedly laid off 17% of its staff in March.

Grove’s business model is built around making it easier for consumers to switch to healthier and more sustainable routines by offering flexible monthly deliveries. It creates and curates over 150 brands that must meet a four-point standard: healthy, effective, ethically produced, and cruelty-free.

The company is led by CEO Stuart Landesberg, who co-founded Grove in 2012 with a mission to run a successful company while also helping the world reduce its reliance on plastic. As the Grove website points out, 76 million pounds of plastic packaging are created by U.S. companies every day, but only 9% of plastic gets recycled no matter how much is placed in recycling bins. About 24 billion pounds of plastic enter the oceans yearly, killing more than 1 million marine animals. 

Photo Courtesy Grove Collaborative

“Our industry is so big and in need of such massive change,” Landesberg said in an interview with Fast Company. “Plastic recycling is actually a myth that was created by the petrochemicals lobby to make us feel okay using this substrate that’s really cheap to create but lasts forever.”

All Grove orders are now plastic neutral, meaning that for every ounce of plastic customers buy, Grove collects and recycles the same amount of nature-bound plastic pollution. The company does this in partnership with rePurpose Global, a platform dedicated to reducing waste and restoring nature’s balance. Grove orders already have removed nearly 10 million pounds of plastic from nature. 

One challenge when it comes to reducing the world’s plastic is figuring out how to replace the standard plastic in everyday items ranging from soap dispensers and kitchen sponges to toothbrush bristles. To help meet the challenge, Grove founded the Plastic Working Group to share best practices and innovations across the industry, and more than 70 brands have already joined the organization.

Branson’s interest in Grove stems from a Virgin Group policy that any new investments must help better the world. He also sees a parallel between Grove and his Virgin Atlantic airline, which succeeded against much bigger and more established rivals.

“Because we were better than British Airways, people sought us out,” Branson boasted to Fast Company. “The best almost always survives.”

Photo Courtesy Virgin
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