Mike Cannon-Brookes pitches in as Who Gives A Crap raises $41.5m

Toilet paper brand Who Gives A Crap is flushed with cash after tapping investors including ­Atlassian founder Mike Cannon-Brookes for $41.5m.

CEO Simon Griffiths Simon Griffiths has not ruled out an IPO to fulfil Who Gives A Crap’s mission.

Toilet paper brand Who Gives A Crap is flushed with cash after tapping investors including ­Atlassian founder Mike Cannon-Brookes for $41.5m. But donations it makes to build toilets in developing countries have more than halved as online advertising rates soar.

The company has completed its first capital raising, targeting a group of “like-minded” investors who support its “mission” of ­donating 50 per cent of its profits to build toilets and other sanitation projects across the Third World.

It estimates that more than two billion people are in need of adequate sanitation and chief executive and co-founder Simon Griffiths has not ruled out a ­potential IPO to fulfil its mission, saying that, while it has donated more than $10m over eight years, there are “billions to go”.

While demand for its products soared at the onset of Covid-19 last year (so much so it was forced to not accept new orders amid panic buying, sending donations soaring 700 per cent to $5.85m), 12 months on it is a different story.

In the past year, donations more than halved to about $2.5m, highlighting how the pandemic creates opportunities but can quickly take them away. Stop/start lockdowns have forced many businesses to accelerate their online offerings in order to survive, heating up competition for digital eyeballs and overcooking marketing budgets.

“Just as the pandemic kicked off, we had some bigger than expected sales and very small marketing budgets because word of mouth was so strong through those few months,” Mr Griffiths said.

“But then through the 2021 fin­ancial year we actually found marketing was harder than what it had been previously, because all of a sudden every business is an online retailer. There’s more demand out there for ads, which pushes the price of ads up. And so the donation was about half of one year prior, due to both of those factors.”

To this end, Mr Griffiths “hand-picked” a group of investors to inject the capital required to deepen Who Gives a Crap’s expansion into other markets to generate more sales, profits and donations.

The raising also changes its strategy significantly, abandoning a “softly, softly” manner for a more aggressive approach.

Who Gives a Crap has completed its first capital raising, targeting a group of “like-minded” investors who support its ‘mission’ of ­donating 50 per cent of its profits to build toilets and other sanitation projects across the Third World.

“It enables us to go harder in the markets that we’re in. So we’re now selling in Australia, the US, UK, we opened up Europe at the end of last year, in Canada in the last couple of months as well,” Mr Griffiths said.

“This enables us to start building the brand in a slightly more heavy-handed way, rather than just relying on pure digital acquisition, which is what we’ve always done in the past. So it’s something that we’re excited about.

“It also enables us to help to build out the team to actually pave the road before we drive down it, which is going to be something that’s for us coming from a bootstraps mentality, and launch new products, which again is a very capital and labour-intensive process to work through.”

The extra cash also will be spent on helping reduce the size of the company’s carbon footprint and beef up its green credentials, which more and more investors are demanding companies show. Sustainability measures have even become so extreme that Coca-Cola can say exactly how many carbon emissions go into a one litre bottle of coke.

“Our footprint is very heavily dependent on a supply chain and making changes to a supply chain is actually something that’s very expensive,” Mr Griffiths said.

“You’re talking about shifting all of your production, freight and logistics partners over to renewable energy. That’s not something that we can do with constrained budgets.

“And so this capital gives us the balance sheet to be able to start thinking about some of those bigger investments that can help us on our path to net zero.”

Mr Griffiths was mindful of saying how much the $41.5m raising valued Who Gives A Crap, saying that information would give its competitors an edge. But he did not rule out an IPO in the future to bolster its balance sheet.

“The way that we think about that is coming back to the question of ‘what’s the fastest way to achieve the mission that we have?’ There’s certainly scenarios where an IPO could play a role in helping us to achieve our mission faster,” he said.

“That’s the set of circumstances that we potentially say ‘yeah, this is the right thing to do’. But … that’s not a question that we need to answer today because we’ve got plenty of runway in front of us to go and prove out what we want to do in the near term as a private business.”

The raising was led by Verlinvest, a family-owned investment group focused on driving growth for “purpose-led” brands including Oatly, Tony’s Chocolonely and more.

Mr Cannon-Brookes’s private investment company Grok Ventures also chipped in.

“Who Gives A Crap is an impressive Aussie underdog story,” Mr Cannon-Brookes said.

“Simon and his team have taken something so simple – toilet paper – and turned it into an impactful business, both socially and environmentally. I hope other entrepreneurs are inspired by their story of building a profitable, fast-growing business that is also environmentally sustainable.”

Other investors included Unilever chief executive Paul Polman (via Manatu Partners); Adore Beauty founders Kate Morris and James Height; Culture Amp’s Didier Elinga and Doug English; and Canva’s Cameron Adams. The round was also supported by several athletes including Matthew Dellavedova, Mitchell Starc, Alyssa Healy, Nat Fyfe, Josh Kelly, Matt de Boer and Stefan Mauk.