A startup that rewards users for recycling has raised €4.1 million ($4.7 million) in fresh funds as it plans to expand into the UK and the US.
Sweden-based Bower offers users money, discounts, or coupons when they recycle correctly. The company's technology enables users to scan all consumer packaging with a barcode from parcels to milk cartons. The app then tells them what material it's made from and where to recycle it.
Users then check into the app once they're at a registered recycling point, which is verified using GPS data, and collect rewards based on what they have recycled. Bower also allows users to set up recycling points in their homes, meaning they can also get rewarded while using their own bin.
The startup was cofounded in 2015 by brother and sister duo Suwar Mert and Berfin Roza Mert. The pair first launched Bower as a deposit scheme for plastic bags, inspired by Sweden's PET bottle deposit scheme, but went back to the drawing board when they faced scalability issues.
Suwar Mert said he was grateful for the setback as it enabled Bower to expand into all types of packaging, rather than just plastic bags.
"In order to achieve this circular economy which everyone is talking about, we need to give things a value," he told Insider.
Mert also said there was a considerable amount of education still needed around how to recycle. He said that different areas boast different rules for recycling and that there is general misinformation around topics like whether or not jars and yogurt pots need to be cleaned before they're disposed of.
If the product is made by a partner brand, such as Nestle, L'Oreal, or Johnson & Johnson, the app will tell users how to break down and sort the different materials in the package. For example, a product could be made of plastic, paper and aluminium. This information comes from the producer, which also provides data on the carbon emissions that are saved for recycling the item.
Cash rewards can be sent directly to the user's bank account, to a friend, or given to charity. Over €12,300 ($13,552) has been donated to charity through Bower so far, the company said. It also claims to have helped save over 1,000 tonnes of CO2.
Long term, the company wants to expand into recycling electronics and textiles as society moves towards a circular economy.
The fresh funds will be used to enter the UK market, and then the US. Mert is set on "proving" the business outside of the Nordics – a concern he heard from some investors.
The Bower app will be tweaked in different geographies to encourage usage, the cofounder said. "In the UK, maybe we need to gamify our app more," he added.
Bower also plans to double its headcount to 40 people by the end of this year, Mert said. The round was led by Swedish investor blq Invest. Existing investors Almi Invest GreenTech, Verdane Foundation, and Orkla Ventures also participated in the round. It brings the startup's total raised to €5 million ($5.7 million).
Check out the 17-slide pitch deck Bower used to raise the fresh funds below.