A Brisbane startup described as a “Fitbit for your waste” has raised $1 million to level-up from its consumer-facing offering into industrial operations, following years of research and development (R&D) to overcome the messy, unavoidable challenges of mixing electronics with waste.
Monty Compost founder Ashley Baxter recognises her sustainability tech company has moved slowly since 2019 in a market where entrepreneurs are encouraged to “move fast and break things”, to quote Facebook founder Mark Zuckerberg, but claims the latest raise validates her patient conviction to get the product right.
“Relative to the amount, this has been the easiest investment round for me to raise,” says Baxter, who only has one other full-time staff member, chief technology officer (CTO) Junior Joyce.
“Everyone says it’s such a hard time, but I think the reason why it was so much easier this time to get amazing new investors and existing investors on board is because what we're doing is so practical and real, while still being a major commercial opportunity.”
The latest round was led by Skalata with participation from Antler as one of its first investments via a new partnership with the Queensland Investment Corporation (QIC), as well as a follow-up investment from early supporter UniQuest and angel investors.
These backers join others such as Brisbane family office ACAC Innovation, Mandalay Ventures Partners and climate angel syndicate EnergyLab.
“In previous years every investment had to be ‘pie in the sky’ and really out there, but this has been very straightforward for us because we’ve spent the past five years proving what we’re doing,” she says.
She describes Monty's early years as living "hand-to-mouth", but what helpedher get throughthat period was a sense of belief and passion to solve a glaring environmental problem.
“The core problem in our food system is that all our nutrients and all our carbon is just being extracted out of these natural systems and not being restored to it,” the entrepreneur explains.
“If we recycled all organic waste back into our food systems, we could cut over 14 per cent of global emissions through all these second and third order effects that it has, and it’s such a simple solution.
“Why aren’t we all doing it? The big problem is just the efficiencies, or lack thereof, in processing this organic waste. It’s still an industry that’s stuck in the stone age because in the past it’s been cheaper to send to landfill.”
Her mission was to bring modern technologies of Internet of Thing (IoT) data analytics software to the seldom-disrupted space that is organic waste recycling.
“I think the reason why what we're doing in this space is so innovative, and why there really aren’t that many movers, is because it’s this big stinking pile of food waste. No one really wants to work in there,” he says.
This olfactory description is fitting for the difficulties of putting her idea into practice.
The first prototype had a 100 per cent failure rate in the field, but through iteration after iteration Monty Compost was able to build a consumer product that works, providing real-time essential data on compost such as moisture, temperature and gas levels – information that helps to optimise thecomposting process for experienced and novice composters alike.
“If you imagine putting your phone into the bottom of a wet, disgusting rubbish bin, it’s not going to last long in there and that’s pretty much the same with all electronics,” she says.
“It’s a pretty good thing that we only produced 20 of the prototype, and then we pressed on and did 100 MLPs (minimum lovable products) and they worked.
“Now that that’s worked with individual consumers who havemuch lower operating requirements, only now are we expanding into higher-risk industrial facilities.”
The company has started its first commercial project with an industrial composting facility, while Monty is also targeting a range of industrial facilities like agricultural composters, councils, and businesses involved in organic material like biogas.
Whilst some business experts would caution against doing both business-to-consumer (B2C) and business-to-business (B2B), Baxter has found multiple cross-over benefits from the approach.
From the very beginning she knew that industrial applications would be the best source of growth for the long-term, as in consumer electronics to get high percentage growth “you have to be just dumping money into ads”.
“But it turned out that the consumer was a lot easier to get at least those initial units into, and there have turned out to be a lot more benefits in developing firstly as a consumer product,” Baxter says.
“I would say the biggest one is the efficiencies in pre-purchase, post-purchase, logistics, assembly, all those things that are absolutely essential for consumer products that a lot of companies that go B2B first don’t think about, and then they really face problems when they’re scaling up.
“We're able to deliver a much higher amount of value, and we're not struggling and stumbling over the usual expansion teething issues.”
The consumer-facing product has also given the company inroads to prospective industrial customers.
“We have some clients in our pipeline who literally found out about Monty because they bought one for their home compost and they found out about our new product initiative,” Baxter says.
Baxter is very grateful to early believers like UniQuest that were “transformative” for supporting R&D and building a viable business model.
Baxter says that had the company foregone the industrial expansion, she is confidentthe consumer-facing product would now have reached a technical break-even point financially.
“But we’re about the mission and growing it. We identified this industrial opportunity existed, and so this investment is for the scaling up of that in terms of our path to profitability,” she concludes.
“With our first release of the industrial product, we'll be working towards achievingtechnical financial profitability within 12 months.
“But it’s more so following a larger growth strategy of which markets we want to enter, whether we can achieve it with the funds we have raised, and what’s going to give us the return in that 12-to-18 month runway.”
