Whirli raises £4m Seed funding round led by Octopus Ventures
A sharing economy for children’s toys, Whirli helps UK families get better value for money, reduce clutter at home, and reduce landfill waste.
London, 15 December 2020: With Christmas just around the corner, Whirli, the toy sharing subscription service, is delighted to announce that it has raised a £4m Seed funding round led by Octopus Ventures, with participation from MMC Ventures.
Circular economy toy trends
The toy industry is a giant sector with annual global retail sales of ~£70bn. It has however faced a decade of challenges and stagnation, culminating with the collapse of Toys R Us in 2018. Whirli has caught the interest of venture funds for its different approach – one that promotes sustainable consumerism, appealing directly to Millennial and GenZ parents.
Today’s parents are far more engaged with the circular economy and how they can take advantage of better value for money, convenience, and flexibility, whilst reducing their environmental footprint. Venture investors have increasingly sought to capitalise on this trend across all sectors, anticipating that these new consumption habits represent the next revolution in retail and eCommerce.
How Whirli Works
Whirli is a fully managed retail service for children’s toys. Like other retailers, Whirli purchases toys directly from leading toy manufacturers. However, Whirli subscribers borrow these toys instead of purchasing them. Any unloved or outgrown toys can be sent back to Whirli and swapped for something else. By borrowing, parents are getting far better value for money, reducing their environmental footprint, and their children are getting more varied play time.
Underpinning their business is Whirli’s proprietary technology platform which today tracks over 50,000 toys as they circulate between households. Unique customer features, such as Whirli’s gifting service, enables the platform to fully cater to how parents (and family or friends) shop this category. Its technology also focuses on streamlining the reverse logistics operations, as all toys come back to Whirli’s own facilities for inspection and sterilisation before being sent out for a new family to enjoy.
Toy Waste Research
Every year, millions of families across the UK spend a total of £5bn on children’s toys only to see them go unloved very quickly. These toys clutter up homes and the majority eventually end up in landfill. Research commissioned by Whirli in 2019 found that:
● Parents spend around £300 per year on toys for their own children, yet on average around 60% of toys at home are unloved and not played with.
● Over Christmas, around £135 is spent on toys per child. However, by the end of January one in four Christmas toys will already be neglected, equating to 32 million unloved Christmas toys across the UK.
● Gender stereotyped presents were the most common gifts parents received but did not want for their children, followed by age-inappropriate gifts, gifts their children did not like, and gifts that duplicated what parents already had.
Whirli’s future plans
The £4m Seed funding round announced today will support Whirli’s plans to expand their customer offering as well as continue investing in their proprietary technology. A key area of focus will be supporting parents on child development and learning through play, customer personalisation, as well as applications of data science using the ‘feedback loops’ inherent in circular economies.
Today is a significant step taking Whirli closer to their vision of being the go-to place for parents wanting to consume more sustainably and ethically without compromising on value for money, choice, convenience, and flexibility.
Nigel Phan, Founder at Whirli, said:
“Consumers wanting to shop sustainably should not have to compromise with higher prices or greater inconveniences. We’re really proud to be at the forefront of this technology-enabled disruption that is reshaping consumer behaviour and retail. Through the power of the sharing economy, Whirli has created a winning proposition for parents and for the planet, and we are delighted to welcome Octopus Ventures and MMC Ventures on our journey.”
Rebecca Hunt, early stage investor at Octopus Ventures, said:
“The toy market is huge, but it remains mostly stuck in the dark ages of e-commerce 1.0 and offline retail. We believe there is a real opportunity for a new entrant like Whirli to disrupt with a new approach. What’s particularly exciting is that Whirli is good for parents and the planet. By enabling parents to ‘borrow’ only the toys they need for their children’s current life stage they avoid the clutter and expense of toy ownership, while the planet benefits from removing the toxic cycle of cheap plastic toys being purchased which then end up in landfill. The latest generation of parents are also much more comfortable with the sharing economy and recognise the benefits of borrowing rather than owning. We believe this will transcend to the toy category, particularly as more of the GenZ generation begin to have families of their own. These are trends which make now a great time to scale a business like this and we’re delighted to be working with Nigel and the Whirli team to help make it happen.”
Dele Akinyemi, investor at MMC Ventures, said:
“Whirli enables parents to make more ethical and sustainable choices in a large market that has seen limited innovation to date. We have been impressed by Nigel and the Whirli team and we are looking forward to supporting them as MMC continues to invest in companies helping to create a more circular economy.”
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● The world’s first fully flexible sharing economy platform for children’s toys.
● Founded by Nigel Phan in 2018 and with full public launch in March 2019.
● Starting from just £9.99 per month, parents can choose toys from a wide range of categories and brands including Le Toy Van, Melissa & Doug, Fisher Price, VTech, Micro Scooters and many more.
● Toys can be played with for as long as they are wanted and can be returned to Whirli to be swapped at any time.
● Any toy that is kept for 8 months can be kept forever, at no extra cost. Or can be bought from Whirli at any time for a less-than-retail price.
● Latham & Watkins supported Whirli on the Seed funding round.
About Octopus Ventures
Octopus Ventures, part of the Octopus Group, is built to specialise in the four areas we believe will change the world for the better: health, money, deep tech and consumer.
We have backed the founding teams of nearly 120 companies including Zoopla, Secret Escapes, graze.com, tails.com, Swiftkey, Elvie, Depop, Sofar Sounds, Big Health, Bought By Many, ByMiles, OLIO and Cazoo.
Some of our portfolio companies have gone on to join forces with the world’s largest businesses including Google, Amazon, Microsoft and Twitter.
With £1.3 billion under management and investing over £100m a year, Octopus Ventures is one of the largest and most active venture investors in Europe. Our typical investment is from £1 million for Seed to £10 million for Series B and we can continue to fund the companies we back right through to IPO.
We are based in London and New York with a network that spans from San Francisco to China. The companies we back become a part of this network, with access to a formidable resource of experience and expertise.
Our investment focus:
● Future of Health: Transforming the health industry, from digital therapeutics through to biotechnology.
● Future of Money: Revolutionising society’s ability to exchange and allocate financial resources and risk.
● Deep Tech: The tools and technologies that will power the next industrial revolution. These include quantum computing, robotics and drones, sensory human augmentation and 3D printing.
● Consumer: Reinventing the everyday, in how we live, work, travel, play, rest and recuperate.
About MMC Ventures
MMC funds and helps scale technology companies that are transforming today’s markets. It has been backing transformative tech companies from the Seed and Series A stage since 2000. MMC commits to a deep understanding of each company’s underlying technology and business model to help make better decisions and be more effective partners.
Transformative technology companies MMC has backed to date include Gousto, Interactive Investor, NewVoiceMedia, Current Health, Signal AI, Bloom & Wild and Peak.
Explore MMC’s research and other actionable insights at www.mmc.vc.