ADMP Investment Proposal - DRAFT

 FROM: Nga Tran, Research and Development, AMDP [All Things Nga]

TO: Clark Hansen, CEO, AMDP

SUBJECT: Investment Opportunity: LARQ

DATE: October 15th, 2024

Dear Mr. Hansen,

I wanted to bring to your attention an exciting opportunity worthy of investing in. After conducting extensive research, I would like to highly recommend LARQ, an innovative water filtration startup committed to sustainable access to clean water. We are looking to invest in companies that are socially responsible, environmentally sustainable, and profitable, and I believe LARQ has such qualities.

This memo includes:

• ADMP’s Standards

• Overview of LARQ & Impact

• Financial Health

• My Recommendation 

Before jumping in on the details of LARQ and how it aligns with our objectives, let me first briefly define the four standards we are interested in evaluating: triple bottom line, corporate social responsibility, social enterprise, and carbon footprint.

ADMP Standards

Triple Bottom Line

A sustainability framework that says an organization should focus on its environmental, social, and economic impacts and not just profits. Instead of one bottom line, there should be three, AKA the 3 P’s:

• People: the organization’s impact on its relevant stakeholders, internally and externally (e.g., employees, customers, community). 

• Profit: the organization’s impact on its shareholders and the economy. 

• Planet: the organization’s impact on the natural environment (Miller).

Corporate Social Responsibility (CSR)

A business model that integrates social and environmental aspects in an organization's activities and decision-making processes (HEC Paris). Its business practices consider a mix of the social, environmental, and economic impacts on both stakeholders and shareholders, going beyond mere legal obligations (McGrath and Jonker). 

Social Enterprise

A term for organizations that “...prioritize social or environmental goals over increasing profits” (United Way of NCA). Such organizations search for sustainable solutions in an entrepreneurial or innovative fashion to achieve their social objectives (European Commission). 

Carbon Footprint 

A measure of the total amount of greenhouse gases (indirectly and directly) associated with an organization and its activities (Selin). It is measured by multiplying the emissions factor “...by the associated activity or spend data, and the results are added up to get an estimate of a company’s total emissions” yearly (Walsh). Minimizing an organization’s carbon footprint helps curb climate change effects by reducing the amount of CO2 in the atmosphere (source). 

LARQ

What is LARQ?

LARQ is a Bay Area-based startup that aims to change the way we drink water by producing the world’s first self-cleaning, rechargeable water bottles. Using battery-powered UV-C light, the bottles purify water and eliminate 99.99999% of harmful bacteria. The company was founded in 2017 by Justin Wang after a record-breaking Kickstarter campaign, raising $1.4 million in under 30 days (Forbes).

 In 2021, the business took off after it appeared on season 12 of Shark Tank and gained capital support from sharks Lori Greiner and Kevin O'Leary. Since then, it has expanded its product line to include pitchers and bottle accessories. Within just a few years, LARQ quickly emerged in the water filtration industry as a rising competitor, influencing industry leader Brita to acquire the startup in February 2024. By joining forces with Brita, LARQ hopes to utilize Brita’s global reach to penetrate new markets and further spread its impact. 

Consumers and Community 

LARQ has a simple vision: pure, anytime, anywhere. 

The startup understands consumers want their water to be cool, fresh, and clean. Forget throwing away single-use water bottles or having to scrub a reusable one clean – with a click of a button, LARQ bottles eliminate 99.9999% of harmful bacteria from both the water and bottle using battery-powered UV-C light. In fact, an experiment conducted by Harrens Lab confirmed this statistic (source). On top of purifying on command, the bottles self-clean every two hours to ensure the water is continuously safe to drink. Having a LARQ bottle means enjoying water without sacrificing the environment or your overall hygiene. 

Additionally, each purchase gives back to the community. LARQ donates 1% of its proceeds to fund water projects and intercept plastics from the ocean, bringing safe drinking water to billions of people around the world (source). Since its founding, the startup has donated over $293,000 to such sustainable initiatives (source). 

Outside of donations, LARQ frequently partners with environmental/humanitarian organizations that share its mission of providing clean water and protecting the environment. In partnership with environmental nonprofit CarbonFund, ~586,000 trees have been planted. That’s a whole lot of green! With another partner, Well Aware, wells were built to provide clean drinking water to over 3,000 people in East Africa, drastically reducing water-borne disease rates (source).

Sustainability

As a smart water bottle company, LARQ is deeply committed towards sustainability. 

LARQ aims to drastically reduce the dependence on single-use plastics with its reusable, self-cleaning water bottles. Each bottle contains a filter that is designed to remove pollutants such as lead and can purify up to 151 liters of water, encouraging many to choose tap water over plastic bottles (source). One filter is equivalent to 300 single-use plastic bottles (source), and according to the company’s 2021 Impact Report, they have “reduced plastic waste by 3.3 million lbs” (source). Due to its innovative design and sustainability impact, LARQ won the 2022 Red Dot Design Award’s ‘Best of the Best’ category for the third consecutive year (source). 

Sustainability starts even before customers receive their bottles. In 2021, LARQ partnered with CarbonFund to introduce global carbon-neutral shipping and returns, offsetting 1,308.09 tons of carbon dioxide since then (source). To put that into perspective, that’s equivalent to driving 3.27 million miles in an average car (or around Earth 131 times)! 

Growing Sales 

As a newly-formed startup that is privately owned, there is not much financial information available on LARQ. However, 

Works Cited

European Commission. “Social Enterprises.” Internal Market, Industry, Entrepreneurship and SMEs, single-market-economy.ec.europa.eu/sectors/proximity-and-social-economy/social-economy-eu/social-enterprises_en.

HEC Paris. “What Is Corporate Social Responsability (CSR)?” HEC Paris, www.hec.edu/en/faculty-research/centers/sustainability-organizations-institute/think/so-institute-executive-factsheets/what-corporate-social-responsability-csr.

McGrath, Amanda, and Alexandra Jonker. “What Is Corporate Social Responsibility (CSR)?” IBM, 12 Aug. 2024, www.ibm.com/topics/corporate-social-responsibility.

Miller. “The Triple Bottom Line: What It Is and Why It’s Important.” Business Insights Blog, 8 Dec. 2020, online.hbs.edu/blog/post/what-is-the-triple-bottom-line.

United Way of the NCA. “Social Enterprises: Definition and Examples.” United Way NCA, 9 June 2023, unitedwaynca.org/blog/what-is-a-social-enterprise.