World Of Good Aligns Profits, Deeds
VentureWire
Feb 17, 2009
By Tomio Geron
Helping the developing world may be an afterthought for many growing businesses, but it's a central mission for World Of Good Inc.
The start-up connects small artisan producers from countries in Asia, Africa and Latin America with consumers in the U.S. It uses international networks to source the products and various organizations to screen the producers to ensure that they meet standards such as fair trade, local wage standards and environmental quality.
The Emeryville, Calif.-based company has raised a total of at least $5 million in financing since its founding in 2004 from Draper Fisher Jurvetson and Omidyar Network, including a $1.1 million follow-on in December 2008, according to regulatory filings.
"Customers are thinking more carefully about everything they're buying and want more for what they spend," said Priya Haji, a co-founder of World of Good. "In some cases that means the lowest price, in others they want to feel good about what they purchase and know that it actually benefited the community it came from."
World of Good, founded by UC Berkeley business school graduates, started off sourcing goods for brick-and-mortar stores in the U.S. The company creates custom product lines of handmade goods including houseware, jewelry and clothing for retailers under its Original Good brand, with products coming from more than 30 countries. Customers include eco-friendly grocery store chain Whole Foods Market Inc. and Follett Corp., which operates college bookstores nationwide.
In September, the company launched an online marketplace, WorldofGood.com, with eBay Inc. On this site, powered by eBay, a much larger number of small producers can sell their products directly to consumers. The site provides detailed information about the producers and how they are made, and the products are cross-listed in normal fashion on eBay.com.
World Of Good uses third-party organizations, called Trust Providers, to ensure the producers meet certain standards. These groups include Transfair, Co-op America and the Rainforest Alliance. The company also uses a service called FairWageGuide.org to determine if the wages of the producers of its products meet international wage and poverty line standards.
Consumers - especially women, who are the company's target audience - are interested in making their purchases have a social or environmental impact, Haji said. And that trend is increasing in food, consumer products and automobiles.
"They are looking for purchasing choices that can really enhance their impact on the world," Haji said.
World of Good takes different roles working with the international producers. For the wholesale products that it sells to brick-and-mortar retailers, the company takes a much more active role, including working on pre-financing inventory, micro-finance, design and technical support. The Web site is open to a wide group of producers - currently in more than 70 countries - with World of Good taking a less hands-on role.
While making a profit and helping distant producers may not always be seen as similar goals, Haji said it's possible, especially if that is what consumers want.
"These things are highly aligned...as long as you clearly understand your consumers and build in a practical, implementable way," Haji said.
Likewise, eBay wants to make sustainability-based organizations a growing part of its business. It charges standard fees on World of Good products.
"The best way to create a positive impact on the sources of the products is to create a sustainable, profitable business," said Robert Chatwani, co-founder and general manager of WorldofGood.com by eBay.
EBay has been interested in moving into so-called ethically produced and environmentally friendly products for some time and decided working with a partner was better than trying to build it themselves, Chatwani said.
"When we started thinking about the best way to enter this market, we decided a partnership with a company with a lot of depth of expertise in this industry was the way to go," he said.
The company founders have been impressive in getting big partners and customers signed up, said Scott Lenet, managing director of DFJ Frontier.
Lenet invested in the company not primarily because of its social impact, but that was a nice benefit.
"If the team is able to keep executing its plan, the results will be a very attractive for-profit company," Lenet said. "The
social element of the deal is secondary to the fact that we expect this will be a great business, but it is obviously something we feel great about."
For World of Good, the connection with eBay was also logical, given that Pierre Omidyar, who is the founder of Omidyar Network, is a founder of eBay with deep ties at the company.
Both Omidyar Network and eBay also have been active in socially oriented ventures. EBay has a global citizenship program, including a microfinance unit, charity auctions and other environmental initiatives, while Omidyar Network has invested in a range of developing world projects in addition to the firm's technology investing.
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