Social enterprises are becoming more common around here, and we like it.
If you feel that climate change is too big for you to tackle alone, then you’re right. Kora, founded in 2019 just one year ago, in Riga, Latvia, rewards individual sustainable behaviour, because it knows that together, our actions add up to the reality we’re in. Via the app, Kora tracks users’ urban mobility choices, and then rewards individuals and companies for taking emission-free transport, with its unique Kora currency (a stable, asset-backed, digital currency).
We had a moment to chat to co-founder and CEO Gilad Regev about the model of a social enterprise, how he chose this mission, the timing of their venture capital raise and top tips for future environmental entrepreneurs.
Hi Gilad! Thank you for joining us! Could you tell us the story of Kora and what your mission is?
Kora is creating the Earth Loyalty Program to fight climate change. Individuals, organizations and governments will be rewarded for performing a variety of sustainable actions.
Our collective behaviour is the main reason for climate change so we must take collective action to reverse it. Changing behavior on a big scale is a major challenge and experience shows that incentives work. People need to be rewarded for changing their behaviour, otherwise they won’t do it.
We put a monetary value on carbon reduction, instead of on carbon production. The world is addicted to GDP growth and we want to provide an alternative. So instead of punishing people for every kg of carbon they emit, we want to reward them for every kg of carbon that they save.
What makes Kora unique?
There are a few companies that allow you to buy carbon offsetting on a small scale, as an individual. And there are a few apps and services out there which help you track some of your activity, like walking or running. Some of them offer a limited selection of incentives like discounted Spotify membership.
We’re the first to do all three in a comprehensive way. We not only help you track your total carbon footprint in real time, but we also to reward you for it with points, basically a currency, that you can spend online, and we offer an offset subscription. So you can get rewarded for a good carbon score, offset a bad one, and gamify your personal carbon journey. Nobody else does that.
Given that there are so many ways to ‘do good’, how did you choose this one?
Climate Change requires a scalable solution. Planting one tree at a time, installing one module of solar panel, a wind turbine, cleaning the ocean from plastics, and so many other incredible actions that so many people are taking are very important. I am supportive of these initiatives and developments out there.
The problem is that people feel alone, like their actions don’t matter. There is no positive motivation to keep going, and it’s hard to see what you do as an individual making a difference on the global scale. Kora shows people how much their actions matter, keeps it motivating, and shows you where you are on the global scale.
We need a fast track and scalable solution matching the scale of the problem we are facing. As long as the carbon economy is so profitable and continues developing, humanity will continue to chase a moving (CO2 increasing) target, and therefore we choose this massive scalable solution.
You are founded in Riga, Latvia. Could you tell us what it’s like to start up there?
Latvia is full of potential. The population is smart and educated, very cultured, and proud of their cultural heritage. It’s not a crowded startup market, so the whole atmosphere feels very pioneering. The energy around the startups here is immense, and they’re very supportive of each other. There’s very little cynicism here among the startups. Nobody acts like they’ve seen it all before and done it all before. And the government is starting to get it, with new incentives and even new tax schemes for people who work at startups. So, hopefully, it will get bigger and better.
Recently you raised venture capital funds. What made you decide it was now the right time?
We’ve been working on this idea for a long time, and it always felt slightly ahead of its time. Reactions were always, “Nice idea, BUT…” and in the last year or so the reactions have been, “Nice, idea, AND…”
Mainly it’s because the climate change problem is now much more top of mind for people, and partly, with that awareness, comes a sense that OK, we know it’s a problem, now what do we do? People are looking for a clear direction and they feel like their individual actions don’t make a difference. Kora shows a clear direction, and shows people that their actions make a difference, and how they make a difference, and exactly how much of a difference they make. People are hungry for that, which they were not before.
To date, Kora raised over €800K as pre-seed and seed capital. The funds are needed to accelerate the development of our app and for marketing and customer acquisitions. Time to market is crucial, and as I always say, climate change is not waiting – we need to act now. We are currently working on finalising our seed funding and raising an additional €500K. Besides, we will launch our subscription model in March, allowing our members to, personally, offset their carbon footprint.
For you, what are the main challenges of running an “impact-driven” business?
Impact driven business, especially dealing with carbon reduction, needs to deal with confusion, which is a result of so much information and opinions, fears, and lack of understanding about climate change.
On the one hand, there are many scientific resources. On the other hand, in the era of social media and endless sources of information, it is close to impossible for an individual to sort out. Many people feel helpless and think that they cannot make any impact, so why bother? The timing for Kora couldn’t be better as the awareness is massively growing (as well as the risks), and people are looking for real solutions.
The main challenge was how to create a simple, engaging, and empowering tool allowing consumers to start acting on their carbon reduction and offsetting immediately – we believe we found the magic formula and will launch it this coming spring.
The other issue with impact-driven businesses is that there are so many self-proclaimed experts who will tell you, “there’s a much better way of making the impact you want to make”. Nobody says “there’s a much better way of making the profit you want to make”, but everyone has an opinion about how to make an impact.
How do you manage the balance between driving revenue and doing good?
It didn’t start as a business idea. It started as a passionate personal vision to help stop climate change, and a business is simply the best structure to make that vision happen, rather than a charity or an NGO. I started Kora as I am a worried father for four amazing children and felt it is my responsibility to act for their and their generation’s well-being.
Revenue is a necessity for developing a sustainable business, and it’s not a binary choice between earning revenue and doing good. Revenue shows that people value what you do. The idea that you can only be good if you have no money and no resources is ridiculous, because it means you can’t get anything done. So you sit at home being good, how does that help the world?
The ways that we earn our revenue is by helping people to do good things, and rewarding them for these things. There’s no conflict with doing good. We’re selling a framework for meaningful personal action that connects you to meaningful collective action, and that’s a pretty good thing to sell.
In my opinion, we can balance doing good with making a profit, and should not go into extremes as they are not sustainable.
Finally, what advice would you give to any budding social or environmental entrepreneurs out there?
Social and environmental entrepreneurs are no different than any other entrepreneurs. They need to focus on resolving real problems, developing a product/service which fits the market, and scaling it up. I assume we all heard that so many times from my experience, what makes entrepreneurs so unique are two key characteristics: 1) a burning desire to make a change; and 2) the capability to deal not only with endless difficulties and fast-changing situations but mainly the ability to cope with the fear of failure.
And, just like other entrepreneurs, social and environmental entrepreneurs need to deal with the human problems of running a team, building a group of people who are diverse and still support each other, managing egos, managing expectations and motivations. That’s the same for every entrepreneur, although it’s especially important when the people in your company come together because they believe in the vision, not just collecting a paycheck. They get very passionate, and whilst that’s a great thing, it also needs to be managed.