Adore Me is opening up its operations to climate tech startups with a new accelerator

Unlike other accelerators, there’s no guaranteed investment or funding for the startups. “Equity funding and financing is not actually the roadblock that these companies are facing,” said vp of strategy Ranjan Roy. “Climate tech is a very hot space, so these companies can find funding. It’s the partnerships, the ability to show traction and scale and success that’s the real challenge.”

The first cohort includes five startups spanning digital infrastructure to “smart” materials: EverDye, Carbonfact, Commonshare, Pendulum and Epoch. As part of the accelerator launch, Adore Me’s Paris operation will become the sustainability hub along with two dedicated roles. In the coming year, Adore Me will develop an application process in place to bring new companies on, Roy said. 

Founded in 2011 as a DTC subscription player, Adore Me saw about $250 million in revenue in 2022, then was officially acquired in January 2023 by Victoria’s Secret. The deal was $400 million in upfront cash and $80 million to $300 million post-closing, based on revenue goals over the next two years. Since then, Adore Me has expanded its reach by partnering on a line with Walmart, and sales have grown year over year, representing about four percentage points of total sales growth for VS in its second quarter.

But behind the scenes, the company in 2019 started a company-wide effort to become more sustainably oriented company, like becoming the first lingerie brand that’s also a B-Corp. Beyond its own ambitions, Victoria’s Secret views its new acquisition as “a technology-led growth vehicle,” according to its fourth-quarter earnings.

While the accelerator is being officially announced now, Roy described it as a natural evolution of its partnerships with startups. It had stared working with several, including Carbonfact, Commonshare and EverDye, before coming up with the concept.

The startups in the accelerator will have the opportunity to test out their products and services at a “Goldilocks” sized company — one that has thousands of products but isn’t a massive legacy brand with fractured data or myriad supply chains. Roy said that the startups will also have the potential ability to have their work implemented at Victoria’s Secret, based on the needs and operations.

“We already know the integration pain points in the VS technology infrastructure, so being able to help advise that is something no consultant can do,” he said. 

There could be new systems and incentives like a revenue share down the road, Roy said. But the ultimate goal is to drive processes that can help other apparel companies track and trace their supply chain and calculate emissions in becoming more climate conscious.  Overall, the effort furthers Adore Me’s push to clean up its operations without necessarily marketing itself as a green or sustainable brand.

“No customer is really going to be communicated to about our dynamic life cycle assessment. It’s not really interesting,” Roy said. “But in terms of making a real impact, that’s important, and so is being able to measure it over time.”

A common paint point

From an industry-wide perspective, boosting climate tech companies that focus on supply chains is in step with how companies are beginning to assess their own operations. As potential new reporting regulations kick in and investment pressure grows, companies are looking for ways to wrap their arms around emissions data.

Research from consulting firm EY shows eight out of 10 companies are looking at ways to improve sustainability in their supply chain. Lokesh Ohri, the Americas consumer leader at EY, said supply chains contribute about 90% of a businesses emissions and at least 50% of its operating costs.

But addressing emissions can often be a struggle because of a lack of comprehensive data. There’s also no immediate ROI, Ohri said, which can make the efforts a hard sell internally. One way to circumvent that tension is to outsource to vendors with specialized interests.

“Everyone wants more sustainability and more agility in the supply chain,” Ohri said. “They just don’t know yet how to make that change happen. It’s a complex conundrum for them to shift their operations quickly, and they need partners because not everything can be done in house.”

Experimenting with new ideas

Marc Laurent, co founder and CEO at Carbonfact, a data platform that plugs into a company’s operations to help show the carbon footprint of individual items, said the information his company provides allows designers to help determine what changes they can make to drive down emissions, such as switching to a recyclable fabric. 

Carbonfact was the first climate tech startup that Adore Me began working with and served as the initial blueprint for the accelerator in early 2022. Laurent said working with Adore Me can show other potential clients that they can work with a brand that makes thousands of products a year. One of the tools it developed early on in its work with Adore Me is now used by about 80% of its customers, Laurent said.

He said that the work alone is more valuable than if someone had given his company an additional $1 million. 

“If more companies had this kind of entrepreneurial mindset, it would create more startups and better startups than if you put on the market an extra $2 billion in capital,” he said. “We don’t need money. We need ideas, we need pain points, we need prospective customers that have pain points and are ready to share them and come up with a solution.”  

Adore Me’s Roy said the benefit to Adore Me is that it can serve as a model for other brands in how to make operations more sustainable without necessarily investing in consumer-facing efforts or cause marketing. In the case of working with Carbonfact, Adore Me was able to be able to get all of its emissions data from its top three manufacturers to put in the system. The interface helped designers make changes to products for its January 2024 collection that will require 12% less emissions to product.

“There are endless press releases and partnerships,” Roy said. “But being able to show something is the hard part. In a startup that’s trying to grow, that’s the single most important currency there is.”