Greta Monstavice is the co-founder and CEO of Katalista Ventures, a Lithuanian startup accelerator working with sustainability-oriented startups that are at the product development / validation stage and beyond.
Thank you for accepting the interview and please let me ask first about your personal story. How does somebody become a startup investor?
Thanks for the question. It all started when, after my bachelor studies I took a gap year to figure out what I wanted to do and I did an internship in Spain at Plug and Play Tech Center, one of the world’s biggest start-up accelerators. This was when I first looked in the eyes of start-up founders and saw that they were literally on fire. They were so passionate about what they were doing. And I knew immediately I wanted to be in the area where they were and to support them in any way that I can.
Later I was working for a startup already back in Lithuania when we got a reach out from a customer saying what we were doing was not aligned with sustainability principles. I was the team member who got into the topic to figure out how to make it sustainable. And this was the time when I realised that
sustainable business is something that creates a positive impact but also makes money. That it is not a trade-off but something we can have at the same time.
Later I did my masters, worked with more accelerators, came back to Lithuania where I wanted to work with startups and also with sustainability, but there were no organizations or companies combining the two. So I reconnected with my current co-founder Alex who has been an investor already for years, and the rest is history.
How big is Katalista Ventures and where are the startups from that you work with?
The company has nine employees currently. In terms of startups, most of them are from Lithuania and from the Baltic region – which makes sense because we are physically here, including most of our events and business partners. But otherwise we also work with startups from the United Kingdom, from Germany; and our new accelerator event attracted participants from Sweden, Switzerland and the Czech Republic. We have no geographical limitations.
Is sustainability a good business, or you do it for ethical reasons?
The typical misunderstanding with sustainability is that from the “triple Ps” (people, planet, profit) the focus should be only on some of the three. We believe that it is important to create a positive impact on all the three areas. Every business we back is good business. But our philosophy that we try to convey to our partners is also that
with every sale you make you have to create a positive impact on people and the planet too. This is what we call a ‘Triple Top Line approach’.
How do you define sustainability in your investments? Do you have a sustainability criteria that you use to measure startups?
Our startup accelerator focuses on the very early stages: from idea or prototype phase until the proof of concept. It is very difficult to define any process in that stage. We rather work with a value system and we check if the startups that we work with share these values. Even in our own operations we work with values instead of KPIs. Every three months we have a values follow-up where we check if our activities are aligned with the three values.
What are these three values?
They are ‘Ever learning’, ‘Resilience’ and then the ‘Triple top line’. The latter one is about having a positive impact on people, planet and profit as well.
How many startups are you working with currently? Are you focusing on certain topics or sectors?
Usually we work with 2-3 startups at the same time. In the early stages where we work with these startups, the principles of acceleration are very similar in any industry. Fintech and e-commerce are the sectors that we are the most involved in, but we did work with food, fashion, manufacturing as well. The only limitation is if we see a lack of knowledge on our side with the topic because this means we cannot help and we are then fully transparent about it.
Can you share any success story from your practice?
We believe it is not only important to create sustainable startups but also to transform startups to be sustainable. We have a Lithuanian startup called Tinggly in our portfolio. Tinggly was not created in the beginning to be a sustainable startup. The essence of it is to provide experience gifts to anybody in the world. You can go on a hike in Thailand with a local guide or do bungee jumping in South Africa. But a few years ago, the founders realized the importance of sustainability, and we supported them in transitioning to work out a sustainable business model. We measured what they did, and we tried to find the negative impacts in it and to convert them into positive. As a result, they now support removing plastic pollution from rivers. They already collected 133 thousand kilograms of it, and they offset the double amount of the carbon that is emitted during the experiences that customers buy, for example with a helicopter ride. The result currently is 500 thousand kilograms of carbon offset. Also, people have the option to choose sustainable experiences and even buy ‘gifts for the planet’, which helps Tinggly remove trash from water as well as offset CO2! They have already sold 2 million of these gifts in 142 countries. This is a success story for sure.
You also work with banks. How can you help the banking sector?
Yes, we provide services for financial companies. We have a track record of matching corporates with startups, which is an amazing opportunity for the startups to test their product and for the companies to onboard innovation into the operations. We will soon have an accelerator organized jointly with Swedbank, one of the leading banks in the region and with the Rockit Vilnius hub, which hosts Lithuania’s biggest fintech community. We act as a middleman, supporting them with acceleration expertise and sustainability integration. Another way of working with banks is sustainability advisory. One example is sustainability integration in the electronic banking system. For example, when a customer wants a leasing for a car there will also be a sustainability tab where he or she can calculate the carbon footprint of their car choice.
Additionally, banks face a pressure from EU regulations that they will not be able to finance non-sustainable sectors. So we need to figure out how to make those companies sustainable.
How does the recent boom in sustainability and ESG impact you? Does it make business easier for you?
It has two sides of course. From the company side the selling has become much easier. We are practically not selling anymore but we are rather reached out by companies to support them. We do not need to explain anymore why sustainability is important, rather how they have to map their activities in the context of sustainability and how they can measure it. At the same time a lot of organizations in the region are driven by regulations. What they need to do is to change their culture so that all the employees believe in sustainability and they understand what it is. Our work is a lot about these first steps – which is a very interesting job to do.
From a startup perspective, when we started, we had to explain to startups what sustainability was and what was the sustainable version of their activity. Now startups reach out immediately with sustainable business ideas, so we are in a very lucky position to support the startups that want to either transition or create sustainable business. And that is amazing! Of course, there are still many misconceptions about sustainability, like that it is only the cherry on top, or that sustainability is just charity. But then it is always a success when we are able to show startups that
sustainability is good business and also a unique selling proposition on the market. Because, especially in our region, it is quite a new thing and there is still room for most businesses to show a sustainable version of themselves.
TOP 5 success factors for sustainable startups according to Greta Monstavice:
- Not to lose focus from financials – without good financials, there will be no possibility to spread the impact
- Thinking about resilience of your actions – from a sustainability perspective – flying with a plane is bad. BUT if you’re flying to a conference and mentoring 100 startups to be more sustainable – the overall impact is much higher and the flight facilitated me to do so. Seeing a big picture is important and then – of course – offset your flight. 🙂
- Creating positive impact not only minimizing the negative impact – the concept we call Triple Top Line (TTL). Example: pollution inside is a big problem, often 3-8 times higher pollution inside than outside. Minimizing the impact – wall paint that has no toxic materials. Triple top line / positive impact approach – wall paint that cleans the air. Also – good business, new niche, especially popular for kids rooms in reality.
- Forward thinking – we need to find innovative ways to fulfill the needs of a modern human being. We’re not going to make everyone change their lifestyles, go back to not flying or not eating seafood but we can create radical innovations in technology to try and support our ways of living and even create BETTER, more sustainable ways of living in the meantime. Example: Lithuanian-European startup LocalOcean – provides a sustainable way to grow shrimps in the continental Europe.
- Create something that solves an actual problem – is a painkiller, not a vitamin. 🙂 Vitamins get cut with the first cost-cutting initiatives and are more difficult to sell, painkillers are solving big problems and are not easily replaced.