MSIV Invests in Larkspur’s Novi

Q&A with Co-Founder & CEO Kimberly Shenk

Wednesday, April 27, 2022 from Larkspur, CA

In 2021, Marin Sonoma Impact Ventures launched the North Bay’s first regional venture capital fund and began deploying capital into Marin + Sonoma’s most promising startup companies.

Today, we are excited to publicly announce our investment in Larkspur’s Novi, a software platform that is enabling the future of transparent product development.

Novi partners with emerging brands, established retailers, and everyone in between to help make the development of products more transparent and sustainable. Their B2B marketplace enables brands to design and purchase verified formulas, fragrances, and packaging — all with the purchasing power of a large CPG. With access to 100+ sustainability standards and claims, brands can guarantee their finished products align with their values and are better for people and the planet.

We were thrilled to see TechCrunch cover Novi’s latest funding round here and shine the spotlight on one of the North Bay’s most exciting startup companies.

Why We Invested

The next generation of consumers is demanding a level of transparency and sustainability that wasn’t contemplated even a decade ago. Yet, as brands race to meet these fast-changing expectations, many are finding that wanting to ‘do the right thing’ is harder than it should be. The existing supplier ecosystem and chemical supply chain is highly opaque, fragmented, and non-digitized, meaning that achieving transparent and sustainable sourcing is extremely difficult even when the brand’s intent is there.

Enter Novi, which has built an easy-to-use online tool and marketplace that helps brands determine whether their raw material inputs meet their desired (and oftentimes bespoke) requirements. 

We are excited about the path Novi is taking because, at its core, Novi is a data company, and any solution to this challenge must start with understanding and mapping the countless inputs in a very complex global supply chain. Each year, there are an estimated $5 trillion worth of transactions occurring in the global chemical trade. Novi’s transparency, sustainability, and data-first solution differentiates it from a legacy system where product catalogs often live offline and ingredient data is too often inaccessible.

The opportunity is massive, and Novi’s approach is needed in an industry where sustainability and transparency have been afterthoughts for way too long. MSIV is privileged to be supporting the team on this journey to remake raw materials sourcing and we are thrilled that key components of this effort are being driven out of Marin County.

Novi team at a recent offsite gathering

MSIV Founder & Managing Partner Zachary Kushel sat down with Novi Co-Founder & CEO Kimberly Shenk, a resident of San Rafael, to discuss the inspiration behind Novi and all that is ahead as they work to upend this historically opaque industry.

ZK: What was the moment for you when the light bulb went off in your head saying you had to go launch Novi?

KS: I have been a data scientist my entire career, but I’ve also had this other side passion for sustainability, the environment, and human health. This dual-interest led me to launch NakedPoppy, because I wanted to leverage data to bring better beauty products to market. While I was building this company, I uncovered that navigating the complexity of manufacturing sustainable products was a data problem at the core of our desire to bring these better products to life.

When you think about the inputs and materials it takes to build a physical product, it’s very complicated, requires lots of information, and the information is all over the place – it’s messy. I got so excited to dive into this problem for our brand, which really spoke to my passions and the mark I wanted to leave on the world, and I concluded I couldn’t let it go and wanted to help other brands solve this same problem, and this became Novi.

Novi Co-Founder & CEO Kimberly Shenk

ZK: Tell us more about the manufacturing supply chain today – what is broken and how is Novi changing the game?

KS: The industry has traditionally operated by word-of-mouth, trade shows and sales calls – it is relationship-driven and you typically buy from who you like and trust. Sure, technology has always had the potential to disrupt this way of doing things, but new sustainability requirements are really the core reason this old model has stopped working. There now needs to be credible information backing up your claims – it’s no longer good enough to say, “Oh, don’t worry, this is natural” or “Sure, this is biodegradable.”

This has opened a wedge because there is now a growing consensus that the industry can’t operate the way it used to. Products are being developed in a new context, where transparency and sustainability are core, and the traditional channels don’t support the new type of development. Novi allows brands to operate efficiently and with sustainability front and center – not only do we harness the power of technology, but we allow brands to feel confident they are meeting their standards.

ZK: How quickly is the global marketplace moving to sustainable sourcing?

KS: This entire shift is being driven by consumers and many of the changes are generational. We are seeing, for example, that for Gen Z, sustainability is table stakes – it’s not a marketing ploy, or a tactic, but at the core of how they make buying decisions, and we are seeing the entire supply chain recognizing this and adjusting because they want to be relevant in the future. Dow Chemical is now building out an entire new category to address the spike in demand from their customers for sustainable ingredients.

Whereas in the past you might have seen a significant pricing markup to meet a specific standard, we are seeing pricing converge because more and more brands are asking for the sustainable ingredients. Meanwhile, suppliers are reallocating their R&D resources to develop materials they can sell into this changing environment, meaning the overall shift is accelerating, and it’s all being driven by the consumers.

ZK: You are an Air Force Academy graduate and former officer – how has that background shaped your leadership style as a startup CEO?

KS: I started at the Air Force Academy when I was 18 and essentially entered a leadership school – our entire curriculum was built around this idea of leading and operating high-performing teams. Post-graduation, I got to apply this training as an officer and worked for some incredible leaders, including the three-star general in charge of the Pacific. I learned so much from witnessing how to operate when you literally have thousands of people under your command. 

Startups can be notorious for a lack of leadership and a lack of understanding on how to manage and build teams given the fast-changing environment. I’ve really enjoyed taking on this challenge and am focused on building a lasting and highly efficient enterprise from a people perspective, which many startups overlook in their early days.

ZK: What does it mean to you to be a Marin entrepreneur? What might the path forward look like for Novi in this community?

Kimberly and her family

KS: Honestly, I never thought it would be possible to build a company here, and it’s very exciting. It does feel like this is the early days of a new wave with so many talented people having relocated up from San Francisco. People gravitate to the North Bay for the beauty and the nature, and at the same time, we’re seeing an evolution in terms of more companies being formed that care about sustainability and the environment.

Marin is such a great location for Novi because our values are so aligned with those of Marin residents. It’s also why we’re so excited to have received this investment from Marin Sonoma Impact Ventures – there’s a growing group of us here who want to build a more thriving community in Marin and make this less of a bedroom community. Our kids are growing up here, we see ourselves here forever, and a more vibrant future needs a strong local economy to support it. I’m so excited to live here and for our family to strengthen our roots here.

We’re eager to find others from the community to join Novi as we push ahead. If you have always wanted to find a company that has a passion for helping the climate and planet, and you are motivated to work where you live and be engaged in your community, please reach out to us as we’d love to meet you.

Zachary Kushel is Founder & Managing Partner of Marin Sonoma Impact Ventures.

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