After a confusing trip to the store to buy an air filter in 2012, two N.C. State University, Thad Tarkington and Kevin Barry, came up with the idea of making this routine home maintenance purchase a subscription-based business. The following year her startup FilterEasy had several hundred subscribers. Fast forward to now, and this service – now called SecondNature – has expanded its customer base to hundreds of thousands by including industry partnerships beyond its original direct-to-consumer model.
Today, the company from the NC triangle announces that it will receive 16.4 million Series C financing through its corporate venture group through new corporate group groups, including the strategic investor MANN + HUMMEL. USD has completed.
Other investors in the round are IDEA Fund Partners, Multiplier Capital, Lead Edge Capital, Arsenal Growth, One Better Ventures, Bonaventure Capital, the WIN State investor network from NC State and the CAN investor network from UNC.
SecondNature started life by solving a common problem for homeowners: to help people remember to change the house’s air filter. This is often a forgotten task because, unlike some other household products, there is no built-in reminder or warning system to signal when the filter time has expired. Your smoke alarms will sound when the batteries are weak. Lightbulbs go dark when it’s time for a change. But air filters just sit there and quietly collect more dust if your air quality deteriorates and your energy costs rise.
According to Tarkington, the idea of subscribing to air filters not only made sense to remind homeowners to do the swap, but the model also worked for retailers.
“It is a product that is not really well suited for retail because it is large, takes up a lot of space and is easily damaged,” he says. “And in general there are thousands of different sizes so a retailer can only serve a certain percentage of the market.”
The founders soon left college and began working full-time in the company. They later participated in The Iron Yard Accelerator and raised $ 1.2 million in seed capital in 2015.
While the startup’s customer base of homeowners grew steadily, SecondNature found that more channels than just Direct-to-Consumer (D2C) alone were needed to increase sales. In the following years, the company began to work with industrial partners, including HVAC companies, real estate agents, utilities and commercial properties. These categories have contributed to customer growth, but D2C remains the largest given its lead.
The latest investment signals from MANN + HUMMEL, where SecondNature is going next. The company no longer sees itself as just an easier way to get your air filters. Instead, it is now positioning itself as a “home wellness” brand, which eventually includes a range of products that homeowners have to replace on a regular basis.
For starters, this includes SecondNature’s newest product line: water filters.
“When we started to grow, we found that people really appreciated the convenience of [our business]”Tarkington says. People also started talking about other things, like filters to help with allergies and create a healthier home environment,” he notes.
“We saw this big trend in personal care – like what we put in or on our body,” explains Tarkington. “We spend a lot of time in our homes, so our indoor air quality and what we drink has become very important from a water quality perspective.”
It therefore made sense to extend the concept of a “healthy home” to water filtration.
In the second quarter of 2020, SecondNature will introduce its first two products in this water filtration area, which contain filters for your refrigerator water. On the one hand it is about improving the taste, the quality and the clarity of the water, on the other hand it is more about filtering out harmful particles from local water systems.
In the future, the company plans to use everything that improves the health of your home, says Tarkington.
However, in the near future, after the outbreak of COVID-19, SecondNature could benefit from increased interest in home health products. For example, SecondNature’s MERV 13 “Catch All” filter can reduce the likelihood of getting flu or a viral infection if someone in your home is sick. This is because about 87% of the droplet cores that pass through can be collected. (To put it bluntly, this is not COVID-19 prevention. It’s about risk reduction – like washing your hands or sneezing in your elbows.)
While some areas of the SecondNature business have been significantly impacted by COVID-19 – such as commercial properties that may be renting longer – Tarkington says the overall business is good.
“In general, the demand for the product has increased due to the nature of the product,” he says.
However, it should be made clear that SecondNature is not targeting consumer concerns due to the outbreak. Instead, it tries to help. The team has coordinated with hospitals to provide donated filter media for masks and is now actively using its manufacturing facility and supply chain to bring masks to hospitals in need. It has materials for the manufacture of around 800,000 masks and plans to produce up to 2 million masks per month if the materials are available.
COVID-19 affects not only the production line, but also the way the company works. The company currently employs around 150 people, two thirds of whom work in fulfillment and sales. To address the COVID-19 threat, SecondNature reorganized its two warehouses (in Ardmore, OK and Wilson, NC) to keep employees separate – also by creating additional break rooms. It is also ensured that all processes remain clean and hygienic. A dedicated team focuses on cleaning the system, including wiping doors, handles and other surfaces.
SecondNature’s additional funds will be used to expand the business and hire new staff to support plans for new products, including upcoming first-party products currently in research and development. Tarkington suggests that they will focus on products where the company “can innovate and improve a product or process – maybe greener”.
To date, SecondNature has raised $ 18.4 million.