SecondNature raises $16.4M for “healthy home” subscription products, like air and water filters

After a confusing trip to the store to purchase an air filter
back in 2012, two N.C. State University students, Thad Tarkington
and Kevin Barry, came up with the idea to make this routine home
maintenance purchase a subscription-based business. The following
year, their startup FilterEasy had a few hundred subscribers. Fast
forward to now, and that service — now called SecondNature — has grown its
customer base to hundreds of thousands by expanding beyond its
original direct-to-consumer model to also include industry
partnerships.

Today, the N.C. Triangle-area company is announcing it’s
closed on $16.4 million in Series C funding from new and existing
investors, including strategic investor, MANN+HUMMEL, through its
corporate venture group.

Other investors in the round include IDEA Fund Partners,
Multiplier Capital, Lead Edge Capital, Arsenal Growth, One Better
Ventures, Bonaventure Capital, NC State’s investor network WIN,
and UNC’s investor network CAN.

SecondNature began its life
solving a common homeowner problem
: helping people to remember
to change the home’s air filter. Often, this is a forgotten task
as there’s no built-in reminder or alerting system to signal when
the filter’s time is up, unlike some other household products.
Your smoke alarms blare when batteries are low. Lightbulbs go dark
when it’s time for a change. But air filters just sit there,
quietly collecting more dust as your air quality worsens and your
energy bill climbs.

Tarkington says the idea to put air filters on subscription not
only made sense as a way to remind the homeowners to make the swap,
but the model worked for retailers as well.

“It’s a product that’s not really well-suited for retail
because they’re large, they take a lot of space, and they’re
easily damaged,” he says. “And generally, you have thousands of
different sizes, so a retailer can only serve a certain percentage
of the market.”

The founders soon left college and began to work full-time on
the company. They later participated in The Iron Yard accelerator
and
raised $1.2 million in seed funding in 2015
.

While the startup’s customer base of homeowners steadily grew,
SecondNature found that it needed more channels than just
direct-to-consumer (D2C) alone to increase sales. In the years that
followed, the company began working with industry partners,
including HVAC companies, real estate agents, utility companies,
and commercial properties. These categories have contributed to
customer growth, but D2C remains the largest so far, given its head
start.

MANN+HUMMEL’s recent investment signals where SecondNature is
headed next. The company no longer considers itself just an easier
way to get your air filters. Instead, it’s now positioning itself
as a “home wellness” brand that will eventually encompass a
range of products that homeowners need to replace on a recurring
basis.

For starters, this includes SecondNature’s newest product
line: water filters.

“As we started growing, we found that people really
appreciated the convenience of [our business],” says Tarkington.
Plus, people were starting to talk about other things, like how
filters helped with allergies and created a healthier home
environment, he notes.

“We saw this big trend towards personal care — like what we
put in or on our bodies,” Tarkington explains. “We spend a lot
of time in our homes — so our indoor air quality and what we are
drinking, from a water quality perspective, has become very
important.”

It made sense, then, to expand the concept of a “healthy
home” to also include water filtration.

In Q2 2020, SecondNature will launch its first two products in
this water filtration space, which will include filters for your
refrigerator water. One will be focused on improving the taste,
quality and clarity of the water, while the other will be more
about filtering out harmful particles from local water systems.

Going forward, the company plans to embrace anything that
improves your home’s health, Tarkington says.

In the more immediate future, however, SecondNature may benefit
from increased interest in home health products in the wake of the
COVID-19 outbreak. For example,
SecondNature’s MERV 13-rated “catch all” filter
can
reduce the odds of you catching the flu or a viral infection when
someone in your home is sick. That’s because it’s able to catch
about 87% of droplet nuclei that pass through. (To be clear, this
is not a COVID-19 preventative, it’s about risk reduction —
like washing your hands or sneezing into your elbow, for
example.)

While some area’s of SecondNature’s business has been
significantly impacted by COVID-19 — like commercial properties
where rent may longer be coming in, Tarkington says overall,
business is good.

“Generally, demand for the product has gone up – due to the
nature of it,” he says.

It’s worth clarifying, though, that SecondNature isn’t
aiming to market towards consumer fears due to the outbreak.
Instead, it’s trying to help. The team has coordinated with
hospitals to get them donated filtration media for masks, and is
now actively using its manufacturing facility and supply chain to
get masks to hospitals in need. It has materials to produce around
800,000 masks on hand, and plans to produce up to 2 million masks
per month as long as it has the materials.

COVID-19 isn’t just impacting its production line, but also
how the business operates. The company today has around 150
employees, two-thirds who work in fulfillment and distribution. To
address the threat of COVID-19, SecondNature reorganized its two
warehouses (in Ardmore, OK. and Wilson, N.C.) to keep staff
separated — including by creating additional break rooms. It’s
also working to ensure all processes stay clean and sanitary. A
dedicated team is focused on cleaning the facility, including by
wiping down doors and handles and other surfaces.

SecondNature’s additional funding will go towards expanding
the businesses and hiring to support its plans for new products,
including forthcoming first-party products it has now in R&D.
As for what those may be, specifically, Tarkington hints they’ll
focus on products where the company can “innovate and make a
product better or a process better — maybe more
environmentally-friendly.”

To date, SecondNature has raised $18.4 million.

Source: FS – All Tech News 2
SecondNature raises .4M for “healthy home” subscription products, like air and water filters