When Davis Smith created Cotopaxi in 2014, even his attorney thought he was crazy.
The outdoor apparel and accessories brand’s mission then, and now, is to create sustainably designed outdoor products that advance education, health and livelihoods around the world. It is also a Benefit Corp., which means it considers the impact it has on society and the environment in addition to returning profits to its investors.
“When we started, no one knew what a B Corp. was,” Smith said. “And even my attorney said no one will invest in a company that gives away money before it even makes money.”
Fast-forward to 2021, and Cotopaxi has secured $45 million in funding from Bain Capital Double Impact, the impact investing arm of the private equity firm. Early in its life, Cotopaxi attracted some other high-profile investors including Toms founder Blake Mycoskie through his Toms Social Entrepreneurship Fund, as well as Neil Blumenthal, Smith’s former classmate from the Wharton School and the cofounder of Warby Parker and Harry’s.
“We are just getting started in the growth of this brand, and together with Bain Capital Double Impact, we will continue to prove that business can be a vehicle for positively impacting people, the planet and our communities,” Smith said. “Like Cotopaxi, Bain Capital Double Impact leads with their values and commitment to sustainability, and we could not be more excited to collaborate with one of the most respected investors in the impact space to advance a shared vision.”
He said that Bain Double Impact cares about Cotopaxi’s mission and the people who work at the fund are passionate about societal causes.
As a result of the funding, Smith said Cotopaxi will continue to expand the brand as it strives toward its goal of “building the next great outdoor brand, focused on people.”
Although Cotopaxi, which is named for a mountain in Ecuador where Smith spent a lot of time in his youth, is known for its colorful backpacks, apparel has now grown to represent about half of the brand’s sales. Outerwear — insulated jackets, colorful fleeces and windbreakers in particular — is a strong seller for the brand. It also offers some logo product under the “Do Good” moniker, as well as face masks that the company started producing during the pandemic. For every mask sold, it donated one to an impoverished community and to date, it has donated more than 110,000 masks.
“Our hero product is a travel bag and no one was traveling during the pandemic, so we pivoted,” Smith said.
The masks were made from remnant fabrics, which Cotopaxi uses for a lot of its products. In fact, it incorporates recycled compounds into 94 percent of its products.
In addition to expanding the brand, Smith said Cotopaxi will continue adding to its retail fleet. The brand is carried in retailers including REI, Moosejaw, MEC and Backcountry, and it operates five of its own stores, in Seattle, Denver and three in Utah. The company just signed leases for units San Francisco and a second location in Denver and Smith hopes to add “quite a few more” in the future.
Cotopaxi will also continue to expand outside the U.S., he said. The brand has a presence in Europe, notably the U.K. and Germany, as well as in Japan, a country it entered last year. “We have a list of other countries where we’d like to expand in the EU, Australia, New Zealand and across Asia, including South Korea,” he said. “We feel like we’re building a global brand.”
As part of the deal, Cecilia Chao of Bain Capital Double Impact, will join the Cotopaxi board.
“Cotopaxi is setting industry standards for mission-driven brands by integrating positive impact into every aspect of their business — from innovative designs and sustainable product development strategies to a commitment and culture of driving positive social and environmental outcomes,” Chao said. “Their customers, retailers, employees, and non-profit partners have incredible affinity for the brand, and we are thrilled to partner with Cotopaxi to scale its reach and impact by accelerating its global omnichannel and experiential retail strategy while strengthening their sustainability mission and efforts to address poverty.”
Cotopaxi also has the Cotopaxi Foundation, which awards grants to nonprofit partners focused on improving the human condition and alleviating poverty. To date the foundation has touched more than 3 million people experiencing poverty and during the pandemic, it awarded 36 focused grants and assisted more than 822,000 impoverished individuals. The company is also a Climate Neutral company and a 1% Pledge member.