Moving on for more impact
Despite the skepticism surrounding the success of a double-bottom-line social impact business, Natasha Freidus, the co-founder of NeedsList, has defied all odds. Her journey, culminating in the recent acquisition of NeedsList by Armillaria, is a testament to her unwavering determination and resilience. She shares her challenges, motivations, and strategic decisions that paved the way for her successful exit.
Natasha's first experience working in disaster relief occurred during her time in France when refugees began arriving in large numbers. Although she had volunteered and worked with migrants before, it became blatantly obvious how few tech tools were available that would make it easier for organizations to sort out what they had and what supplies they needed.
She set up a simple WordPress site with the group she was working with. With WordPress lacking an appropriate plugin tool they could use, she turned to what would end up being her proof of concept: a wedding registry. "I didn't know that's what I was doing. I was trying to be practical and figured there was a better way," Natasha said, "and it kind of worked." On the registry, she and another lead volunteer could post what they needed, albeit with a few limitations.
As time passed, it became clear that the need for communication between organizations and donations was not going away soon. Non-governmental organizations (NGOs) needed help to keep up with the pace of people arriving, and the work was falling on grassroots groups.
Natasha was talking with other people leading local groups across Europe through WhatsApp and Facebook, trying to find out what tools they were using. No one had found a way to communicate efficiently. Their options included sending emails or posting lists on Facebook, which would become obsolete within 20 minutes. She thought to herself there had to be a better way. Natasha began thinking about a potential tech-based solution. This led to NeedsList, a unique platform that leverages data analytics and real-time communication to streamline matching supply with demand in disaster-stricken areas.
"I wanted to make a straightforward app or plugin. I wasn't trying to transform the aid industry at that point," Natasha explained. "I've always been drawn towards for-profit, social entrepreneurship, and so I just thought let's try to establish this as a double-bottom-line company and see where it goes."
Difficulty raising funds
Natasha had previously founded a social enterprise as a sole founder, never needing outside investment. So, when it came to NeedsList, which she co-founded with Amanda Levinson, she still needed to understand everything involved in raising funds.
"We were building a software product, and I'm not a coder or a designer," Natasha admits. "We knew from the beginning we would need resources to build the actual technology, and that's why we started looking for outside capital."
As a woman in the tech industry, Natasha faced unique challenges in raising investment for NeedsList. On the one hand, Natasha noticed they would often get invited into the room, but on the other hand, they would frequently leave without a check. "They (investors) were intrigued by the idea but were very skeptical that it could ever be profitable." Natasha felt they were pigeonholed – investors did not take them seriously and did not think there was room for profit in their business model.
There is a common misconception that ample support and funding is available for female founders who want to start a business. However, once she started digging into it, Natasha found that the available dollars were limited. Venture capital firms were making announcements about the tens of millions they put into women-led businesses, yet as Natasha explains: "There is a real gap between the rhetoric and the actual investment."
Spending an enormous amount of time pitching for small amounts of money, Natasha found herself exhausted. "At a certain point, you have to decide if you're, you know, running your business or if you're raising capital. And it's quite hard to do both."
Despite these challenges, NeedsList raised funds and grew to have an immense impact.
Scaling their impact
From its inception, NeedsList made a tangible difference. The early iterations of the platform allowed individual donors to purchase supplies from local vendors, benefiting refugees and supporting local economies. This model resonated with people who wanted to see the direct impact of their donations, such as providing shoes, rather than contributing unquestioningly.
Eventually, the NeedsList team realized that to scale the model of individual donors purchasing items, they needed more resources than they had. They also noticed businesses needed to learn how to donate.
Recognizing the need for more significant donations, Natasha and the NeedsList team pivoted to a business-to-business model in 2018. This strategic decision not only allowed for larger donations but also opened up new avenues for partnerships and collaborations, significantly expanding the company's reach and impact.
Initially, Natasha believed their efforts were mainly for grassroots initiatives. However, after attending conferences and speaking with disaster response professionals, she realized the potential of their platform. Even large-scale government agencies were using outdated tools and needed more efficient software to coordinate crisis responses. This realization highlighted the broad impact of NeedsList's unique platform.
Natasha and her team knew that a small startup would not be able to achieve the kind of scale that they were now looking for. They realized the importance of having strong partners or operating within a more extensive network to accelerate the software's growth.
Global crises, including the fall of Kabul and the invasion of Ukraine, underscored the need for new models of crisis response. NeedsList partnered with the U.S. Department of State to support the arrivals of tens of thousands of Afghans. Later, the company received a one-million-dollar grant from Google.org to support a deployment in Ukraine and a global, free version. This traction ultimately led to the acquisition of the company.
The acquisition
At midnight on December 31st, 2023, NeedsList was officially acquired by the technology firm Armillaria, and Natasha felt ready for it. It was clear to her that it was the best path forward for her company. After seven and a half years of hard work and determination, she hoped to find the right person to take it on: someone with a fresh perspective and new ideas.
"Armillaria was an obvious fit for us from both a technology perspective and a values alignment that was important for us," Natasha shared. "One thing I'm excited about is how our software will be integrated into a larger suite of tools. I'm excited to see the impact it will continue to make and the new ways it will be used."
Natasha is thrilled to share that NeedsList has been used across 25 countries since their conception, facilitated the delivery of over 35 million dollars of goods and services to vulnerable communities, and helped small grassroots movements and large organizations. She will continue to help oversee the transition of NeedsList's operations and offer guidance while moving forward.
Towards the future
Natasha had another reason she was motivated to be acquired. "I got to the point where I thought, instead of focusing on one specific technology solution, I'd like to look at some of these system issues," she shares. During her years running NeedsList, the immense obstacles that founders, particularly female founders, faced became apparent to her.
Even she, who had come from a privileged background with a good education and dual US and Canadian citizenship, found it hard to raise capital. She knows what it is like to be a founder and can imagine how difficult it would be for an underprivileged woman. People want to see more double-bottom-line companies, but the obstacles are tremendous with unreasonable expectations.
"I'm interested in helping move the capital to under-resourced sectors and founders and potentially looking at policy issues," Natasha voiced, "and I have other business ideas as well, all of it still impact focused."
Natasha is putting some energy into all these areas and seeing what bubbles up.
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