# HowGood Financial Model

Sustainability SaaS platform and data intelligence provider that scores, rates, and benchmarks products across environmental and social impact metrics.

- Canonical: https://finamodel.com/startups/howgood
- Excel download: https://finamodel.com/startup-models/howgood.xlsx
- Category: Consumer/DTC
- Model type: SaaS ARR / Valuation
- Funding round: Series B
- Funding: $12.5M
- Founded: 2022
- Geography: US-primary; database covers global supply chains [DECK slide 03].
- Customer: B2B

## About the company

HowGood is a sustainability data platform that scores, rates, and benchmarks products across environmental and social-impact measures. CPG brands, retailers, ingredient suppliers, and ESG investors use its intelligence to understand product footprints and make supply-chain and commercial decisions.

The company has two B2B revenue streams: Latis platform subscriptions and Impact Data licensing. Its database covers global supply chains, and its research points to phased vertical expansion, making module mix and product-market rollout more relevant than consumer-goods unit sales.

The model builds ARR separately for platform and data contracts, using new logos, ACV, expansion, and churn. Products assessed and integration scope can serve as leading indicators, while data quality, delivery costs, sales cycles, gross margin, and retention determine the forecast.

## What's included

- 5-year monthly revenue build with stage-appropriate growth assumptions
- Full P&L, headcount plan, and operating-expense schedule
- Cash-flow statement, runway, and burn-rate tracking
- Valuation via exit multiple with a DCF cross-check
- Returns analysis with MOIC and IRR
- Unit economics including CAC, LTV, payback, and cohort retention

## Product & value proposition

Two product lines:

**Impact Platform (Latis)**
- SaaS tool for brands: ingredient/sourcing recommendations, portfolio benchmarking vs. competitors, on-pack claims eligibility evaluation, ESG/SDG annual reporting module (in development).
- Scores products on 247 sustainability attributes (GHG, water, soil health, labor risk, biodiversity, land use, animal welfare, processing).

**Impact Data**
- Data licensing: HowGood sustainability ratings and attributes embedded into retailer e-commerce, in-store POS, and brand marketing/communications.
- Powers consumer-facing ratings at checkout prompting purchase of sustainable products.
- Used by Chipotle (Real Foodprint tool) for customer-facing impact calculations.

**Database moat:** 15 years of supply chain mapping, 550+ data sources, 33K ingredients/chemicals/materials, 2MM+ products assessed at UPC/GTIN level, 247 sustainability metrics.

## Market

**TAM breakdown:**

Impact Platform addressable revenue:
- Ingredient Suppliers: $802,147,089
- CPG – Food: $4,598,403,885
- Personal Care, HABA, Cleaning Supplies: $2,267,414,400
- Retailers: $2,356,621,942
- Apparel: $1,885,039,370
- **Platform Total: $11,909,626,686**

Impact Data addressable revenue:
- Retailers: $589,155,485
- Food Service: $995,324,551
- CPG: $951,350,400
- ESG: $2,172,063,600
- **Data Total: $4,707,894,036**

**Combined TAM: $16,617,520,722**

**Product roadmap TAM expansion:** stacked-column chart shows TAM growing from ~$3B at current offerings (Data: Food Service/Retailers + Platform: CPG/Formulation) to ~$12.5B at full vertical rollout (adding Suppliers, Marketing/Packaging modules, ESG Data vertical, Cleaning Supplies/HABA/Apparel). The deck shows Platform TAM as the dominant component at full maturity.

## Revenue model

**Two streams inferred from product structure:**
1. **SaaS subscriptions (Impact Platform / Latis):** Annual licenses to CPG brands, ingredient suppliers, and retailers for access to the formulation intelligence, benchmarking, and ESG reporting tools.
2. **Data licensing (Impact Data):** Per-integration or annual data feed licenses to retailers (e-commerce/in-store ratings), food service operators, CPG marketers, and ESG data aggregators.

## Traction & metrics

- 624,000 more sustainable products sold per day attributed to HowGood Ratings.
- 234% average sales increase for products rated "Best" over a three-month period.
- 230%+ lift in sustainable product sales.
- Named customers: Walmart, Ahold Delhaize USA, Applegate, Kraft Heinz, Chipotle, Danone, Nestlé, Bob's Red Mill.
- Media/partner coverage: Nielsen, WSJ, Forbes, CNN Money, CBS, FOX, Bloomberg.

## Competition / moat

**Stated differentiators:**
- Unparalleled industry coverage: 2MM+ UPCs, 33K ingredients/materials.
- 247 sustainability attributes (environmental + social/labor).
- Supply-chain-wide positioning: serves suppliers, brands, and retailers.
- 550+ data sources.
- 15 years of data accumulation; "first to market" at this scale.
- Industry thought leadership (speaking invitations, powerful partnerships).

## Team & funding ask / use of funds

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## Recommended financial model

- **Archetype + why:** SaaS ARR + Data licensing revenue model. HowGood has two distinct B2B revenue streams - subscription SaaS (Latis platform seats/licenses) and data licensing (API/feed contracts). The correct archetype is a dual-stream SaaS/data ARR build: new logos × ACV per stream, with cohort-based expansion and churn. The product roadmap chart (slide 09) also implies deliberate vertical expansion driving TAM unlock over time - the model should reflect phased vertical entry.

- **Forecast horizon & granularity:** 5 years (Year 1–5), annual with monthly detail in Year 1. Monthly useful for cash burn / fundraise timing given the deck shows no current revenue numbers.

- **Key drivers & assumptions:**

  *Impact Platform (SaaS):*
  - Starting customer count: ~20–50 enterprise CPG/brand accounts; deck shows Kraft Heinz, Danone, Nestlé, Applegate, Walmart but gives no count - mid-range enterprise pilot stage.
  - Average ACV per platform customer: $150K–$300K/year; enterprise SaaS for sustainability intelligence at this depth; rationale: analogous to data/analytics B2B SaaS pricing for large CPG.
  - New logo growth rate: 30–50% YoY in Base; driven by vertical expansion per roadmap slide.
  - Net Revenue Retention: 110–120%; expansion via module upsell (Nutrition, Procurement, Marketing, Packaging modules).
  - Gross logo churn: 5–10%/year.

  *Impact Data (licensing):*
  - Starting data license customers: small number of retailer/food service integrations; Chipotle confirmed, Walmart likely.
  - ACV per data license: $50K–$200K/year; varies by retailer scale; no pricing in deck.
  - New data license customers: 20–30% YoY growth.

  *Cost structure:*
  - Gross margin: 70–80% blended (high for SaaS; data licensing may require more data ops); rationale: standard for B2B data/SaaS at scale.
  - R&D as % of revenue: 30–40% early, declining to 20% by Year 5; large database/model development required.
  - S&M as % of revenue: 25–35%; enterprise sales motion, long cycles.
  - G&A: 10–15%.

  *TAM expansion timing:*
  - Use roadmap chart as the vertical unlock schedule: current offerings (~$3B TAM) → +Data CPG Vertical → +Platform Marketing/Packaging → +Data ESG → +Cleaning/HABA/Apparel (~$12.5B TAM). Model each unlock as adding a new cohort pool in Year 2–4.

- **Scenarios (Base / Bull / Bear):**
  - **Base:** 35% new logo growth, 115% NRR, 75% gross margin, sequential vertical expansion per roadmap.
  - **Bull:** 60% new logo growth, 125% NRR, faster vertical entry, data licensing picks up ESG segment ($2.17B TAM) by Year 2.
  - **Bear:** 15% new logo growth, 105% NRR, slower vertical adoption, platform-only revenue dominant, longer sales cycles.
  - **Flex variables:** new logo growth rate, ACV, NRR, gross margin, vertical unlock timing.

- **Required sheets / outputs:**
  1. Assumptions dashboard (all drivers, color-coded, scenario toggle).
  2. Platform ARR build (new logos, expansion, churn, ending ARR).
  3. Data licensing revenue build (new contracts, expansion, churn).
  4. Combined P&L (revenue, COGS, gross profit, OpEx by function, EBITDA, net income).
  5. TAM penetration tracker (addressable vs. actual by vertical and year).
  6. Headcount model (engineering/data, sales, G&A).
  7. Cash flow & runway (given no funding ask shown, key output for investor read).
  8. Scenario comparison summary.

## Frequently asked questions

### Is the HowGood financial model free?

Yes. The HowGood model is a free Excel download with live formulas.

### Can I change the assumptions?

Yes. The workbook is editable and its live formulas recalculate when assumptions change.