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09 May 2017

Troccauris: a Business Model for a Circular Economy?

Mark Esposito, professeur senior à GEM, spécialiste de l’économie circulaire, nous éclaire

Three young entrepreneurs launched Troccauris, a collaborative platform to exchange objects and services. The platform is aimed at individuals and relies on a virtual currency to exchange goods in a circular manner. Launched in July 2015, Troccauris was incubated at IncubaGEM by three Grenoble Ecole de Management alumni.

Jérôme Guilmain, Audrey Bouvier and Juan Ramirez co-founded Troccauris as an example of frugality. The community website's virtual currency, cauris, draws its name from a type of shell known as cowry, which was often used as currency in certain parts of the world. The concept behind Troccauris is simple: to enable users to exchange goods and compensate differences in value by using cauris. When two users exchange goods, the user with the more valuable good will receive cauris in compensation. Acquired cauris can then be used to purchase other goods on the website.

Combining B2B and C2C to ensure a successful company

Troccauris does not take a commission on sales. Instead, its model ensures profitability through various services. As 80% of goods are bartered through local exchanges, the platform sells cauris at a rate of one euro to ten cauris in order to facilitate such local barter. Troccauris offers a premium account for individuals who wish to gain early access to targeted offers. The company also provides a delivery service in partnership with hundreds of cafés in Grenoble and Paris.

Partner companies will also provide another source of revenue. By contributing a yearly subscription on the basis of the number of employees (€5-10 per employee), companies can have a dedicated webpage that will showcase their employees' objects and services. The first trial runs of this service were successful.

Major growth expected by 2018

The website Troccauris.com already has 7,000 active subscribers with more than 20 barter deals per week. The startup is currently raising funds with a goal of €600,000. After launching in Grenoble, the startup opened its platform to Parisiens in March of 2016. Over the next couple of months, Troccauris is planning to open its platform to a dozen major cities in France. The startup is aiming to enroll 30,000 users by the end of 2017 and 90,000 by 2018. Anticipated turnover for 2017 should reach €400,000 with ten employees.

In addition to being incubated at IncubaGEM, Troccauris was also supported by Antropia, the Essec business school incubator. In 2014, the startup earned the Pépite prize, which is a national competition for student entrepreneurs. The project was a laureate of the Entreprendre Isère network. Bpifrance supported the project through a FrenchTech grant. The startup is also currently a laureate in the GreenTechVerte project launched by the French Ministry of the Environment.

The expert's analysis

Mark Esposito, is a senior professor at GEM and a specialist of the circular economy. He shares with us his analysis of the circular economy and Troccauris.

"The circular economy offers a viable alternative to linear economic models. Instead of thinking in terms of going from 'cradle to the grave', a circular economy is based on going from 'cradle to cradle'. It favors economic models that foster re-using objects in order to ensure products, components and materials remain useful throughout their lifecycle. The concept of Troccauris is an example of financial innovation that attempts to bypass the banking system and use a system based on exchange. The idea is to be as close to possible to the real needs of a community. The startup doesn't necessarily represent the traditional circular model, but rather a model based on mutualization and a virtual sharing economy. It's an example of frugality that aims to provide innovative solutions without relying on important capital investments. Frugality is an essential part of circular theory. It focuses on using existing resources without compromising quality or service."

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Mark Esposito

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