Cotopaxi: What Entrepreneurs Can Learn from this Mission-Driven Outdoor Apparel Brand

Named after the Cotopaxi volcano in the Andes Mountains of Ecuador, Cotopaxi is an outdoor apparel brand that goes beyond selling activewear and hiking gear. The company is dedicated to sustainable, ethical practices. It works with premium factories and production partners to minimize its carbon imprint and protect the labor rights of its makers. 

It may sound too good to be true, but Cotopaxi has proven that its methods work. Even with high product price tags, the company has experienced impressive growth since its 2014 launch. These aren’t products you have to replace often, either. Cotopaxi has a 61-year warranty for all of its products. 61 years being the average lifespan of a person in the underdeveloped world. 

So how has this mission-driven company achieved financial success while making a positive social impact on a global level? In this case study, we’ll explore the origin story of Cotopaxi, what sets the brand apart, how much the company is worth, and what entrepreneurs can learn from the company’s journey. 

Plus, find out how we can coach you to build your first million-dollar business… FREE.

What is Cotopaxi?

Cotopaxi is an outdoor apparel and gear company known for its socially conscious approach and commitment to sustainability. The B Corp Certified brand takes its name from Cotopaxi. That's an active stratovolcano in Ecuador, where the founder, Davis Smith, lived as a child. Smith founded Cotopaxi in 2014; it is headquartered in Salt Lake City, Utah.

Cotopaxi aims to create high-quality outdoor apparel and gear while making a positive impact on the world. The company’s products range from backpacks, jackets, and other apparel to coolers and hiking accessories. One of Cotopaxi’s notable brand differentiators is the Gear for Good^® promise to “make durable gear as ethically and sustainably as possible” and to use the company’s revenue and influence to support communities in need. 

The mission-driven brand allocates 1% of all revenue to support nonprofits dedicated to poverty alleviation, education, and health initiatives worldwide. They also prioritize ethical manufacturing practices and sustainable sourcing of materials.

Cotopaxi has gained popularity for its unique and vibrant designs, product durability, and its focus on giving back to communities. It aims to promote sustainability within the outdoor apparel industry.

Who founded Cotopaxi?

Davis Smith founded Cotopaxi in 2014. 

What is Cotopaxi’s origin story?

The origin story of the Cotopaxi brand traces back to 2014. That's when Davis Smith, an entrepreneur with a passion for outdoor adventures and a desire to make a positive impact, founded the company. Inspired by Cotopaxi, a majestic volcano near his childhood home in Quito, Ecuador, Smith named his brand after this iconic landmark.

Smith envisioned Cotopaxi as more than just an outdoor gear company. He wanted it to be a force for good in the world. He believed he could build a brand that connected with a younger generation who shared his passion for outdoor adventure and making the world a better place. With this vision in mind, he set out to create a brand that would prioritize social and environmental responsibility while producing high-quality outdoor products.

One of the defining features of Cotopaxi's origin story is its commitment to addressing global poverty, which Smith had witnessed as a child living in impoverished countries in South America and Central America. He believed businesses had a unique opportunity to make a difference. To accomplish his goals, Davis ensured Cotopaxi became a certified B Corporation, a designation for companies that meet rigorous social and environmental performance standards.

Through their products and initiatives, Cotopaxi supports various causes and organizations that help communities around the world facing extreme poverty. The Cotopaxi Foundation concentrates on poverty alleviation efforts in Latin America’s poorest communities, investing in education, health, and livelihood. The brand partners with numerous nonprofits and allocates a portion of its revenue to fund these initiatives.

Cotopaxi's origin story reflects its founder's belief that business can be a catalyst for positive change. With a focus on sustainability, social impact, and adventure, Cotopaxi has become a beloved brand that combines outdoor gear with a meaningful purpose.

How was this brand funded?

Cotopaxi's funding has been driven by a combination of investments, partnerships, and revenue generated from its product sales. It has raised a total of $77.1M in funding over nine rounds, beginning with a $3M seed round in 2014. Its most recent Series C funding of $45M in September 2021 was led by the Bain Capital Double Impact Fund. 

What made Cotopaxi grow?

Cotopaxi grew to multi-millions in revenue in just a little over two years after its 2014 launch. What was the company’s secret to such rapid growth? Identifying their target market: socially-conscious millennials who love adventure and want to make the world a better place. 

According to Founder Davis Smith, having “core values that inspire the world” allowed the brand to connect with its market on a deeper, more meaningful level. Cotopaxi’s customers appreciated that the brand was about more than making money. As a result, they were willing to spend more to support a mission-driven company that aligned with their values while meeting their needs for unique, top-quality outdoor apparel and gear. 

Other factors that influenced Cotopaxi’s fast growth included:

• Developing co-branded products for companies like Google and Adobe
• Establishing partnerships with retailers like REI and Nordstrom
• Hiring top talent and trusting them to do their job
• Operating in 1-week sprints
• Keeping as much work in-house as possible
• Using smart tools like cloud-based SaaS products to facilitate internal processes
• Implementing storytelling for branding rather than paying for tons of Google and Facebook ads

What is Cotopaxi’s valuation?

According to Crunchbase, Cotopaxi has a post-money valuation in the range of $100M to $500M. 

What are the entrepreneurial lessons that can be learned from Cotopaxi?

Entrepreneurs who want to build a lucrative AND mission-driven company like Cotopaxi can learn some excellent lessons from the brand’s growth since its 2014 launch. 

• Purpose-Driven Approach: Cotopaxi's commitment to making a positive social and environmental impact sets a powerful example. By aligning their business with a purpose beyond profit, entrepreneurs can build a brand that resonates with consumers and attracts like-minded individuals.
• Innovative Business Model: Cotopaxi's innovative business model combines retail with philanthropy. They leverage their outdoor gear sales to fund sustainable poverty alleviation initiatives. Entrepreneurs can explore creative and impactful ways to integrate social responsibility into their business models.
• Authentic Storytelling: Cotopaxi effectively tells their brand story by highlighting their mission, values, and the positive change they are driving. Entrepreneurs can learn to authentically communicate their own unique narratives, connecting with customers on a deeper level and building brand loyalty.

FAQs

What is the Cotopaxi Foundation?

The Cotopaxi Foundation is the philanthropic arm of the Cotopaxi brand. It is a registered 501(c)(3) nonprofit organization established with the mission to alleviate poverty and support humanitarian causes around the world. The foundation provides grants to nonprofits that help communities facing extreme poverty, with a focus on Latin America’s poorest communities. By aligning its business and philanthropic efforts, Cotopaxi aims to create a positive impact and make a difference in vulnerable communities worldwide.

What is the “Do Good” collection by Cotopaxi?

The Do Good collection is a mission-driven product line offered by Cotopaxi. It features limited edition products made from repurposed or surplus materials, highlighting the brand's commitment to sustainability and waste reduction. The collection embodies Cotopaxi's mission to make a positive impact on the world.

What type of apparel does Cotopaxi offer?

Cotopaxi’s outdoor apparel includes jackets, windbreakers, rainwear, vests, t-shirts, hoodies, bottoms, and accessories for men, women, and kids. 

Is Cotopaxi a certified B Corporation?

Cotopaxi is a certified B Corporation, which is a designation for companies that meet high standards of performance, accountability, and transparency as they pertain to social and environmental impact. Considerations for a certified B corporation status include charitable giving, supply chain practices, materials, and employee benefits.

Takeaway

Cotopaxi Founder Davis Smith wanted to marry his passion for entrepreneurship and his desire to make a difference in the world. He knew the more apparel and gear he sold, the more money he could make to support the global and social causes that mattered most to him. Since Cotopaxi’s 2014 launch, the company’s defining purpose has been to make durable gear as ethically and sustainably as possible while using the company to support communities facing extreme poverty. 

In an interview with Forbes, Davis said, “I believed I could have a bigger impact on the world by creating a business that had core values that inspired the world than I could if I just did something on my own.” 

Can you imagine building a brand that could allow you to make that kind of impact on the people or places that matter most to you? 

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