Earlier this year, I eagerly hashed out my first ‘Letter from London,’ which admittedly rambled on far too long: it details precisely how, where and why the UK is trying to radically drive down food waste. Several, even longer letters could easily and swiftly be written about the Scandinavian approach. But for now, those riveting missives will have to wait; the specific example of Swedish online marketplace Matsmart is more timely. This week, after all, it has just announced a raise of over €17 million in late-stage funding, bringing its total financing to €40 million.
LeadX Capital Partners, in a manner true to their name, led the round; they were joined by the likes of Ingka Group (IKEA’s parent company), Northzone, D-Ax, and Norrsken.
The premise of Matsmart is broadly similar to other food waste startups: each year, the company reckons, 1.3 billion tons of food is wasted along the value chain worldwide — some because of overproduction; some because food does not comply with the industry standard; and some because the product is too close to its best-before date.
German expansion in 2020
Founded in 2014, Matsmart’s plans to mitigate this by selling surplus production and overstocks online. Presently, the team of 150 only sells to consumers in Sweden and Finland — all at major discounts. It is expanding to Germany in 2020.
How does it source its products? Matsmart buys its assortment directly from producers like Unilever, Nestlé, and Mondelez Sverige. It sells online, focusing on produce that would otherwise have been thrown away. In the Nordic region, as with other parts of the world, the reasons for oversupply and food waste are typically due to overproduction, a change of design or short best before dates. Already, the company has a revenue of Skr400 million (roughly $40 million.)
LeadX Capital Partners is sponsored by the German wholesaler Metro, which intends to halve food waste in its own business operations by 2025, explaining its interest in Matsmart. It also explains the German expansion plans; Metro’s Dusseldorf firm offers a good springboard to the rest of the country.
Metro wants to halve its food waste by 2025
“As a wholesaler, we have the duty to take a firm stance in reducing food waste, and Matsmart is tackling the issue in an innovative way,” says Veronika Pountcheva, global director of corporate responsibility at Metro, in a press release sent to AFN. “After all, marketplace models are by far the most successful online business models at the moment. Their advantages are obvious: more transparency and faster scalability compared to the online shops of individual brands.”
In the same press release, Hansjoerg Sage, who heads Metro’s start-up activities and is a managing partner at LeadX Capital, expressed his excitement, calling the Matsmart team “a delight to work with.”
“We see a lot of potential to Matsmart’s solution,” he added, “and are pleased to have the opportunity to support them in their plans to expand internationally.”
Returning the profuse compliments, Matsmart CEO Karl Andersson said his team “have been looking for a partner that can support us expanding to Germany and the rest of Europe. We are very proud to have Metro onboard and strongly believe that they will add knowledge and know-how in many different ways.”
His company “has filled a gap in the food chain,” he said, “and in 2018, we managed to save 3700 tons of food. Our vision is a world without food waste and we are eager to give people in Germany the chance to save both food and money, using our marketplace.”
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