Boston-based startup Spoiler Alert has raised $11 million in Series A funding to grow its ‘liquidation platform’ that helps consumer packaged goods (CPG) companies sell surplus and short-dated inventory to discount retailers.
The round was led by Collaborative Fund with participation from existing investors Acre Venture Partners, The Betsy & Jesse Fink Family Foundation, Maersk Growth, Spring Point Partners, and Valley Oak Investments.
Spoiler Alert co-founder and CEO Ricky Ashenfelter tells AFN that the biggest benefit his company’s software provides is the digitalization of slow-moving, short-dated food inventory. This allows brands to better manage their food liquidation process and their networks of discount retailers and nonprofits to which they send excess item.
“There is a tremendous amount of data that exists in [enterprise resource planning] tools that is not being utilized effectively and is leading to good food not getting to market fast enough for human consumption,” he says.
“Many manufacturers get overwhelmed with excess inventory, and I think that’s where we help these companies better leverage data in their systems.”
In the US, mainstream grocers like Walmart or Whole Foods require food manufacturers to guarantee a certain amount of shelf life on a product. Once a product hits its shelf-life threshold, CPG companies then turn to discount retailers, which tend to have more flexibility, and nonprofit food donation centers.
“So many [CPG companies] have these relationships. We are digitizing and enhancing that commercial transaction, but we’re also helping the suppliers identify new sales channels and we’re helping the buyers source more inventory opportunistically,” says Ashenfelter.
“We bring pricing intelligence, workflow automation, and network building to help [CPGs] more effectively carry out their B2B discounting programs.”
Spoiler Alert’s platform combines inventory data from different systems to give CPG brand owners a bird’s-eye view of all sellable stock. They can then communicate with partners about orders, accept offers, and fulfill them from a single interface.
A number of major CPG brands already use the platform, including Nestlé, Kraft Heinz, Campbell’s, and Danone North America. Purchasers of these companies’ inventory include businesses like Ollie’s Bargain Barn and ‘imperfect food’ e-grocer Misfits Market.
Ashenfelter says that over the last 12 months, Spoiler Alert has helped move more than 200 million pounds of product.
The startup will use the Series A funds to expand its team and bring new features and capabilities to its platform.
“We are investing quite heavily continuing to grow our product and engineering team. But we’re making more concerted efforts to build out our go-to-market strategy and build a sales and marketing engine,” Ashenfelter says.
Expanding into other consumer product categories that face similar perishability issues — such as those in the beauty and health sectors — and launches in international markets are longer-term goals, he adds.