TreeDots, an online marketplace aimed at fighting waste and loss in the agrifood value chain, has raised $11 million funding, it announced today.
Other investors taking part in the round included ACTIVE Fund, a VC affiliate of Philippine conglomerate Ayala; Singapore government-linked Seeds Capital; US business and psychology writer Nir Eyal; and Singaporean actor Fiona Xie.
Established in 2018, TreeDots describes itself as “Asia’s first vertically-integrated food supply chain ecosystem.” It’s app-based marketplace helps suppliers and distributors sell surplus and “imperfect” food items that are shunned by their usual bulk buyers, such as retailers.
Co-founders by Tylor Jong, Lau Jia Cai, and Nicholas Lim came up with the idea for TreeDots after working in the commodities trade and witnessing tons of imported produce go to waste in shipping ports – stuck there and rotting due to regulatory hurdles, delays, and other supply chain inefficiencies.
The Singapore-based startup uses tech to help suppliers redistribute any unsold inventory to prospective buyers they wouldn’t normally be able to reach – such as restaurants, cafes, and hotels.
“We realised that a grocery chain might not buy a chicken that’s too big or has a broken bone because it looks funny on their shelves. But F&B outlets don’t care because they will cut it, plate it, and make it look nice before serving,” co-founder Jong, who is now the company’s CEO, said in a statement.
“If they can purchase essentially the same product at prices up to 90% cheaper than alternatives, they are very happy. This original insight drove us to start an oversupplied foods marketplace to match supply and demand for these products.”
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TreeDots initially focused on the B2B market, hosting foodservice buyers on its marketplace. But it has since opened to end consumers seeking lower prices and more sustainable options.
Leaning on the community group-buying model popularized in China by the likes of Pinduoduo, TreeDots allows consumers to form teams in order to make bulk buys on its platform.
These purchases are then delivered to one of the team members, who takes responsibility for distributing the food to the rest of their group. This helps to cut down on costs and carbon.
TreeDots is also looking to provide its enterprise customers with various value-adds, including its TreeLogs cold chain logistics service.
“Food loss is already a trillion dollar problem, but what got us really excited was the fact that suppliers started to use [TreeDots’] system for all of their revenue, not just food loss products,” said East Ventures managing partner Roderick Purwana.
“If one of [the supplier’s] trucks could make one delivery to a zone, TreeDots could make five deliveries on that same trip working across suppliers. The increased network density allows for decreased logistics costs and lower emissions.”
The startup, which claims its gross merchandise value has grown by more than 4x over the past year, expanded to neighboring Malaysia in 2020 and is planning further regional launches in the near future. It states its goal is to save 2 million tons of food that would otherwise have been wasted each year, while also aiming to reduce carbon emissions by 18 million tons by 2025.