Sharing app Olio, which connects people who wish to offload uneaten meals and different home items to close by neighbours, has raised a $43m Collection B spherical led by DX Ventures, the VC arm of meals supply enterprise Supply Hero.
Olio now has 5m customers worldwide, half of which began utilizing the app throughout the pandemic and 80% of that are primarily based within the UK. On common, it takes simply 20 minutes to shift an merchandise of undesirable meals on the app.
In September 2020, Olio introduced a partnership with UK grocery store large Tesco, which has seen the variety of meals gadgets listed on the app every month soar from 300k or so to over 1.6m.
The startup’s cofounder, Tessa Clarke, is assured these new customers will stick round. “As soon as individuals have had that [sharing] expertise, it’s actually arduous to return to simply mindlessly throwing stuff within the bin and sending it off to a landfill,” she says.
The most recent elevate will go in direction of scaling up its ‘Meals Waste Hero’ programme — the place Olio pairs its meals enterprise companions like Tesco up with its military of 30,000 volunteers to distribute meals without spending a dime to native communities — and increase into new markets throughout Latin America, the Nordics and Asia. Olio additionally plans so as to add a market for neighbours to borrow small gadgets resembling DIY instruments from one another to its app.
Get the very best of Maintain in your inbox, Sifted’s sustainability-focused e-newsletter
The tough enterprise of group spirit
Olio isn’t the primary startup to have tried to construct a enterprise across the notion of neighbourly sharing.
Within the 2010s, a variety of apps positioning themselves because the “Airbnb of house cooking” floundered as they struggled to create a steadiness of provide and demand. In 2016, Menu Subsequent Door raised $2m from buyers together with Index Ventures; two years later, it shuttered. Cookista, a Greek startup that paired house cooks up with hungry neighbours, and Dish Subsequent Door, an analogous outfit primarily based in London, each ceased operations in 2016.
The issue for Olio has been that whereas individuals like to snap up meals that’s going free, they don’t typically have a lot to provide away themselves. Grocery shops and caterers, alternatively, typically discover themselves with large volumes of meals going to waste.
To unravel this supply-side drawback, Olio has struck offers with the likes of Pret A Manger, Tesco and Costa Espresso. It additionally works with meals wholesaler Booker and foodservice enterprise Compass Catering, amongst others, and is now piggybacking on the expansion of the ultra-speedy grocery sector: Clarke says Olio now works with Zapp, and is in lively discussions with Gorillas, Getir and Weezy.
“As we’ve been scaling throughout the UK with Tesco, it’s been a firestarter in every local people as that retailer comes on board,” says Clarke, including that the increase in quick grocery startups has created “a quickly rising marketplace for us too as a result of we’re in a position to scale out alongside [them].”
Such partnerships have supplied Olio with a profitable B2B income stream, its primary supply of earnings. Olio works with 3k companies who’re charged a charge each time a Meals Waste Hero volunteer makes a group — at a price Olio says is extra aggressive than a conventional waste contractor, who would merely get rid of the gadgets.
Olio additionally generates income by a ‘freemium’ mannequin, which continues to be in improvement, the place customers pay £1.99 per thirty days for extra in-app options resembling map views to see the place the closest free merchandise are positioned.
Grocery store’s massive meals waste drawback
Within the UK, it’s estimated supermarkets throw away the equal of 190m value of meals yearly. The nation’s prime 10 supermarkets donate lower than 9% of this surplus meals to be eaten — a February examine by the Waste and Sources Motion Programme (Wrap) estimates that 80,000 extra tons may have been donated.
Stress to type out these surprising meals waste figures is growing, making it extra interesting for supermarkets to staff up with startups resembling Olio or apps like Too Good To Go and Karma, that assist grocery shops and eating places promote almost-out-of-date inventory at discounted costs.
There was criticism, nevertheless, that the recognition of those apps may lull supermarkets right into a false sense of safety — serving to them to keep away from decreasing meals waste within the first place.
Clarke argues that as a result of Olio expenses its enterprise companions, moderately than making a income stream for them, there is no such thing as a incentive to maintain losing meals.
“As a substitute of paying a waste contractor, they as an alternative pay us to assist them get to zero meals waste,” she says, including that it’s not doable for discounting apps and even charity companions to soak up the present quantity of meals waste alone.
“That’s the place Olio steps in,” she says. “In the mean time, the charitable sector is redistributing about 5-10% of the business’s surplus. And by [its] personal admission, as soon as [it] is totally scaled, it’ll be capable to take in a few quarter of the excess. That leaves three-quarters of the meals business surplus with no resolution.”
Campaigners internationally are preventing for tighter rules with regards to grocery store meals waste. In 2016, France launched a regulation prohibiting supermarkets from destroying unsold, however nonetheless edible, meals merchandise. Italy has up to date rules to make it simpler for supermarkets to donate meals, whereas Australia and Norway have dedicated to particular meals waste discount targets.
“We’re very a lot that collector of final resort,” Clarke says of Olio’s relationship to companies. “That real-time distribution into the local people is the mannequin that lets you get to zero meals waste shops, which is the target everyone seems to be attempting to attain.”
Sarah Drumm covers sustainability at Sifted and heads up our new sustainability-focused e-newsletter Maintain. You’ll be able to join right here. She tweets from @sarah_drumm