Food sharing app OLIO raises $43M Series B, as the world switches on to the food waste crisis?

Food sharing app OLIO raises $43M Series B, as the world switches on to the food waste crisis?

In 2018, OLIO, a U.K.-based firm with an app that allows users to take photos of undesirable food and share them with the local community, received $6 million in Series A funding. Many outside observers puzzled over what was going on with this simple software, which at first glance appeared to be little more than a community bulletin board for discarded food. How could such a simple concept have garnered the attention of significant investors like Accel? The answer is far more intriguing than its humble beginnings suggest, and the creators of OLIO, Tessa Clarke and Saasha Celestial-One, who founded the company out of irritation with food waste, now demonstrate that they may be onto something very huge.

OLIO has now raised a Series B investment of $43 million:

The newest round was led by Swedish investment firm VNV Global (the publicly traded fund that has funded Avito, Delivery Hero, and Babylon) and New York-based hedge fund Lugard Road Capital/Luxor (an NYC hedge fund with expertise in marketplaces). Existing investors include Accel, Octopus Ventures, Rubio, technology entrepreneur Jason Stockwood, and Lord Waheed Alli (a media entrepreneur and politician). In addition, DX Ventures, the venture capital arm of food delivery company Delivery Hero, has joined the round as a very strategic investor.

With this new war chest, OLIO intends to accelerate its international expansion plans and grow its Food Waste Heroes Program, which aims to help food enterprises and restaurants achieve zero food waste, lower their environmental impact, and minimise their carbon footprint.

In addition, it will concentrate on ten important markets in Latin America, Northern Europe, and Asia, where the company reports strong organic growth:

Clarke and Celestial One founded OLIO in 2015, and at first it appeared to be more of a nonprofit than a rocket-ship firm, allowing users to give away unused food and other household products to their neighbours for free. Perhaps what set it apart was its mission-driven founders, who were and continue to be deeply committed to minimising food waste in the home and assisting individuals in consuming more locally and sustainably. But it also proved to be a boon for local food businesses, such as restaurants, which found they could not only give out food sustainably but also improve their image with local customers. This growth hacking strategy has enabled OLIO to expand into large corporations such as Tesco, which this year added 2,700 U.K. stores to its platform, redistributing nearby leftover food via OLIO’s network.

OLIO was created by Clarke, the daughter of a farmer, who could not stand to see food go to waste. The app now has over five million users who have saved 25 million portions of food (equal to 75 million car miles) and three million non-food items from the landfill. According to the company, half of the food posted on the app is requested within 21 minutes.

Global food waste amounts to a staggering $1.3 trillion each year. In addition to food loss, this results in massive volumes of CO2

Clarke stated in a statement (see full TechCrunch interview below):

Over the past year, OLIO has expanded by a factor of five, representing a paradigm shift as businesses and citizens want to become more sustainable and connected to their local communities. We are ecstatic to have raised this funding from a group of smart investors that support our goal of rethinking consumption for over one billion OLIO users by 2030. Humanity cannot continue to worry over how to keep global warming below 1.5 degrees Celsius and feed a population of 10 billion while continuing to waste one-third of the food we produce and eating as though we have 1.75 planets. We intend to develop one of the most revolutionary firms of our generation by resolving these dual issues.

OLIO reports that their Food Waste Heroes initiative has over 30,000 participants at present. These “trained community members” collect and redistribute leftover or unused food from businesses like Pret A Manger, Compass Catering, Costa Coffee, and Elior.

Clarke stated that increasing ESG commitments are driving demand from U.K. and foreign businesses to minimise their waste: “Inquiries from large retailers, supermarket delivery services, and fast-food brands are pouring in.” “OLIO is one of the easiest and most cost-effective ways for a business to achieve zero food waste.”

But OLIO is not only capitalising on people’s desire to eliminate food waste; it has also been boosted by the pandemic, which compelled people to reside and socialise locally:

This indicates that its “MADE” area, which allows users to buy and sell local homemade foods and handcrafted goods, has attracted a significantly larger number of users. It also includes a “GOALS” section that features over 100 easy “swaps.” In other words, OLIO has uncovered a possible local borrowing or renting avenue. This put it in the position that Facebook Marketplace would kill to be in.According to the company’s founders, “Borrow” and “Wanted” will be released within the next six months.

The new Series B round will also be used to increase the size of the OLIO team from 40 to around 175 members:

Per Brilioth, CEO of VNV Global, which led the round, stated, “OLIO’s growth over the past year has been nothing short of remarkable, and it’s apparent that consumers are growing increasingly concerned with the simple steps they can take to improve the sustainability of their homes.” “OLIO, a next-generation community marketplace with the potential for genuinely global reach, is perfectly positioned to service this movement and develop a potentially transformational company in the process.”

Duncan McIntyre, managing partner of DX Ventures, stated, “Having created a robust and rapidly expanding user base, OLIO is addressing the global food waste issue in a scalable and sustainable manner.”

As demonstrated in my chat with co-founder Tessa Clarke, OLIO has a grand ambition that extends far beyond food sharing.

Mike Butcher: Would you say that this is the narrative of a startup that began with a simple concept but has now expanded substantially?

Tessa Clarke: Yes, it is a mirror of the current state of the planet, in that we are becoming aware of the climate catastrophe. And in a post-COVID world, OLIO makes an incredible amount of sense. People are recognising “I want to interact with my neighbours” at a rapid rate, resulting in a growth rate of nearly fivefold in the past year. I detest having to discard items. I would like to feel connected to my community and empowered, as if I am making a difference.

Why do you believe food companies have joined your food waste programme?

They have read the IPCC reports and are aware that they must reach net zero emissions. Now, they must have an appropriate ESG approach. The Food Waste Heroes programme segment of the business is thriving. Businesses have spent the past number of years initiating numerous projects through their supply chain in an effort to decrease and eliminate food waste, resulting in an exceptionally robust pipeline. They have completed all of these projects and are now working with charities and discounting applications, and they have reached the unavoidable conclusion that they must collaborate with OLIO to achieve zero food waste. Consequently, we have spent the past year expanding fast with Tesco across their retail network.

What effect does the expansion of regulations and demand for ESG standards have?

In analogy, child labour was pervasive in the fashion industry for a very long time. Now it is monitored and measured for extinction. Now, the same is occurring with food waste. No longer is it appropriate to have a large trash can in the back of the store where perfectly edible food is discarded. Your consumers are calling you out on social media, and your employees are informing you that they do not want to be compensated for daily food waste. Therefore, if you are a high-street business, employee retention is one of your top three challenges.

A Series B round does not occur just because investors wish to discard a ready-made meal. Can you elaborate on how OLIO delved into the circular economy and interacted at the business level with these large corporations?

Correct. Tesco created a video to commemorate our first year of collaboration.We’ve saved over 5 million meals, and for them as a corporation to be able to reposition themselves as a pioneer, a leader… that will go through all of their social media channels, all of their marketing channels, and it will send a really strong signal to their employees and customers that they’re committed to achieving net zero. Other huge corporations are paying attention and want to follow suit.

When first exposed to this concept, a sceptic may have thought it was adorable.Do you believe that your dismissive attitude allowed you to go under the radar in order to build these grassroots enthusiasts using a growth-oriented strategy?

Absolutely correct; we have significantly evaded detection. We have been grossly underestimated because of our outside appearance and perhaps because we are a woman-owned firm. When we first began, no one was aware of our long-term goals. We’re rooted in the community, and Saasha and I could see very clearly where the world was heading, so we’ve created a very solid, genuine mission-driven enterprise. We have 50,000 ambassadors who are spreading the news about OLIO across the globe to anyone who will listen, and this figure is increasing daily. We have 30,000 trained volunteers, and every month we recruit thousands more to redistribute leftover food in their local communities. We frequently hear, “We serve the community and despise trash.” We are tapping into a very human trait, the aversion to waste. We’re also tapping into something else extremely human: the fact that it feels great to donate something you don’t want to a neighbour who would appreciate it. It’s rewarding to give to others. And, since the implementation of COVID, more than 40% of our community members have reported feeling less lonely.Over nine million people in the United Kingdom report feeling lonely on a regular basis. This is extremely potent content that is not immediately apparent when opening the app. But once they try it for the first time, they realise the difference is “night and day.”

Did you design the app’s appeal in this manner, or did it arise naturally?

We are unabashedly ambitious, and our mission drives us. Food waste, if it were a country, would be the third-largest source of greenhouse gas emissions. We are accelerating toward a three- to four-degree warmer globe, with inconceivable repercussions. Each year, an area greater than China is used to cultivate food that is never consumed. One-fourth of the world’s freshwater is used to grow food that is never consumed. Everyone is becoming more knowledgeable about the truth of the climate crisis. Increasing numbers of people recognise that addressing the issue of food waste is the most important step in resolving the climate crisis. Saasha and I are incredibly ambitious because we feel that, as a species, we cannot continue to sit here and scratch our brains and wonder, “How are we going to protect the globe from warming by 1.5 degrees?” How will we continue to feed 10 billion people if we continue to waste a third of the food we produce? Our ultimate goal with OLIO is to radically rethink how people consume. Currently, people purchase items such as washing machines and then discard them. This is the current consumption paradigm for humanity. And the paradigm we are promoting is: “I still want to consume, but I’m going to explore what already exists in my local community for free and faster than Amazon Prime delivery, and it feels amazing to experience it.” I will take for free everything my neighbours do not want. We are also launching as loan facilitators. And when people are in the market for something new, we want them to purchase it locally, understand its history, and consume more responsibly. We intend to undermine everything that Amazon and Facebook represent. We would like to be the cure for this.

Do you believe this places you on par with NextDoor ($4.3 billion) or Facebook Marketplace?

Yes, on Etsy and Facebook Marketplace. NextDoor is optimised for neighbor-to-neighbor information sharing, whereas we are optimised for neighbor-to-neighbor item sharing. That is a significant difference. The second significant distinction is that sustainability is woven into our DNA, our raison d’être. This army of 6,000 volunteers collects thousands of items each day. Thousands of individuals are picking up unsold food from their local canteen, bakery, or grocery store and bringing it home. It takes an average of 21 minutes to request an item through the app. This community-based, hyperlocal, real-time redistribution network was constructed.

With a funding round of this scale, it’s clear that your investors see a tremendous opportunity that goes beyond people eating a sandwich that’s about to explode. Clearly, you have access to and data on things that probably no other organisation does. What would happen if NextDoor introduced food sharing or Etsy opted to target the local market?

There is no one else in the world doing what we are doing. There are several reasons behind it. One, it’s extremely difficult, and it’s been a bloody long journey to get here.Moreover, when I consider my competition, I envision the garbage can. That is my opponent. Consequently, I must develop a product experience, a community, and a brand marketing strategy that compete with this, such that instead of throwing things away in one second, someone can use the OLIO app to give something away in 10 seconds… We have spent years improving the process of linking neighbours to swap items in a way that is easy, secure, quick, and enjoyable. Other companies may attempt to expand into our market, but I believe that what we’re doing is paving the way for the complete reinvention of consumerism and, eventually, capitalism. As this is a brand-new area at the moment, several players are inevitable.

This may be a provocative question, but do you think this entire concept would have come from a male?

No. But if a male had conceived of this idea, he would have had a metric crap-ton more financing than we’ve had thus far! I’m being a little facetious, but I truly strongly support that position. Our group fluctuates between two-thirds and three-quarters female from month to month. And the reason for this is that women are still primarily responsible for food preparation in the house, which is our heartland and origin. They are equally responsible for decluttering the home and maximising the use of household resources. And this also hits on a fundraising problem, which is that it might be difficult for males to grasp the use case we are discussing because they aren’t the ones maintaining the delicate balance of supply and demand for food in the fridge each week. It is difficult, especially if you have a family. In addition, our female audience likes the connection to the community immensely. Consequently, only a guy could have conceived the idea. I believe that much of what OLIO is doing stems from a feminine perspective on the world, which is “I despise trash and care about the environment.” If you speak with anyone in the environmental movement, you will notice that it is overwhelmingly dominated by women. Everything associated with community is dominated by women. Everything related to food and purchasing food is overwhelmingly dominated by women. I am the daughter of a farmer from North Yorkshire. I had a really impoverished background, working extremely hard alongside my two younger brothers on the family farm. And when you are raised in such a thrifty lifestyle on the land, you develop a pathological aversion to food waste. So the epiphany occurred six years ago when I was moving and needed to pack up my home and throw away the food in the refrigerator… I abruptly declared, “I’m not doing this,” so I stopped packing, bundled up my infant and toddler, and set out into the streets carrying this food, trying to find someone to give it to, only to be unsuccessful. That was the time when, after working in the digital realm for almost ten years, I pondered why there wasn’t a simple app that would allow me to post my meal for a neighbour to pick up. I discussed the concept with Saasha, my co-founder. The majority of people thought I was insane, but she completely understood, and then we fell down this rabbit hole of researching the issue of food waste, discovering that a trillion dollars’ worth of food was being wasted, recognising the environmental impact, etc. We concluded that the reason individuals throw things away is because they are no longer connected to their community; they have no one to share their extra food with.

Do you believe the impact of the pandemic boosted the business?

First, there were tens of thousands of images showing empty store shelves, which served to remind individuals that food is their source of sustenance. People also desired to connect with their local community in order to give or receive assistance. For many, staying at home to help did not feel sufficient, but being able to provide extra food did. During our “Cook for Kids” campaign, over 30,000 meals were cooked, prepped, and offered to local families via the app. Thirdly, individuals lived and worked at home. Consequently, the OLIO exchange became simpler. I wasn’t attempting to schedule it between seven and nine at night; I’m around all day, and to be honest, it’s a beautiful way to break up the day, visit with dogs, walk the dog, get some exercise, etc. Consequently, people now live locally. And last, as we began the conversation about rebuilding, people understood they did not need a daily Starbucks espresso in order to be happy. In conclusion, I believe it was the best thing that could have happened, as it highlighted the climate disaster as the existential issue facing humanity now. Everyone has awakened and recognised that action is required. And on OLIO, it only takes 10 seconds to give away unwanted items. You have a neighbour who is happy and smiling, and you have saved the earth.

I assume a funding round of this type signifies international expansion:

We’ve been able to track the statistics for the past six years because we’ve been available internationally for that long. We have witnessed its expansion in countries such as Singapore and Mexico. These countries would not have been at the top of my list for international expansion. In Latin America, for instance, we’ve had phenomenally successful traction. I’ve also witnessed other founders waste a great deal of money and time trying to crack America too early. OLIO First, we want to expand outside of the United States, so it makes sense for us to target these other areas. In addition, we receive several requests from large international merchants in other areas to bring the food waste programme to their markets. It is therefore a combination of analysing where we see organic traction and where we receive partner-generated interest.