Consumer/Ecommerce/News/

Motatos raises €24m to expand its discount food waste deliveries to new markets

With almost €60m raised this year discount startup Motatos plans to launch in a new market in 2022

By Mimi Billing

Ulf Skagerström and Karl Andersson (right). Photo: Magnus Sandberg

The pandemic has made more consumers comfortable with buying food online. This shift, combined with a widespread awakening to the issue of food waste, has startups licking their lips.

One of them is the online discount food store Motatos, or Matsmart as it is locally known. The company today announced a €24m raise led by the London-based equity firm Blume Equity.

It’s also the second largest round in the foodtech sector in Sweden this autumn, after healthy snacking brand Nick’s $100m Series C last month. It’s a sign that foodtech in the Nordics has become a serious contender to well-financed sectors such as fintech and healthtech.

“There has been a huge spike in interest both when it comes to sustainability and online food shopping. These are megatrends that are completely in line with our business, and our greatest challenge right now is to manage our growth”, Karl Andersson, chief executive and cofounder of Motatos, tells Sifted.

“We want to make it simple and fun to live sustainably”

Motatos has seen its valuation double since it raised €35m in March, according to Andersson. According to the Swedish tech site Breakit, the spring round was done at a pre-money valuation of 1.4bn SEK (€150m).

In the foodtech sector, Motatos is nudged between startups selling excess foods from stores and restaurants, like Swedish Karma and Danish Too Good To Go, and grocery delivery companies like UK’s Ocado, Norway’s Kolonial and Picnic in the Netherlands.

Instead of competing with companies with same or next-day deliveries, Motatos focuses on dried foods such as oats and rice that are either in excess or getting close to the expiry date at producers like Nestlé and Unilever. Goods like cooking sauces, jams and even hygiene products are also available, all of which would otherwise end up in landfill.

The first countries outside of Sweden that Motatos expanded to were Denmark and Finland. The company has since grown its overseas ambitions to Germany, where it launched with a single warehouse in May 2020.

Unlike other grocery delivery companies, Motatos does not need refrigerators or freezers to store inventory. That means that it can use one warehouse outside Berlin for deliveries to the whole of Germany. For deliveries in Sweden, Finland and Denmark, they are about to open a new, completely automated warehouse in the Swedish town of Örebro.

Motatos’s beginnings

When Motatos was founded in 2013, there was no competition to speak of and food waste was rarely a topic in the media, at least not in the Nordics. Motatos soon managed to get some key investors including David Frykman, partner at Norrsken VC and the European venture capital company Northzone (who invested in 2015). Others like SEB Private Equity, Ikea and the German VC Leadx Capital Partners followed.

When the startup raised its previous round earlier this year, its aim was to continue focusing on its existing markets. With the additional €24m, Motatos is preparing to expand to a new market in 2022. According to Michelle Capiod, partner at Blume Equity who led the round, there are a number of interesting options.

“Motatos has built a highly scalable platform with a scope to become global. Initially, we are focusing on Europe and we are looking at a number of markets, especially the bigger ones. The company has already done a great job in Germany but that is just the beginning,” Capiod says.

Neither the company nor the investors want to disclose the next market. However, since Motatos is recruiting a UK country manager and says that “the UK is next up” in the description, this is likely to be where it will launch next year.

Motatos plans to launch its sustainable discount ecommerce in the UK in 2022. Photo: Magnus Sandberg

Visiting Motatos’s website is like entering a discount store of early internet days — completely different from what you would expect of a food sustainability startup. But there is a thought behind it, according to Hanna Thofelt Lindström, head of communications and sustainability at the company.

“We want to make it simple and fun to live sustainably. The shopping experience we offer is also a way to differentiate ourselves from other sustainable choices that are often a premium segment. We are the opposite,” she says.

With a customer base increasingly accustomed to next-day deliveries, Motatos is cutting costs by letting customers wait up to a week for their goods. However, they’re not always happy with it, according to feedback on Trustpilot.

“This is something we are aware of and have cut down on delivery times to two to a maximum of five days. However, to be able to offer the deals that we do, we need to balance the equation”, Andersson says.

Mimi Billing is Sifted’s Nordic correspondent. She also covers healthtech, and tweets from @MimiBilling

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