Today Karma, a Stockholm, Sweden-based startup fighting food waste, announced a $12 million Series A fundraise. The round is led by Swedish investment firm Kinnebick, with participation from Bessemer Venture Partners, Electrolux, and others. This brings Karma’s total funds raised to $18 million.
Launched in 2016, Karma is a mobile app that helps retailers sell excess food to consumers at super-reduced prices. The only rules are that the food can’t be past its legal sell-by date and that retailers must list it for at least 50 percent less than its original price.
Karma hopes to distinguish itself from competitors who also create new retail channels for food waste, such as Too Good To Go, by offering meals from high-end restaurants (even those with Michelin stars). They also emphasize transparency: they require retailers to be 100 percent clear about which foods or dishes they sell each day, so a user knows exactly what they’re getting.
“There’s a risk that when you talk about surplus or waste, people worry it’s low quality,” Karma’s VP of International Development Alex Spain told The Spoon a few months ago. “We want to make it seem like they’re not just picking up leftovers; we’re just trying to optimize supply and demand.”
Though the majority of Karma’s participating retailers are in Sweden, the app rolled out in the U.K. in February, 2018. Karma currently works with over 1,500 grocery stores, bakeries, cafés, and other food establishments, 300 of which are in the U.K. As of now, over 350,000 people have used the app to purchase surplus food. That’s none too shabby, but also pales in comparison to the reach of Too Good To Go, which has over 3 million downloads and is active across eight European countries.
The main investor name that jumped out for me is Electrolux. In Karma’s press release, Marty Carroll, Global VP of Digital at Electrolux stated, “As a world leader in appliances, Electrolux is working closely with Karma to help alleviate the global problem of food waste.”
How will the world’s second-largest appliance maker, also based in Sweden, make use of an app which facilitates B2C sales of surplus food? Will Electrolux customers of the future be able to discover recipes based off the surplus produce they purchased through Karma? Which they could then cook in their Electrolux smart ovens? After walking through the recipe with guided cooking app SideChef, which recently partnered with (you guessed it) Electrolux? Just some thoughts.
This investment also fits in well with Electrolux’s Food Foundation, which supports sustainable food projects around the world. The company has already partnered with several food waste initiatives through the foundation. They even created a documentary entirely dedicated to the subject.
Karma will use their newly raised funds to add over 65 positions and extend their reach to new stores. They’ll also expand to new markets, starting within Europe. The plan is to be in 150 markets by mid-2020. Let’s hope they don’t let their new funds go to waste. (Get it?)