A startup focused on reducing food waste has secured another $10 million in financing, including from Walmart Inc.'s founding family.
Colorado Springs, Colo.-based FoodMaven Corp. said Jan. 24 that the funding comes from sources including members of the Walton family, as well as San Francisco-based Tao Capital Partners.
Isaac Pritzker, son of Tao Chairman Nicholas Pritzker, will join FoodMaven's board of directors as an observer on behalf of the private equity firm. Pritzker will join Lauren Baron, an investment manager at Walton Enterprises, as well as former Whole Foods Market Inc. co-CEO Walter Robb.
The company, which sells produce and other foods with cosmetic defects to restaurants, hotels and other food-service operators, has grown its business in recent months, setting up operations in Dallas and purchasing Anderson Boneless Beef Inc., a Denver-based meat processor.
In part, the $10 million will fund those expansions, FoodMaven co-founder, Chairman and CEO Patrick Bultema told S&P Global Market Intelligence. The acquisition of Anderson gives FoodMaven a U.S. Agriculture Department-certified facility where it can cut and distribute leftover meat from ranchers and other sources, Bultema said.
But FoodMaven is also planning to beef up its technology and data infrastructure. The company wants to provide product recommendations tailored to customers, Bultema said, adding that the company's ultimate goal is to connect suppliers that have imperfect food with buyers in the same way that Uber Technologies Inc. connects drivers with passengers.
"We're doing a very analogous thing with all this food that's getting lost in the marketplace," the CEO said.
The latest investment comes about one year after FoodMaven secured $8.6 million in series A funding, a round led by the Waltons. The company said the $10 million "provides momentum" going into a series B round that could bring $50 million to $70 million in fresh capital to the company.
FoodMaven is among multiple companies trying to turn food with visual imperfections into a business. Emeryville, Calif.-based Imperfect Produce also sells fresh fruit with cosmetic flaws, though it focuses on delivering produce directly to consumers. In May 2018, U.K. supermarket operator Tesco PLC debuted a selection of juices made from fruits that would have otherwise gone to waste because of imperfections.
Such ventures serve an environmental purpose as well as a financial one. Up to one-third of fruits and vegetables produced in Europe were considered "too ugly to sell," according to a 2018 study by researchers at the University of Edinburgh, meaning that large amounts of produce never made it to store shelves and were discarded.
"It's really a belief that you can make investments and realize capital returns and also get social impact returns as well," Bultema said.