Motatos, the online discount supermarket selling food that would otherwise go to waste, has been changing the food retail game since 2014. By extending its operations beyond the Nordics into regions like Austria and Germany, the company has positioned itself at the forefront of the battle against one of the most pressing global issues – food waste.
Northzone partner Jessica Schultz had a Fika with its founder Karl Andersson. They delved into the inspirational journey that led to the creation of Motatos, the exciting future prospects awaiting the company, and the transformative impact the initiative is already rendering.
With approximately one-third of the global food supply going to waste annually you’re on a mission to alter this reality for good. We are eager to hear more about your inspiring journey and understand the origins of Motatos. Could you start by sharing how the concept came to life?
My co-founder and friend, Erik Södergren, once managed a grocery store in Sweden and was confronted with mountains of overstock products, seasonal goods with short best-before-dates that were regularly going to waste. He couldn’t understand why perfectly good food was being thrown away without having actually gone “bad”. His solution? Buy these products from suppliers, set them up in a corner of the shop and sell them at a discounted price.
The new deals were flying off the shelves and Erik soon realised the potential this had to become something much bigger. That’s when he reached out to our third co-founder, Ulf Skagerström, and me. Every conversation we had about Motatos only heightened our enthusiasm, we could immediately see the value-add and scalability something like this had. Erik had tapped into one of the biggest climate and social challenges of our time.
By 2014, the boom in online shopping created a fertile territory for us to expand this idea and reach customers across all of Sweden – that’s when Matsmart was born, it only become Motatos later when we expanded into international markets. Today at scale, we continue to give suppliers the opportunity to give their products a second chance on the market, creating a better fit between supply and demand and let customers have the benefit of this through very low prices. It is a win-win-win for the planet, the food producers and people’s wallets.
As investors, we're always going on about how hard it is to find the best companies, but the truth is finding Matsmart was totally different – you guys came to me! I was just getting my feet wet as a VC in 2014 after leaving HelloFresh (that Jessica co-founded in 2011), and one of the first calls I got was from you. And you’ve kept impressing everyone since then.
One of the key successes of Motatos is your ability to run perfect logistics: given your mission is to distribute quality food that would otherwise go to waste, the need for a well-oiled supply machine is critical. How does it work behind the scenes?
Logistics are at the centre of any financially sustainable retail company, and that’s where the real value of our business is created. Naturally, as the demand continued to grow, that was our main focus for optimisation. At the very start, our team would do everything manually: people would literally come to work in gym clothes!
Customers like to have a seamless shopping experience whether it’s in person or online and digitalising and optimising our processes has allowed us to be more efficient and reliable.
Today, everything is done in a systematic way, we have robots that have made our physical processes scaleable, and the automation of our climate-smart Nordic warehouse is the key to us now moving steadily towards profitability, which we already are in Sweden. Our commitment doesn’t stop at logistics: we have installed solar panels on our roof, providing nearly half the energy needed to run the warehouse, which is great.
Food is such a big part of any culture. As you’ve expanded into new markets are there any big differences you’ve noticed in how Motatos has settled in once introduced? Tell us a bit about your experience expanding to other countries and how these new territories have shaped the ethos and operations of the company.
Food is such a big part of any culture and so, as a global brand with local assortment, we’re essentially tackling the global food waste problem locally. This also makes our business model a lot more complex compared to other international brands. Every new market we venture into, we need to cultivate local relationships to tailor our approach to cultural nuances. Our digital product is scalable, but the physical business behind it has completely different prerequisites. It’s all about adaptability.
Then on the consumer side, the brand is positioned a little differently between markets, to some extent I think digital maturity plays a significant factor. Currently, our biggest markets are Sweden and Germany, yet interestingly our main customers are from completely different age demographics. We’re also active in Denmark, Finland and Austria.
Despite the difference between markets, a common thread runs through all of them: people either love our mission and are proud to be a part of it, or they simply love a good bargain, or both!
Motatos has a societal mission, on top of being a great company – can you give us an overview of the impact the company has had on food waste and what are your plans for the future to further contribute to this issue?
The global food system is extremely inefficient and harmful to our planet. So far, we have recirculated over 60,000 tonnes of food and consumer products. The importance of this can be illustrated by the carbon value of these products, worth more or less the same amount, around 60,000 tonnes of carbon dioxide equivalents.
To put that into perspective, the world has around 7 billion smartphones. The food we have recirculated is worth the same amount of energy it takes to power all of them. 60,000 tonnes of carbon is 25 million litres of gasoline. In Swedish crowns, that’s half a billion worth of gasoline. The more we grow, the more we can contribute to a sustainable future and drive meaningful change.
I couldn’t agree more. It's been so great watching Motatos grow and your success is definitely a testament to the drive you all have. Are there any upcoming prospects you’re particularly excited about?
Thanks, Jessica! Yes, I’m very excited about our expansion plans ahead. In the next five years, we will have grown our business five times and will also have reached profitability on a group level. We currently have 700,000 active customers and in 2022 alone, we saved 25,000 tonnes worth of food, around 20,000 tonnes of carbon. We’re in a volume game and growth means we can have a bigger impact on the system we are trying to change. We’re passionate about our mission and excited to keep growing.
Lead image via Motatos.
This story is syndicated via Northzone.