Building a more sustainable food supply chain. Our investment in Babaco Market
November 23rd, 2022
Today, we are delighted to share that we are leading a €6.3 million Series A round in Babaco Market, the subscription e-grocery service that saves ugly & odd foods from suppliers and delivers weekly unordinary boxes directly to customers’ homes.
Founded in 2020 by Francesco Giberti and Luca Masseretti, two second-time Italian founders passionate about food, technology, and sustainability, Babaco Market recovers grocery items that would have otherwise gone to waste, creating a more efficient and equitable food system. It buys from farmers high-quality, seasonal produce that could not be sold to stores for merely aesthetic reasons (too big, too small, shaped in weird manners, or with discolorations) and sells it to subscribers at a discounted price. Babaco Market rethinks the food supply chain in a way that can help the industry to solve its sustainability problem.
In two short years, Babaco Market has developed into a rapidly growing business serving thousands of loyal customers. Francesco and his team have enormous ambition and proven traction – we are excited to work together as they continue to develop their product and reach a greater scale, delivering Babaco Market’s no-waste philosophy and sustainable grocery throughout Europe.
Below are some of the highlights which drove our decision to invest.
- Food waste represents nowadays a huge problem to solve. Globally, it is estimated that around a third of the food produced is wasted – fruits and vegetables that are either not harvested or discarded because they do not meet consumer expectations or retailer specifications count for a large part. According to the last Fusions report on European food waste levels, 88M tons of food is wasted in the EU annually, and 26.4M tons is wasted at the production and processing level, where Babaco Market works. Not only is this a waste of precious resources, and a direct cause of climate change. Farmers miss out on potential revenue, as produce food loss volumes have a market value of ~$115B/year. By encouraging the consumption of fruits and vegetables from quality independent producers in an innovative distribution system, Babaco Market offers a solution to this problem.
- Customers love Babaco because they want to make a difference, want a more sustainable world, and want to eat healthy food at a fair price. People across Europe are shifting toward a healthier lifestyle. Where products come from, their packaging and the retailer’s reputation are increasingly powerful factors in consumer decisions. On these foundations, Babaco has been able to build a strong customer base and a community of #babacolovers.
- A strong founding team with hands-on experience and deep knowledge of the market – Francesco Giberti and Luca Masseretti previously built Myfoody, the first Italian startup that tackled food waste, sold in 2021 to a French food-tech company, Phenix SAS. We believe that they have the skill and ambition to drive Babaco Market to success.
We are excited to welcome Babaco Market to United Ventures’ portfolio and support Francesco, Luca, and the entire Babaco team on the company’s growth path!
PS. Curious about what a babaco is? It is a star-shaped fruit. At first glance, you might mistake it for bell pepper, but if you taste it, it tastes a little like pineapple and strawberry. A real fruit out of the ordinary by nature and the perfect name for this game-changing company.
Read more about Babaco’s Series A in the Press Release (ENG–ITA).
UV2’s investment in Babaco Market is also supported by the European Investment Fund through InnovFin Equity, with financial backing from the European Union under the financial instruments of Horizon 2020 and the European Fund for Strategic Investments (“EFSI”) established under the Investment Plan for Europe. The purpose of EFSI is to support the financing and implementation of productive investments in the European Union and ensure greater access to finance.