Qualcomm-backed Aravita wants to help Brazilian supermarkets control food waste

It’s estimated that about a third of all food produced worldwide every year, which is approximately 1.3 billion tons, is estimated to be wasted. Aravita, a Brazilian artificial intelligence startup, thinks that supermarkets are the best place to start fixing this problem.

Marco Perlman, co-founder and CEO, started the company with Aline Azevedo and Bruno Schrappe in 2022 to tackle waste in the fourth-largest food producing country in the world where 33 million Brazilians have some type of food insecurity.

Aravita is developing an AI-powered solution for supermarkets that looks at variables, including climate, seasonality, consumer behavior and economic scenario, to manage the purchasing of fresh food — mainly fruits and vegetables — to reduce the instances of surplus items and lost sales due to waste. At the same time, the software increases the availability of items in demand.

“Supermarkets are our target audience because they are a great place to drive the first wedge of data availability,” Perlman told TechCrunch. “They have point-of-sale consumer data, and this is the data that we need to start making the predictions for low-demand forecasting. Unlike other parts of the supply chain, where the data is much harder to get a hold of, eventually we think that this will be digitized.”

Aravita is still in the very early stages: It has a conceptual prototype and started a pilot with a mid-sized supermarket chain near São Paulo and has the first set of algorithms developed. It is also in the process of integrating the first database of historical data into that model.

However, that first pilot didn’t come easy. Perlman recalls that potential customers were initially worried that startups were “having difficulty raising money, hiring and surviving,” and were uncomfortable giving store data to a company without financial resources that could stick around.

So the trio started reaching out to investors and was able to secure a $2.5 million investment earlier this year, co-led by Qualcomm Ventures and 17Sigma.

“Fresh food management is highly fragmented and complex,” said Michel Glezer, director of Qualcomm Wireless GmbH and director at Qualcomm Ventures, in a written statement. “Aravita’s solution enables retailers to optimize inventory management, helping increase efficiencies and reduce waste.”

Joining those two firms were Bridge, DGF Investimentos, Alexia Ventures, BigBets, Norte Capital and a group of angel investors, including ClearSale partner and CEO Bernardo Lustosa and Flávio Jansen, former CEO of LocaWeb and Submarino.

Aravita is now in good company among other startups tackling food waste that also recently attracted venture capital, including Divert, which is trying to stop food before it reaches landfills; Diferente, also in Brazil, that is finding places for imperfect produce; and food resale app Recelery. They join other companies like Shelf Engine, Apeel, OLIO, Imperfect Foods, Mori and Phood Solutions.

The next steps are to develop the solution over the next few months and add a second pilot customer, Perlman said. He expects to have product-market fit next year and the ability to “step on the gas to accelerate” Aravita’s business model into other supermarket departments, including baked goods, pastry, cold cuts, fish and meat.

The new capital enables the company to hire additional employees and for future innovation, including inventory management, point-of-sale integration and technology development like AI and computer vision for process automation.

Qualcomm-backed Aravita wants to help Brazilian supermarkets control food waste by Christine Hall originally published on TechCrunch

Fresh funding gives cat food brand Smalls avenue into retail for the first time

The pet industry grew rapidly over the past three years as people, stuck at home during the pandemic, decided to add a furry friend to their families. Analysts say this industry, where spending was $118 billion in 2019, isn’t done with big growth and predict it will more than double by 2030 to $277 billion.

This category is very dog-dominated — dog owners spend, on average, $1,480 per year, while an average of $902 is spent annually by cat owners; therefore, there are a lot of dog-focused products, including food.

Some startups in the pet space have tried to give equal footing to both dogs and cats, for example, The Farmer’s Dog, which direct-to-consumer cat food brand Smalls co-founder and CEO Matt Michaelson says is a close competitor. However, there are relatively few that cater just to cats. Smalls is among a small group that includes Cat Person, Ziggy, Made by Nacho and KatKin.

“It became really clear that during the pandemic, adoption was skyrocketing,” Michaelson told TechCrunch. “Cat adoption really outpaced dog adoption, so we expected the category to heat up and that there would be more innovation at this point. However, we’re still really alone in bringing fresh food to the category and to cat parents. That was a surprise to us. We think there’s a continuing manifestation of the cultural bias against cats and toward dogs in the U.S.”

Five years and over four product introductions later, Michaelson and co-founder Calvin Bohn are guiding the company to take matters into its own hands and expand by opening a first-of-its-kind cat café and launching into retail, Michaelson said. This was buoyed by $19 million in Series B funding in a round that closed in mid-2022.

The company has now raised a total of $34 million, which includes a $9 million Series A that TechCrunch covered in 2020. Michaelson didn’t disclose valuation for the most recent round, but did call it an “up round.”

The Series B is led by existing investors Founder Collective, Companion Fund and Left Lane Capital and also includes new investors like Valor Capital, 301 INC, General Mills’ venture capital arm and The Ohio State University’s endowment fund.

In addition to the cat café, which will open in New York in the fall, and retail launch, the new capital enables Smalls to grow its headcount by 25%. The company has 50 people currently.

The brand has doubled year over year in both customers and revenue since 2017, growing to eight figures in sales to feed more than 100,000 cats. Amid all that growth, Smalls also has a path to profitability, Michaelson said.

“We are still a tiny sliver of a $12 billion category,” Michaelson said. “Anyone can advertise on TV or the subway, but only Smalls could open a cat café and it make sense. That’s one example of many things we want to do to build the brand. The other piece is continuing to invest in product innovation. Fresh food is a very fast-growing category, and we think there’s plenty of room in it, but we need to stay one step and two steps ahead of the category to continue to bring healthier food and healthier products to market.”

Fresh funding gives cat food brand Smalls avenue into retail for the first time by Christine Hall originally published on TechCrunch