Afresh said the round was sparked by investor interest due to Afresh’s growing list of customers. The round was led by Food Retail Ventures and joined by existing investors Innovation Endeavors, Maersk Growth, and Baseline Ventures.
The San Francisco-based startup also is welcoming food industry veteran James McCann to its board. McCann is CEO of Food Retail Ventures and a former CEO of supermarket giant Ahold USA.
“I believe that the fresh ordering technology that Afresh has pioneered is set to become one of the most important technologies in food retail,” said McCann, in a statement. “The improvements to freshness, sales, shrink, labor and, as a consequence, profitability, are truly transformational.”
Afresh said its technology, which is powered by artificial intelligence, helps grocers control food spoilage by optimizing merchandising, ordering and department operations. Users are able to reduce food waste by 25 percent, on average, increase produce operating margins by at least 40 percent, and grow revenue by 2 percent to 4 percent, the company said.
In an interview with PYMNTS earlier this year, Afresh Co-Founder Matt Schwartz said the problem with stocking fresh groceries lies in inventory management. Grocers large and small are still using pen and paper — or Excel spreadsheets, in particularly advanced cases — to figure out how many fresh goods they should be ordering. The millions of tons of products being thrown out each year indicates that, by and large, those back-of-the-envelope calculations are far from efficient.
Schwartz said Afresh aims to inject better efficiency into the product by using learning algorithms to review product data over time, and to better guide store staff on how much to order (and when) to meet likely demand while reducing overall waste.
“Fresh food is so dynamic,” Schwartz added. “This helps us make decisions in a way that accounts for a lot of the uncertainty.”