Spoiler Alert Eats $2.5M to Grow Online Surplus Food Marketplace
About 42 million Americans struggled with “food insecurity” last year, meaning they lacked access to quality food or went hungry at times. Meanwhile, an estimated 30 to 40 percent of the nation’s food supply goes to waste, costing farms and businesses billions of dollars each year.
The leaders of Boston startup Spoiler Alert think software can help solve that troubling irony by making it easier to connect businesses that have surplus food with nonprofits and other organizations that feed the hungry. And investors have an appetite for the idea.
Spoiler Alert says it raised a $2.5 million seed funding round led by Acre Venture Partners, the venture fund backed by Campbell Soup. Other Spoiler Alert investors include the Fink Family Foundation, Valley Oak Investments, LaunchCapital, Fresh Source Capital, FTW Ventures, and a handful of individuals, including Black Duck Software CEO Lou Shipley, said Spoiler Alert co-founder and CEO Ricky Ashenfelter.
“By enabling businesses with unsold inventory to connect in real time with networks of nonprofits and discount buyers, we see an opportunity not only to increase profitability, but also to drive greater collaboration between food manufacturers, distributors, retailers, and farms with the 50,000 nonprofits committed to ending food insecurity in America,” Ashenfelter said in a prepared statement.
Ashenfelter founded Spoiler Alert in June 2015 with Emily Malina, a fellow MIT Sloan School of Management graduate, and Marty Sirkin, a software engineer who is also a trained chef. (The trio is pictured above, with Sirkin on the far left, Malina in the middle, and Ashenfelter on the right.) The company launched its online food marketplace five months later, and it participated in the Techstars Boston startup accelerator this past spring.
The startup’s online marketplace enables food businesses to sell or donate their extra food to food banks, pantries, and other organizations. Spoiler Alert doesn’t handle the transportation of food, but its software manages the connections, communications, payments, and data tracking for customers. It also helps donors claim tax benefits.
Spoiler Alert generates revenue primarily through a subscription-based service for larger enterprises that has more advanced software tools for analyzing businesses’ food waste, potential tax deductions, and community impact. Spoiler Alert’s enterprise customers include global food distributor Sysco. The startup also charges a transaction fee for food sales handled by its software; the fee is waived for nonprofits and doesn’t apply to food donations.
More than 200 organizations in the New England region have registered on Spoiler Alert’s system, the startup said. The company plans to use the new funding to expand the marketplace’s availability to more locations, and to grow its team from six employees to as many as 20 people by the end of 2017, Ashenfelter said.