TreeDots, Asia’s first vertically integrated food supply chain ecosystem, announced today that it has successfully closed an oversubscribed US$ 11 million Series A fundraise. The round was co-led by East Ventures (Growth fund), the leading sector-agnostic venture capital firm in Indonesia, and Amasia, a thesis-driven venture capital firm investing in sustainability via behavior change. Other investors included ACTIVE Fund, Seeds Capital, author Nir Eyal and actress Fiona Xie.
Tackling inefficiencies in the food supply chain, TreeDots began as a surplus food marketplace for businesses and now also serves consumers through a social commerce platform. The company has recently expanded to logistics optimization services to help enterprise customers build more efficient supply chains. The company started its operations in Singapore, expanded into Malaysia last year, and expects further regional expansion ahead.
Globally, one third of all food produced for human consumption is lost or wasted. In Asia, the majority of the problem is caused by inefficient supply chains. Aesthetically imperfect food often finds its way to the landfill, even though it’s just as fresh and nutritious as the normal goods found on grocery store shelves. These oversupplied foods are often incinerated or left to rot, emitting methane, a greenhouse gas that is up to 86 times more harmful for global warming than carbon dioxide.
“We realized that a grocery chain might not buy a chicken that’s too big or has a broken bone because it looks funny on their shelves. But F&B outlets don’t care because they will cut it, plate it and make it look nice before serving. So if they can purchase essentially the same product at prices up to 90 per cent cheaper than alternatives, they are very happy. This original insight drove us to start an oversupplied foods marketplace to match supply and demand for these products,” said Tylor Jong, Co-Founder and CEO of TreeDots.
While buyers on the TreeDots platform consisted of mainly F&B franchises to start, the company found that a growing segment of consumers also understand the value proposition. To respond to this demand, the company additionally launched a social commerce platform that allows consumers to purchase these same products at heavily discounted prices. TreeDots delivers a number of orders to one address, and neighbors pick up their goods from this household in a group buying model. This allows for savings on logistics costs for buyers, and also decreases emissions compared with a traditional e-commerce model that requires a trip for each order delivered.
On the sell side of the platform, suppliers often would pay money to send their surplus goods to the landfill before working with TreeDots. But now they can earn incremental revenue for these goods and feel good about helping the planet. TreeDots also helps to digitize suppliers’ operations using an app, and the company recently launched TreeLogs, a cold-chain logistics offering that drives efficiency for suppliers’ existing operations.
“Food loss is already a trillion dollar problem, but what got us really excited was the fact that suppliers started to use the system for all of their revenue, not just food loss products. If one of their trucks could make one delivery to a zone, TreeDots could make five deliveries on that same trip working across suppliers. The increased network density allows for decreased logistics costs and lower emissions,” said Roderick Purwana, Managing Partner at East Ventures.
TreeDots’ gross merchandise value (GMV) has grown over 4x year-over-year. “Many businesses serving the F&B industry have struggled during the pandemic, but we’ve been very impressed with the team’s ability to drive exponential growth in the midst of difficult circumstances,” said John Kim, Managing Partner at Amasia who also led TreeDots’ seed round in 2019. “We’re excited to support TreeDots in this next chapter and co-lead the company’s series A with our friends at East Ventures.”
Janet Sarah Neo, Vice President, Corporate Sustainability & Government Affairs at Lazada and Executive Board Member at Temasek Foundation Liveability, will be joining TreeDots as a Board Observer.