FoodMaven, a Colorado Springs-based startup, is getting an $8.6 million infusion - largely courtesy of the nation's richest family.
The company announced the close of an $8.6 million Series A financing led by members of the Walton family of Walmart fame.
"In the world of venture capital, Series A is kind of your first 'we're making it' financing," said Patrick Bultema, chairman, CEO and co-founder of FoodMaven. Previously, he said, there had been seed funding "and then some folks who invested to be part of the Series A financing."
But the Walton family members dominated the investment round, Bultema said.
"Obviously they know a little bit about the food system and are really looking for things that are not only for profit but have a positive social impact," he said. "So they actually reached out to me and said, 'Hey, we've learned about what you're doing and we would like to talk with you if you're open to an investment.'"
FoodMaven seeks to capture and sell what otherwise would be lost food; the National Resources Defense Council estimated in 2012 that up to 40 percent of food in the United States is wasted. Through an online marketplace, FoodMaven buys surplus food from grocery stores and distributors and sells it at a discount to restaurants, institutional kitchens and commercial food preparation businesses. Food that doesn't rapidly sell in the marketplace is donated to charity.
That mission of reducing food waste was a hook for Walter Robb, the former co-CEO of Whole Foods who late last year joined FoodMaven's board and made a "significant" investment in the company.
The Series A funding will support the continued buildout of FoodMaven's logistics capacity, further investment in technology and innovation and the hiring of additional employees to support growth and operations. FoodMaven, which operates in Colorado Springs and Denver, plans to expand to up to 100 major cities within five years.
The Series A financing "really helps us build the foundation for launching this rollout process," Bultema said. "I actually anticipate that we'll do a subsequent financing in the summer to early fall that will be the financing that is really providing the capital to start that process of rolling out to other cities."
FoodMaven hasn't determined its next markets, Bultema said; that decision will hinge at least in part on its food partners and strategic relationships. With Robb and now Walton family members embracing FoodMaven's mission, Bultema said, "There are a lot of connections to very prominent people in the food industry, so we are enjoying the benefits of those introductions and relationships."