“Next-generation” food supply business Collectiv Food has raised £12 million (US$16.3 million) in its Series A funding round – the largest recorded Series A for a managed B2B food marketplace in Europe. The UK-based business aspires to transform access to fresh products and their distribution within cities, bringing more transparency to food while lowering carbon emissions and prices. 

“We believe the industry has reached an inflection point wher the existing modus operandi will no longer be viable. To build a healthier and better food system, we not only need full transparency of products, we also need a sustainable way of reaching consumers,” says Matthieu Vermersch, managing director at VisVires New Protein (VVNP), one of the companies that led the funding round. 

The round was also led by VNV Global, Octopus Ventures, Norrsken VC and existing investors such as Partech, Colle Capital and Mustard Seed.

Eliminating intermediaries 
Collectiv operates by sourcing quality food produce directly from a network of thousands of producers, cutting out the wholesaler and delivering straight to professional kitchens, meal kit companies, and stores. 

Collectiv also sells on demand, not by catalog, and selecs producers to match buyers’ needs. All products are then consolidated through a distribution model before reaching the customer. The model offers full transparency and traceability, with no relabeling or hiding producers’ brands.

The model is also underpinned by sustainability. Its last-mile delivery utilizes “PODs” (Points of Distribution) in disused city locations, resulting in up to 50 percent less CO2 emissions than traditional delivery methods. This decentralized model allows for lower prices, fresher products and a reliable service.

“We’re being pushed by a combination of strong tailwinds: end-consumers demanding a better understanding of provenance, cities implementing air pollution regulations that limit large freight and a post-COVID-19 hospitality industry desperate to improve margins but with limited staff availability to facilitate this in-house,” explains Collectiv founder Jeremy Hibbert-Garibaldi. 

Winds of change
The Series A investment places the company in a strong position to capitalize on the opportunity to offer a better service to food operators, with the European market projected to grow from £145 billion (US$197 billion) to £200 billion (US$272 billion) over the next five years.

The company is now poised to address the B2B food distribution market, which Collectiv estimates is worth £145 billion (US$197 billion) in Europe alone. 

The investment will be used to further develop Collectiv’s innovative delivery and sourcing models and expand the team, gearing up for further expansion in Europe.

It will also enable additional development of Collectiv’s Producer Sustainability Index, providing ratings on each producer and enabling better-informed decisions for the customer.

Collectiv has already seen a 200 percent growth in its customer base over the past year; its offering has piqued the interest of many in the hospitality industry, providing invaluable support and cost savings at a time when the dual impact of COVID-19 and Brexit have resulted in acute staff shortages and unreliable supply chains. 

“Combined with our innovative model, we’re able to set our sights on not only becoming a European leader in food distribution over the next few years, but even a global one,” says Hibbert-Garibaldi. 

Humble beginnings 
Currently operating in the UK and France, it is “among the first” to challenge a capital-intensive and low-margin industry. Built pre-internet, B2B food distribution has been slow to innovate, says the company, particularly in areas such as automation and transparency and despite increasing consumer demand for the latter.

Echoing this sentiment, Innova Market Insights named “Transparency Triumphs” as its number one top ten trend for 2021. 

“Collectiv’s innovative managed marketplace connects a fragmented supply of producers with the very fragmented demand of professional kitchens, creating improved transparency among other clear network improvements for all stakeholders,” adds Björn von Sivers, investment manager at VNV Global. 

Brands currently using Collectiv include Big Mamma Group, The Hush Collection, Dirty Bones, Megan’s, Crussh, Butchies, Cocotte, Tossed and Fresh Fitness Food.