Cleantech startup Relocalize secures $3.5 million CAD to develop hyperlocal food distribution

Shipping containers
Relocalize aims to eliminate electric trucks and replace them with on-the-spot food distribution and supply.

Montréal-based cleantech startup Relocalize has raised $3.5 million CAD in the initial closing of a planned $4.8-million seed round to help prepare its autonomous production platform for growth. Relocalize also claims the round will help seal its leadership position as the industry’s first distributed, hyperlocal food and beverage manufacturing startup.

i4 Capital and Waterpoint Lane led the round, which closed in mid-September. Joining this round is RGS Ice, a California-based private equity investor focused on investments in retail and technology led by managing partner David J. Moore.

One of the climate problems Relocalize wants to solve is the so-called electric middle mile as the startup pursues decarbonization and hyper-local food distribution. D. Wayne McIntyre, CEO and co-founder of Relocalize, said, “This is a big step towards a truck-free future for our food system. It reflects both the urgent need to decarbonize food production and the high market demand for sustainable and affordable products.”

McIntyre said Relocalize’s technology allows the startup to make food at the point of distribution and eliminate the middle mile altogether. “So if you compare that to, say, the Tesla semi, their approach is to electrify that middle mile; our approach is to make it go away completely by making the food at the point of distribution,” he said.

Relocalize envisions dramatically reducing the carbon footprint of food production by eliminating long-haul transportation.

Southeastern Grocers announced a partnership in March with Relocalize to pilot an autonomous micro-factory, known as RELO (an abbreviation for Relocalize), at their Jacksonville distribution center. The pilot RELO is successfully producing the world’s first hyper-local, certified plastic-negative packaged ice, on-demand for local supermarkets in Florida. Building on this achievement, Relocalize plans to install multiple new systems to further impact climate change mitigation.

McIntyre envisions dramatically reducing the carbon footprint of production by eliminating long-haul transportation. Relocalize wants to produce food where people live unlike conventional centralized producers.

“At Relocalize, we drastically reduce the carbon footprint of production by eliminating long-haul transportation. We’re making food where people live, unlike conventional centralized producers.”

The plan to pilot RELO has been in the works since 2021. At that time, Relocalize closed a $1.4 million pre-seed angel round to fund the development of what it claimed would be the first-ever automated food micro-factory.

RELATED: Relocalize closes $1.4 million to deploy thousands of micro-factories in containers

McIntyre told BetaKit its first autonomous microfactory to produce packaged ice in Jacksonville is not a full-scale microfactory, but he called it a huge milestone for Relocalize. It demonstrates that it’s possible to make food where food is not normally made, he pointed out. “It allowed us to overcome our regulatory burdens,” noting that the startup needs to be FDA compliant, as it is planning to prepare food in a retailer/distribution centre, which would not normally be licensed for this kind of manufacturing.

While Relocalize’s technology is potentially disruptive, its challenge was traditional: access to capital. In this instance, McIntyre noted that solving large problems like climate and food systems requires hardware. “I think we live in a world where it’s a lot easier, especially in Canada, for companies to raise financing for software companies.”

Software startups come with lower capital requirements, higher margins, and more familiar business models. McIntyre knew where the company had to go to make the biggest impact and make hyper-localized manufacturing a reality, but could it get the capital to do it? “I think that process was our biggest challenge,” he said.

The new seed investors bring valuable expertise in cleantech, advanced manufacturing, and deep tech, according to Relocalize.

Tim Tokarsky, founder and managing partner of i4 Capital, said, “We believe that Relocalize’s micro-manufacturing technology will help reinvent the way consumers access quality food and beverage products. The world’s first hyper-local micro-factory for packaged ice is just the beginning; numerous applications will leverage their disruptive manufacturing platform, directly cutting [greenhouse gas] emissions.”

Ice might sound like an unusual launch product, but it’s a natural fit for Relocalize. Grant Jobb, Relocalize’s co-founder, owned Spring Water Ice, which was ultimately acquired by the multinational Arctic Glacier in 2015. After the acquisition, Jobb began working on the idea of micro-factories and received a patent for his technology before Relocalize was incorporated in November 2020.

“Florida is the largest ice market in the world, which is why we’re going there,” McIntyre told BetaKit in 2021. McIntyre noted that ice is a $6-billion market, and that ice is heavy. He pointed out that the ice they hope to replace in Florida travels more than 1,500 miles to the distribution centre, and then into stores.

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Relocalizing packaged ice alone reduces CO2 emissions in North America by more than 1.3 million metric tons per year, the company claims.

Relocalize claims its ice product cuts up to 90 percent of road transportation and 50 percent of water waste. Each robotic-enabled micro-factory produces, packages, places on pallets, and stores up to 1.6 million bags of ice per year, and could supply up to 100 to 200 local retail stores.

Those metrics have attracted attention to the cleantech startup.

The company recently received international recognition for sustainability innovation, winning major awards such as Best Climate Change Innovation at CogX and Sustainability Product of the Year by the Business Intelligence Group, alongside major brands like DHL, Honeywell, IBM, S&P Global Sustainable1, and Siemens. Relocalize’s other recent accolades also include the Real Leaders Impact Awards, the CDL-RBCx Innovation Prize, the CFIN FoodTech Next Award, Clean50 Top Projects, and the FoodTech 500.

According to McIntyre, Relocalize offers the first real alternative to the traditional food system and supply chain. He noted that the startup doesn’t just electrify trucks, but replaces them entirely—and that’s what’s getting people excited. “It really makes us unique and different compared to other decarbonization and tech companies, and food innovation companies that are out there.”

CORRECTION (05/14/24): A previous version of this story incorrectly stated that Relocalize raised a $4.78-million CAD ($3.5 million USD) seed round from a group of investors that included RPG Ice. This story has been updated to reflect that Relocalize actually raised $3.5 million CAD in the initial closing of a planned $4.8-million round that saw participation from RGS Ice. BetaKit regrets these errors.

Image from Paul Teysen via Unsplash.

Charles Mandel

Charles Mandel

Charles Mandel's reporting and writing on technology has appeared in, Canadian Business, Report on Business Magazine, Canada's National Observer, The Globe and Mail, and the National Post, among many others. He lives off-grid in Nova Scotia.

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