It’s been a good week of funding for Toronto-based Flashfood.
After winning $140,000 for Startupfest, the company has announced a $1.5 million seed round to scale its operations. The round was led by unnamed private investors.
Flashfood plans to use the funding to build out a referral program, making investments in its UX and UI, and developing a credit program allowing people to give back to others who wouldn’t be able to afford food.
Flashfood’s platform sends mobile users a notification whenever grocery stores and restaurants sell surplus food at a discount; users pay through the app and pick it up in the Flashfood section of the store. While the service debuted at Longo’s Bay and Dundas in Toronto, the service is now expanding to the Maple Leaf Square Longo’s. The company is also launching across Farm Boy grocery locations in London, Ontario.
“The conversion numbers have been high. We’re selling just over 50 percent of food that Longos is making available, and we’ve saved over 3,000 meals from going into a landfill and driven a lot of new customers,” said founder and CEO Josh Domingues, who said that some customers began shopping exclusively at Longos for the Flashfood service.
“Grocery stores have to throw out food, and they have to pay waste management companies to dispose food.”
– Josh Domingues, CEO of Flashfood
While the company doesn’t function as a not-for-profit, it does have a social mission of tackling food insecurity. And Domingues says that the company’s demographics are wide-ranging, from grandmothers buying food for their grandkids, to younger millennials living downtown. “There is a whole working poor class of people, and rent and food is so expensive. Food insecurity is a term that gets thrown a lot, and you think it’s just homeless people. But there’s a lot of people who just look like everyday people, who have a hard time being able to afford food,” said Domingues.
The company also announced new additions to its board, including Tandem Fund’s Alex Moorhead, who is a former CEO of UK-based LMG, which owns consumer loyalty program Nectar; Glenn Egan, former managing partner at BDC; and Jeremy Capussi, acting managing director of JC Fresh Farms. Moorhead will act as the chairman of the board.
“We have a model that’s driving enough value to retailers,” said Domingues. “Grocery stores have to throw out food, and they have to pay waste management companies to dispose food. So we’re making them more money, we’re driving more customers, and reducing costs associated with disposal.”
Domingues said that he fully credits his team of six for making his first-ever venture work, joking that he “now” understands how difficult it is to run a marketplace startup. “This is fun. I was a banker, I was a consultant, and I the did corporate thing and for the most part, it sucks,” said Domingues. “We get emails from people saying thank you because of what we’re doing, and I’ve seen people go to stores, and people say I couldn’t afford this stuff before.”