Spoiler Alert, a startup from two MIT grads that is trying to help food companies manage waste, has raised $11 million in Series A funding, a few years after a pivot that saw the company dream bigger.
The startup was founded in 2015 by Ricky Ashenfelter and Emily Malina, who met at the MIT Sloan School of Management. Their mission was to help the food industry keep as much of its product as possible from going to waste, at first focusing on optimizing donations. Spoiler Alert saw some early success and picked up customers. It was part of MassChallenge in 2015 and the accelerator TechStars the next year.
But the company ran into “headwinds,” said Ashenfelter, with customers telling them that the donation help product was incomplete.
The approach that the company’s partners were looking for is one that’s “holistic,” Ashenfelter said in an interview. “They told us that they were spending a lot of their time investing in strategies that don’t create waste in the first place,” he said.
So Spoiler Alert moved to a broader product, what he calls a “sales and supply chain platform,” to help major food brands manage their strategic discounting programs and auction off extra product to discount retailers and nonprofits that are focused on affordable nutrition.
The evolution paid off. Spoiler Alert now has customers including Nestlé, Kraft Heinz, Campbell Soup Company and Danone North America. The company has helped redistribute more than 200 million pounds of product in the last year.
Sign up for The Beat, BostInno’s free daily innovation newsletter from BostInno reporter Sam Mintz
The firm uses a “volume-based" SaaS subscription model where customers pay a subscription fee that’s linked to the amount of revenue Spoiler Alert helps them generate through savings on excess food.
“It really aligns incentives between us and our suppliers, and it ultimately provides a really interesting foundation for us to iterate and expand our product offering to unlock additional areas for monetization in the years ahead,” Ashenfelter said.
The Series A is led by Collaborative Fund, a values-based investment firm from New York which often focuses on food and climate. It’s previously invested in other food companies including Sweetgreen and Beyond Meat.
Spoiler Alert has around 25 employees today, about half of whom are based in Boston. It is looking to grow to 50 to 75 in the next year or two, Ashenfelter said.
In the short term, the startup is looking to grow its sales and marketing efforts and improve its platform, but longer-term ambitions include expanding to other industries that have perishable products and go international, he said.
