While running a bar in Melbourne, Katy Barfield was amazed by the large amount of ingredients she threw away at the end of each day. After doing some research, he realized that Australia produces approximately 7.6 million tons of food waste each year. Yume was created to address this problem by working with manufacturers such as Unilever to redistribute surplus packaged food to businesses and charities.
The start-up today announced a seed funding of AUD 2 million (approximately US$1.3 million), raised by Asia Pacific-focused venture capital firm Investible’s Climate Tech Fund. It also included participation from new and returning investors such as Launch VIC, Goodrich Group, Veolia and angel investor Pitzy Folk. This brings Yume’s total funding so far to AUD 7 million. Yume is based in Melbourne and is recognized by the Australian government as a certified social enterprise.
Founded in 2016, Yume works with manufacturers such as Unilever, Kellanova (Kellog’s) and Mars Food and Nutrition, along with Australia’s four largest charities, and has facilitated the redistribution of 8 million kilograms of surplus food so far. Yume currently has more than 35 active buyers and has returned AUD$22 million to companies that use its platform to sell their unwanted food. It has also helped donate over a million meals to charities. Yume monetizes through a subscription model and taking a buyer’s commission.
Barfield describes owning a bar “as one of those a-ha moments in my life.” Before that, she says she had little awareness of food waste. Then, while working at the bar, he realized that chefs had to deal with the unpredictability of which dishes would sell well that day. As a result, staff usually had to throw away large amounts of unused ingredients after closing.
“That was the first time I thought, Oh my God, these animals have been slaughtered and ended up in a plastic bin lid,” says Barfield. “And secondly, I thought about a lot of it. This was a tiny bar in the middle of Melbourne. I looked it up and there were 40,000 different hosting shops across Australia. I thought if you take what we throw away on Friday and multiply it by 40,000, that’s a scary amount of food waste.”
As she did more research, Barfield saw the other negative effects of food waste, including the amount of methane emissions it produces. He realized that food manufacturers were struggling with the same problem as retailers, but on a much larger scale. Of the 7.6 million tonnes of food waste produced in Australia each year, 40% of this occurs at the industrial level before the food reaches a supermarket or restaurant.
Yume founder Katy Barfield
Part of finding a product-market fit was getting to the core of what manufacturers need, Barfield says. He initially assumed that manufacturers had highly sophisticated inventory management systems for clearances, but they did not.
Additionally, excess inventory is 2% to 5% of their inventory, so they usually focus on other channels as reducing food waste is time-consuming. As a result, Yume decided to make preventing food waste “a more enjoyable experience for these manufacturers,” says Barfield. He adds that Yume’s product-market fit is confirmed by the fact that they have a 100% year-over-year renewal rate for their annual subscriptions.
Saving surplus food from landfill
There are many reasons for food waste. An important one is unpredictable supply and demand. For example, the R&D departments of food manufacturers may create new products that do not perform as well as predicted. Some have a short shelf life or are seasonal products. Sometimes items are mislabeled or in the wrong packaging.
Yume was created to alleviate these problems. The platform focuses on consumer packaged goods and helps manufacturers find resellers. Barfield gives an example of cream cheese produced for export to China, but of the wrong character. It could not be exported, but Yume was able to transport it to a commercial kitchen for use. For food that cannot be sold, it is offered for donation.
“It’s a cascade effect because the primary reason manufacturers are in business is to be able to sell the product and get a return,” Barfield says. “Then, if it doesn’t sell, it can go to the charity. It makes this end-to-end process really seamless and automated so we avoid all the leaks that are currently in the system.”
To use Yume, manufacturers identify excess inventory and upload it to the platform, which already has their SKU libraries with product information. Buyers then submit bids to manufacturers. If the item is surplus, it may go up for another round of bidding. Food that is not sold is available for donation and offered to food rescue organizations.
One of the benefits of using Yume’s software is that manufacturers can reach up to 30 buyers at a time, rather than having to make multiple phone calls. Then orders are placed in order of preference. Barfield explains that some suppliers want volume over value. For example, their priority might be to clear out a warehouse. Others may want to get the best price for their surplus food (manufacturers get historical product prices to help them make realistic pricing decisions). Yume works Australia wide, but sometimes manufacturers only want to ship within one state.
“There are many different things and the algorithm sort by preferences. So builders get a whole list of the best deals based on their preferences,” says Barfield. “They can just go tick, tick, tick, tick and it’s over, instead of all that back and forth on the phones.”
Yume also eases the donation process by removing friction for manufacturers. Barfield explains that there are usually several departments working on donations, including charity liaisons who need to ask their finance department if it’s OK to drop off goods. Then they have to call the food rescue organizations to ask if they want, say, 10 tons of cream cheese. Sometimes charities don’t need that much food and it goes to waste, especially if it has a short shelf life. Yume’s process for donations is similar to the process of selling food because it contacts many organizations at the same time and organizes the food available on its platform.
Nationwide emphasis on climate technology
Despite the funding winter, Australia’s climate technology sector is booming. Other food waste startups include Whole Green Foods, which turns food waste into usable ingredients. food waste treatment provider GoTerra. Bardee, which turns food waste into protein and fertilizer. Good and Ugly production salesman; and Reground to return coffee grounds and heat to the soil.
Barfield says Yume is in a unique position in the food waste industry because it is the only company that works with manufacturers on packaged products. “The reason we do that is because it’s the most processed product,” he notes. “If you put it in the ground and bury it, that’s such a big loss to the planet because there’s all this energy that goes into making the product, packaging the product, getting the product ready for sale, all the packaging that is related to. It has the biggest impact on the environment.”
Yume is the newest portfolio startup in Investible’s Climate Tech Fund, which supports founders building high-growth technology with a positive climate impact in the Asia-Pacific region. It is also the last company headed by a woman. about half, or 48%, of the Climate Tech Fund’s portfolio are female-founded companies, and 21% are exclusively female-led.
This funding also marks a milestone for Investible, as three of the company’s vehicles invested together in Yume, with Early Stage Fund 2 and Club Investible syndicates joining the Investible Climate Tech Fund. Yume will use its new funding to prepare its technology for international expansion. It also plans to double its headcount by the end of this year, with 75% of new hires for its technology and product teams.
Investible’s chief investment officer Charlie Ill told TechCrunch one of the reasons the firm backed Yume is Barfield’s experience. She was previously the founding CEO of SecondBite, a national food redistribution charity and was awarded the Medal of the Order of Australia in 2023.
“Yume tried, tested and cracked business models that took many iterations through products and target customers before seeing rapid uptake and traction with many large-scale customers. Yume also has a first-mover advantage in the local Australian market with its complete cleansing food solution,” he says.
When asked about Yume’s role in Australia’s burgeoning startup scene, Ill said: “Yume fits into a core category that needs to be addressed. Food waste is responsible for a third of all human-caused greenhouse gas emissions, producing 8% of greenhouse gases annually. We are excited to support an impressive and intelligent business in Yume and look forward to being a part of its growth journey.”
